F-4

As filed with the Securities and Exchange Commission on June 8, 2005

Registration No.             

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORMS F-4* and S-4*

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

North American Energy Partners Inc.

(Exact name of registrant as specified in its charter)

Canada	1629	Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Zone 3, Acheson Industrial Area 2-53016 Highway 60 Acheson, Alberta T7X 5A7 (780) 960-7171	Vincent J. Gallant Zone 3, Acheson Industrial Area 2-53016 Highway 60 Acheson, Alberta T7X 5A7 (780) 960-7171
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)	(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Gary W. Orloff

Bracewell & Giuliani LLP

711 Louisiana Street, Suite 2300

Houston, Texas 77002-2770

Phone: (713) 221-1306

Fax: (713) 221-2166

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price per Note	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
9% Senior Secured Notes due 2010	$60,481,000	100%	$60,481,000	$7,119
Guarantees of 9% Senior Secured Notes due 2010(2)	(3)	(3)	$0	None (3)

(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f)(2) under the Securities Act.

(2) See the Table of Additional Registrants on the next page for a list of the additional registrant guarantors.

(3) Pursuant to Rule 457(n) under the Securities Act, no separate registration fee is required with respect to the guarantees.

The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in its Charter(1)	State or Other Jurisdiction of Incorporation or Organization	I.R.S. Employer Identification Number
Griffiths Pile Driving Inc.	Alberta, Canada	Not applicable
NACG Finance LLC	Delaware	74-3107147
North American Caisson Ltd.	Alberta, Canada	Not applicable
North American Construction Group Inc.	Canada	Not applicable
North American Construction Ltd.	Canada	Not applicable
North American Engineering Inc.	Alberta, Canada	Not applicable
North American Enterprises Ltd.	Alberta, Canada	Not applicable
North American Industries Inc.	Alberta, Canada	Not applicable
North American Maintenance Ltd.	Alberta, Canada	Not applicable
North American Mining Inc.	Alberta, Canada	Not applicable
North American Pipeline Inc.	Alberta, Canada	Not applicable
North American Road Inc.	Alberta, Canada	Not applicable
North American Services Inc.	Alberta, Canada	Not applicable
North American Site Development Ltd.	Alberta, Canada	Not applicable
North American Site Services Inc.	Alberta, Canada	Not applicable

(1) The address, including zip code, and telephone number, including area code, of each of the additional registrant’s principal executive offices is c/o North American Energy Partners Inc., Zone 3, Acheson Industrial Area, 2-53016 Highway 60, Acheson, Alberta T7X 5A7, (780) 960-7171.

* Explanatory Note—This registration statement comprises a filing on Form F-4 with respect to the securities of the non-U.S. registrants and a filing on Form S-4 with respect to the security of the U.S. registrant.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statements filed with the Securities and Exchange Commission are effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated June 7, 2005

US$60,481,000

NORTH AMERICAN ENERGY PARTNERS INC.

Offer to Exchange

9% Exchange Senior Secured Notes due 2010

for any and all outstanding 9% Senior Secured Notes due 2010

This prospectus, and accompanying letter of transmittal, relate to our proposed exchange offer. We are offering to exchange up to US$60,481,000 aggregate principal amount of new 9% exchange senior secured notes due 2010, which we call the exchange notes, for any and all outstanding 9% senior secured notes due 2010, which we call the original notes, previously issued in a private offering and which have various transfer restrictions because they were not issued pursuant to a registration statement.

In this prospectus we sometimes refer to the exchange notes and the original notes collectively as the notes.

• The exchange offer expires at 5:00 p.m., New York City time, on                     , 2005, unless extended.

• The terms of the exchange notes are substantially identical to the terms of the original notes, except that the exchange notes will be issued free of the transfer restrictions and covenants regarding exchange and registration rights applicable to the original notes.

• All original notes that are validly tendered and not validly withdrawn will be exchanged.

• Tenders of original notes may be withdrawn at any time prior to expiration of the exchange offer.

• We will not receive any proceeds from the exchange offer.

• The exchange of original notes for exchange notes will not be a taxable event for United States federal income tax purposes.

• Holders of original notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.

• Original notes not exchanged in the exchange offer will remain outstanding and be entitled to the benefits of the indenture, but except under limited circumstances, will have no further exchange or registration rights under the registration rights agreement discussed in this prospectus.

Please see “ Risk Factors” beginning on page 7 for a discussion of factors you should consider in connection with the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the exchange notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus, the accompanying letter of transmittal and related documents and any amendments or supplements to this prospectus carefully before making your investment decision.

The date of this prospectus is                     , 2005.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	7
The Exchange Offer	19
Use of Proceeds	31
Capitalization	32
Selected Historical Financial Information	33
Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Business	52
Management	67
Related Party Transactions	74
Beneficial Ownership of NACG Holdings Inc.’s Common Shares	78
Description of Certain Indebtedness	80
Description of the Notes	83
Book-Entry; Delivery and Form	129
Income Tax Considerations	131
Information Regarding Forward-Looking Statements	133
Validity of the Exchange Notes	134
Experts	134
Enforceability of Civil Liabilities Against Foreign Persons	134
Where You Can Find More Information	134
Glossary	135
Index to Financial Statements	F-1
Letter of Transmittal	Annex A

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may only be used where it is legal to sell the notes. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of the prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

The exchange notes have not been and will not be qualified for public distribution under the securities laws of any province or territory of Canada. The exchange notes are not being offered for sale and may not be offered or sold, directly or indirectly, in Canada or to any resident thereof except in accordance with the securities laws of the provinces and territories of Canada. The notes have been issued pursuant to the exemption from the prospectus requirements of the applicable Canadian provincial and territorial securities laws and may be sold in Canada only pursuant to an exemption therefrom.

A number of terms commonly used in our industry and this prospectus are defined in the glossary section of this prospectus.

i

EXCHANGE RATE DATA

The following table sets forth the exchange rates for one Canadian dollar, expressed in U.S. dollars, based on the Bank of Canada nominal noon exchange rate. As of May 31, 2005, the Bank of Canada nominal noon exchange rate was C$1.00 = US$0.7994.

	2004	2005
	December	January	February	March	April	May
High for period	0.8433	0.8342	0.8131	0.8320	0.8232	0.8083
Low for period	0.8056	0.8051	0.7958	0.8024	0.7956	0.7872

	Year Ended March 31,
	2000	2001	2002	2003	2004
Average for period	0.6811	0.6634	0.6386	0.6478	0.7420

ii

SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that may be important to you. Therefore, you are encouraged to carefully read this entire prospectus, including the section entitled “Risk Factors.” This prospectus includes the historical financial statements of Norama Ltd., the holding company for the business that we acquired on November 26, 2003. We state our financial statements in Canadian dollars. In this prospectus, references to “Canadian dollars,” “dollars,” “C$” or “$” are to the currency of Canada, and references to “U.S. dollars” or “US$” are to the currency of the United States. In this prospectus, unless the context otherwise requires, references to “we,” “us” or “our” are to North American Energy Partners Inc. and its subsidiaries.

Our Company

We are one of the largest providers of mining and site preparation, piling and pipeline installation services in western Canada. We provide our services primarily to the major integrated and independent oil and gas, petrochemical and other natural resources companies operating in this geographic region. In serving our customers, we operate 450 pieces of heavy equipment and over 600 support vehicles, and we have developed expertise operating in the difficult working conditions created by the climate and terrain of the Alberta oil sands and other areas of western Canada. Our work on private sector oil sands and pipeline installation projects results from focusing our asset deployment on the more technically difficult and profitable revenue opportunities rather than traditional public sector construction activity. Our services consist of:

• surface mining for oil sands and other natural resources; site preparation, which includes clearing, stripping, excavating and grading for mining operations and other general construction projects, as well as underground utility installation for plant, refinery and commercial building construction;

• piling installation, including the installation of all types of driven and drilled piles, caissons and earth retention and stabilization systems for commercial buildings, private industrial projects, such as plants and refineries, and infrastructure projects, such as bridges; and

• pipeline installation, including the installation of transmission and distribution pipe made of steel, plastic and fiberglass materials in sizes up to and including 36 inches in diameter for oil and gas transmission.

For the nine months ended December 31, 2004, we had revenue of $234.5 million and EBITDA of $11.0 million.

We have long-term, stable relationships with our customers, some of whom we have been serving for over 30 years. We believe we are the principal provider of mining and site preparation and piling services in the Alberta oil sands to many major operators in the area, including Syncrude Canada Ltd., our largest customer and the largest producer of bitumen in the oil sands. We also provide pipeline installation services in British Columbia to EnCana Corporation.

Our principal office is located at Zone 3, Acheson Industrial Area, 2-53016 Highway 60, Acheson, Alberta, T7X 5A7. Our telephone number is (780) 960-7171.

1

Corporate Structure

We are a wholly-owned subsidiary of NACG Preferred Corp., a company without any business operations. NACG Preferred Corp. is a wholly-owned subsidiary of NACG Holdings Inc., our ultimate parent. NACG Holdings Inc. has no business operations. All of our restricted subsidiaries (other than any immaterial subsidiaries) guarantee the notes. The following chart depicts our organizational structure.

2

The Exchange Offer

Registration Rights Agreement	We sold US$60,481,000 in aggregate principal amount of original notes to qualified institutional buyers as defined in Rule 144A under the Securities Act and outside the United States in accordance with Regulation S under the Securities Act through Jefferies & Company, Inc., as initial purchaser. We entered into a registration rights agreement with the initial purchaser which grants the holders of the original notes limited exchange and registration rights. The exchange offer made pursuant to this prospectus is intended to satisfy those exchange rights.
The Exchange Offer	US$1,000 principal amount of exchange notes in exchange for each US$1,000 principal amount of original notes. As of the date of this prospectus, US$60,481,000 aggregate principal amount of the original notes are outstanding. We will issue exchange notes to holders on the earliest practicable date following the Expiration Date.
Resales of the Exchange Notes	Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that, except as described below, the exchange notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by a holder of the exchange notes, other than any holder that is an “affiliate” of ours within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such exchange notes are acquired in the ordinary course of such holder’s business and that such holder has no arrangement or understanding with any person to participate in the distribution of such exchange notes.
	Each broker-dealer that receives exchange notes pursuant to the exchange offer in exchange for original notes that such broker-dealer acquired for its own account as a result of market-making activities or other trading activities, other than original notes acquired directly from us or our affiliates, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
	If we receive certain notices in the letter of transmittal, this prospectus, as it may be amended or supplemented from time to time, may be used for the appropriate time period by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities and not acquired directly from us. We have agreed that, if we receive the notices in the letter of transmittal, we will make this prospectus available to any such broker-dealer for use in connection with any such resale.
	The letter of transmittal requires broker-dealers tendering original notes in the exchange offer to indicate whether the broker-dealer acquired the original notes for its own account as a result of market-making activities or other trading activities, other than original notes acquired directly from us or any of our affiliates. If no broker-dealer indicates that the original notes were so acquired,

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	we have no obligation under the registration rights agreement to maintain the effectiveness of the registration statement past the consummation of the exchange offer or to allow the use of this prospectus for such resales. See “The Exchange Offer—Registration Rights” and “—Resale of the Exchange Notes; Plan of Distribution.”
Expiration Date	The exchange offer expires at 5:00 p.m., New York City time, on                     , 2005, unless we extend the exchange offer in our sole discretion, in which case the term “Expiration Date” means the latest date and time to which the exchange offer is extended.
Conditions to the Exchange Offer	The exchange offer is subject to certain conditions which we may waive. See “The Exchange Offer—Conditions to the Exchange Offer.”
Procedures for Tendering the Original Notes	Each holder of original notes wishing to accept the exchange offer must complete, sign and date the accompanying letter of transmittal in accordance with the instructions contained in this prospectus and in the letter of transmittal, and mail or otherwise deliver the letter of transmittal together with the original notes and any other required documentation to the exchange agent identified below under “Exchange Agent” at the address set forth in this prospectus. By executing the letter of transmittal, a holder will make a number of representations to us. See “The Exchange Offer—Registration Rights” and “—Procedures for Tendering Original Notes.”
Special Procedures for Beneficial Owners	Any beneficial owner whose original notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on such beneficial owner’s behalf. See “The Exchange Offer—Procedures for Tendering Original Notes.”
Guaranteed Delivery Procedures	Holders of original notes who wish to tender their original notes when those securities are not immediately available or who cannot deliver their original notes, the letter of transmittal or any other documents required by the letter of transmittal to the exchange agent prior to the Expiration Date must tender their original notes according to the guaranteed delivery procedures set forth in “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery.”
Withdrawal Rights	Tenders of original notes pursuant to the exchange offer may be withdrawn at any time prior to the Expiration Date.
Acceptance of Original Notes and Delivery of Exchange Notes	We will accept for exchange any and all original notes that are properly tendered in the exchange offer, and not withdrawn, prior to the exchange offer’s Expiration Date. The exchange notes issued pursuant to the exchange offer will be issued on the earliest practicable date following our acceptance for exchange of original notes. See “The Exchange Offer—Terms of the Exchange Offer.”
Exchange Agent	Wells Fargo Bank, N.A. is serving as exchange agent in connection with the exchange offer.
U.S. Federal Income Tax Considerations	The exchange of original notes for exchange notes pursuant to the exchange offer will not be treated as a taxable exchange for federal income tax purposes. See “Income Tax Considerations.”

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Summary Historical Financial Information

North American Energy Partners Inc. was formed in October 2003 and had no operations before November 26, 2003. As a result, the summary historical consolidated financial information presented below as of and for each of the fiscal years ended March 31, 2002 and 2003 is derived from the audited consolidated financial statements of our predecessor company, Norama Ltd. The summary consolidated historical financial information presented below for the year ended March 31, 2004 is constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004. The summary consolidated historical financial information presented below for the nine months ended December 31, 2003 is constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical unaudited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to December 31, 2003. The consolidated financial information for the periods before November 26, 2003 are not comparable in all respects to the consolidated financial information for periods after November 26, 2003. The pro forma balance sheet data as of February 28, 2005 is derived from our preliminary unaudited financial statements as of February 28, 2005. In the opinion of our management, the historical consolidated financial statements include all adjustments necessary for a fair presentation of our financial position and results of operations for such periods.

The summary historical consolidated financial information for the nine months ended December 31, 2004 is not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2005.

The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes to those financial statements included elsewhere in this prospectus. All of the financial information presented below has been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP as they pertain to us, see note 19 to our audited consolidated financial statements and note 11 to our unaudited interim consolidated financial statements included elsewhere in this prospectus.

	Year Ended March 31,									Nine Months Ended December 31,
	2002			2003			2004 (a)			2003 (a)			2004 (a)
	(dollars in thousands)
Statement of Operations Data:
Revenue	$	249,351		$	344,186		$	378,533		$	275,855		$	234,532
Project costs		127,996			219,979			240,043			174,412			167,644
Equipment costs		77,289			72,228			69,102			57,550			39,741
Depreciation		11,299			10,974			13,240			7,930			14,946
Gross profit		32,767			41,005			56,148			35,963			12,201
General and administrative		12,794			12,233			14,037			8,848			15,349
Gain on sale of capital assets		(218	)		(2,265	)		82			(49	)		509
Amortization of intangible assets		—			—			12,928			1,968			2,971
Operating income		20,191			31,037			29,101			25,196			(6,628	)
Management fee (b)		14,400			8,000			41,070			41,070			—
Interest expense		3,786			4,173			13,474			5,556			24,811
Foreign exchange (gain) loss		(17	)		(234	)		72			5			516
Other income		(276	)		(11	)		(326	)		(418	)		(261	)
Income (loss) before income taxes		2,298			19,109			(25,189	)		(21,017	)		(31,694	)
Income taxes (benefit)		689			6,620			(9,492	)		(8,057	)		(5,244	)
Net earnings (loss)	$	1,609		$	12,489		$	(15,697	)	$	(12,960	)	$	(26,450	)
Balance Sheet Data (end of period):
Cash	$	—		$	—		$	36,595		$	21,025		$	3,344
Total assets		120,431			158,584			489,389			482,731			478,981
Total debt (c)		50,137			63,401			313,798			311,497			322,879
Total shareholder’s equity (c)		17,379			29,818			123,081			124,800			96,938
Other Financial Data:
EBITDA (d)	$	17,383		$	34,256		$	14,453		$	(5,563	)	$	11,034
Capital expenditures		8,668			22,932			7,735			5,836			20,494
Ratio of earnings to fixed charges (e)		1.3	x		4.1	x		—			—			—

(a) Amounts for the nine months ended December 31, 2003 and 2004 are unaudited. While amounts for the year ended March 31, 2004 are unaudited, they are constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004.

5

(b) Management fees paid to the corporate shareholder of our predecessor company, Norama Ltd., represented fees for services rendered and were determined with reference to taxable income. Subsequent to our acquisition on November 26, 2003, these fees are no longer paid.

(c) The following amounts as calculated under U.S. GAAP differ from the amounts under Canadian GAAP due to the difference in the method of accounting for derivative and hedging activities:

	Year ended March 31,						Nine Months Ended December 31,
	2002		2003		2004		2003		2004
	(in thousands)
Total debt in accordance with U.S. GAAP	$	50,137	$	63,401	$	320,147	$	319,850	$	337,571
Total shareholder's equity in accordance with U.S. GAAP		17,379		29,818		116,732		116,447		82,246

(d) EBITDA is defined as earnings before interest expense, income taxes and depreciation and amortization. EBITDA is not a measure of performance under Canadian GAAP or U.S. GAAP. We believe that EBITDA is a meaningful measure of the performance of our business because it excludes items, such as depreciation, interest and taxes, that are not directly related to the operating performance of our employees and equipment. Management reviews EBITDA to determine whether capital assets are being allocated efficiently. However, EBITDA does not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with Canadian GAAP or U.S. GAAP, and EBITDA is not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of EBITDA may differ from that of other companies. A reconciliation of net earnings (loss) to EBITDA as set forth in our consolidated statements of operations is as follows:

	Year ended March 31,							Nine Months Ended December 31,
	2002		2003		2004			2003			2004
	(unaudited)
	(in thousands)
Net earnings (loss)	$	1,609	$	12,489	$	(15,697	)	$	(12,960	)	$	(26,450	)
Adjustments:
Depreciation		11,299		10,974		13,240			7,930			14,946
Amortization		—		—		12,928			1,968			2,971
Interest expense		3,786		4,173		13,474			5,556			24,811
Income taxes		689		6,620		(9,492	)		(8,057	)		(5,244	)
EBITDA	$	17,383	$	34,256	$	14,453		$	(5,563	)	$	11,034

(e) For the purposes of calculating the ratio of earnings to fixed charges, (1) earnings consist of earnings (loss) before fixed charges and income taxes and (2) fixed charges consist of interest expense on all indebtedness, including capital lease obligations. During the periods presented, no interest costs have been capitalized. The amount by which fixed charges exceeded earnings was $25,189 for the fiscal year ended March 31, 2004, $21,017 for the nine months ended December 31, 2003 and $31,694 for the nine months ended December 31, 2004.

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RISK FACTORS

An investment in the notes entails a high degree of risk. You should carefully consider the following risk factors and other information presented in this prospectus before making an investment decision with respect to the notes. The risks described below are not the only ones facing us.

Risks Related to the Notes and Our Other Indebtedness

Our substantial debt could adversely affect our financial health, make us more vulnerable to adverse economic conditions and prevent us from fulfilling our obligations under the notes or our new revolving credit facility.

We have a significant amount of debt outstanding and significant debt service requirements. As of February 28, 2005, on a pro forma basis after giving effect to the offering of the original notes on May 19, 2005, we would have had outstanding $355.2 million of consolidated debt, $100.0 million of which, including capital leases and the Canadian GAAP-calculated liability related to our derivative financial instruments, would have been secured debt. As of June 1, 2005, we had the ability to borrow up to approximately $16.6 million under our new revolving credit facility, after taking into account $20.0 million of outstanding and undrawn letters of credit.

Our high level of debt could have important consequences to holders of notes, such as:

• limiting our ability to obtain additional financing to fund our working capital, capital expenditures, debt service requirements, potential growth or other purposes;

• limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to make payments on our debt;

• limiting our ability to obtain bonding which is required by some of our customers;

• limiting our ability to lease equipment;

• placing us at a competitive disadvantage compared to competitors with less debt;

• increasing our vulnerability to adverse economic and industry conditions; and

• increasing our vulnerability to increases in interest rates because borrowings under our new revolving credit facility are subject to variable interest rates.

Our ability to pay interest on the notes and to satisfy our other debt obligations will depend upon, among other things, our future operating performance and our ability to refinance debt when necessary. Each of these factors is to a large extent dependent on economic, financial, competitive and other factors beyond our control. If, in the future, we cannot generate sufficient cash from operations to make scheduled payments on the notes or to meet our other obligations, we will need to refinance some or all of our debt, obtain additional financing or sell assets or we would be unable to generate cash flow, or obtain funding, sufficient to satisfy our debt service requirements.

Despite existing debt levels, we may still be able to incur substantially more debt, which would increase the risks associated with our leverage.

We may be able to incur substantial amounts of additional debt in the future, including debt resulting from the issuance of additional notes and borrowings under our new revolving credit facility. Although the terms of the notes and our new revolving credit facility limit our ability to incur additional debt, such terms do not and will not prohibit us from incurring substantial amounts of additional debt for specific purposes or under certain circumstances. As of June 1, 2005, we had the ability to borrow up to approximately $16.6 million under our new revolving credit facility, after taking into account $20.0 million of outstanding and undrawn letters of credit, subject to availability and the restrictions contained therein.

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Restrictive covenants in our debt agreements may restrict the manner in which we can operate our business.

Our new revolving credit facility and the indenture governing the notes limit, among other things, our ability and the ability of our restricted subsidiaries to:

• incur or guarantee additional debt, issue disqualified capital stock or enter into sale and leaseback transactions;

• pay dividends or distributions on our capital stock or repurchase our capital stock, redeem subordinated debt or make other restricted payments;

• incur dividend or other payment restrictions affecting certain of our subsidiaries;

• issue stock of subsidiaries;

• make certain investments or acquisitions;

• create liens on our assets to secure debt;

• enter into transactions with affiliates;

• consolidate, merge or transfer all or substantially all of our assets; and

• transfer or sell assets, including capital stock of our subsidiaries.

If we fail to comply with these covenants, we would be in default under our new revolving credit facility and the indenture, and perhaps the indenture governing our 8¾% senior notes due 2011. The principal and accrued interest on the notes and our other outstanding indebtedness may become immediately due and payable. See “Description of Certain Indebtedness—New Revolving Credit Facility” and “Description of the Notes—Certain Covenants.” In addition, our new revolving credit facility contains, and the agreements governing the terms of our future indebtedness may contain, additional affirmative and negative covenants that are generally more restrictive than those contained in the indenture.

As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be considered beneficial to us. Our new revolving credit facility also requires us, and our future credit facilities may require us, to maintain specified financial ratios and satisfy specified financial tests. Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we may be unable to meet those tests. The breach of any of these covenants could result in a default under our new revolving credit facility or any future credit facilities. Upon the occurrence of an event of default under our new revolving credit facility or future credit facilities, the lenders could elect to declare all amounts outstanding under such credit facilities, including accrued interest or other obligations, to be immediately due and payable. If amounts outstanding under such credit facilities were to be accelerated, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness, including the notes.

We may not be able to generate sufficient cash flow to meet our debt service and other obligations due to events beyond our control.

Our ability to generate net cash flow provided by operating activities and to make scheduled payments on our indebtedness will depend on our future financial performance. Our future performance will be affected by a range of economic, competitive and business factors that we cannot control, such as general economic and financial conditions in our industry or the economy generally. A significant reduction in operating cash flows resulting from changes in economic conditions, increased competition, or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our debt and other obligations. If we are unable

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to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as selling assets, restructuring or refinancing our indebtedness, seeking additional equity capital or reducing capital expenditures. We may be unable to effect any of these alternative strategies on satisfactory terms, if at all, or they may yield insufficient funds to make required payments on the notes and our other indebtedness

We may be prevented from financing, or may not have the ability to raise funds necessary to finance, the change of control offer required by the indenture.

Upon the occurrence of a change of control, we will be required to make an offer to each holder of notes outstanding under the indenture to purchase all or a portion of the notes at a purchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. Upon a change of control event, we may be required to repay immediately the outstanding principal, any accrued interest on and any other amounts owed by us under our new revolving credit facility, but we may not be able to repay immediately amounts outstanding under our new revolving credit facility. Upon a change of control, we also may not have sufficient funds available to purchase all of the notes tendered to us. Any requirement to offer to purchase any outstanding notes may result in us having to refinance our outstanding debt or obtain necessary consents under our other debt agreements to repurchase the notes, which we may not be able to do. In such case, our failure to offer to purchase notes following a change of control would constitute an event of default under the indenture, which would, in turn, constitute a default under our new revolving credit facility.

If the indebtedness under our new revolving credit facility is not paid, the lenders thereunder may seek to enforce their security interests in the collateral securing such indebtedness, thereby limiting our ability to raise cash to purchase the notes, and reducing the practical benefit of the offer to purchase provisions to the holders of the notes.

One of the circumstances under which a change of control may occur is upon the sale or disposition of all or substantially all of our capital stock or assets. However, the phrase “all or substantially all” will likely be interpreted under applicable state or provincial law and will be dependent upon particular facts and circumstances. As a result, there may be a degree of uncertainty in ascertaining whether a sale or disposition of “all or substantially all” of our capital stock or assets has occurred, in which case, the ability of a holder of the notes to obtain the benefit of an offer to repurchase all of a portion of the notes held by such holder may be impaired. By definition, the term “Change of Control” contains significant exceptions. See “Description of the Notes—Certain Definitions.”

We are a holding company and rely on our subsidiaries for our operating funds, and our subsidiaries have no obligation to supply us with any funds.

We are a holding company with no operations of our own. We conduct our operations through subsidiaries and are dependent upon our subsidiaries for the funds we need to operate. We will be dependent on the transfer of funds from our subsidiaries to make the payments due under the notes. Although our restricted subsidiaries (other than any immaterial subsidiaries) guarantee the notes, each of our subsidiaries is a distinct legal entity and has no obligation to transfer funds to us. Our ability to pay the notes, and the ability of our subsidiaries to transfer funds to us, could be restricted by the terms of subsequent financings. The payment of dividends to us by our subsidiaries is subject to legal restrictions as well as various business considerations and contractual provisions which may restrict the payment of dividends and distributions and the transfer of assets to us.

Your ability to transfer the notes may be limited by the absence of an active trading market, and an active trading market may not develop for the notes.

The notes are a new issue of securities for which there is no established trading market. We do not intend to have the notes listed on a national securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System, although the original notes are eligible for trading in The PORTAL Market^SM. At the time of the private placement of the original notes, the initial purchaser advised us that it intended to make a market in the original notes, and, if issued, the exchange notes, as permitted by applicable law; however, the initial purchaser is not obligated to make a market in the original notes or the exchange notes and may discontinue its market-making activities at any time in its sole discretion without notice. Therefore, an active market for the original notes or the exchange notes may not develop or, if a market develops, it may not continue. Historically, the market

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for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. The market, if any, for the original notes or the exchange notes may experience similar disruptions or such disruptions may adversely affect the prices at which you may sell your notes. In addition, subsequent to their initial issuance, the original notes or the exchange notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar notes, our performance and other factors.

Currency exchange rate fluctuations could adversely affect our ability to repay the notes and to borrow under the new revolving credit facility.

Substantially all of our revenues and costs are incurred in Canadian dollars. However, the obligations represented by the notes are denominated in U.S. dollars. If the Canadian dollar loses value against the U.S. dollar while other factors remain constant, our ability to pay interest and principal on the notes may be diminished.

Our ability to borrow under the new revolving credit facility will be limited, in part, by the mark-to-market liabilities under the Swap Agreements, as defined in “Description of the Notes—Certain Definitions.” If the Canadian dollar increases in value against the U.S. dollar, the mark-to-market liabilities under the Swap Agreements will increase, which may adversely affect our liquidity or even cause a default under the new revolving credit facility if the mark-to-market liabilities were to increase to the extent that the amount of outstanding borrowings and letters of credit would exceed the reduced availability under the new revolving credit facility.

The collateral securing the notes is subject to prior liens and may be insufficient or unavailable in the event of a default.

The value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. Consequently, liquidating the collateral securing the notes may not produce proceeds in an amount sufficient to pay any amounts due under the notes after also satisfying the obligations to pay any other senior secured creditors that have prior liens on the collateral. Additionally, the fair market value of the collateral securing the notes may not be sufficient to pay any amounts due under the notes.

The notes are effectively subordinated to indebtedness that may be incurred under our new revolving credit facility, the Swap Agreements, certain equipment financing and certain purchase money indebtedness, in each case to the extent of the value of the assets securing such indebtedness. Our new revolving credit facility and the Swap Agreements are secured by substantially all of the collateral securing the notes. In the event of a default under the notes, the proceeds from the sale of the collateral may not be sufficient to satisfy in full our obligations under the notes following the repayment of our new revolving credit facility and obligations under the Swap Agreements. The amount to be received upon such a sale would depend upon numerous factors, including the timing and manner of the sale. By its nature, the collateral, other than accounts receivable, will be illiquid and may have no readily ascertainable market value. Accordingly, the collateral agent may be unable to sell the collateral in a short period of time or the proceeds obtained therefrom may be insufficient to pay all amounts owing to the lenders under our new revolving credit facility, the counterparties to the Swap Agreements and the holders of the notes.

In addition, to the extent that third parties (including the lenders under our new revolving credit facility and the counterparties to the Swap Agreements) have prior liens, such third parties may have rights and remedies with respect to the property subject to such liens that, if exercised, could adversely affect the value of the collateral. Additionally, certain other usual and customary permitted liens, including statutory and governmental liens, will be prior to the liens securing the notes. The indenture governing the notes does not require that we maintain the current level of collateral or maintain a specific ratio of indebtedness to collateral value. Additionally, the terms of the indenture governing the notes allow us to issue additional notes provided that we meet a specified consolidated fixed charge coverage ratio or have availability under a general debt carve out. Any additional notes issued pursuant to the indenture governing the notes will rank pari passu to the notes and be entitled to the same rights and priority as such notes with respect to the collateral. Thus, the issuance of additional notes pursuant to the indenture governing the notes may have the effect of significantly diluting your ability to recover payment in full from the then existing pool of collateral. See “Description of the Notes—Collateral.”

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The lien-ranking provisions set forth in the intercreditor agreement relating to the indenture governing the notes limit the rights of the indenture trustee and the holders of the notes with respect to the collateral securing the notes.

The rights of the indenture trustee and the holders of the notes with respect to the collateral securing the notes are limited pursuant to the terms of the intercreditor agreement relating to the indenture governing the notes. The intercreditor agreement limits the actions that may be taken in respect of the collateral, including the ability to cause the commencement of enforcement proceedings against such collateral and to control the conduct of such proceedings, if obligations under our new revolving credit facility are outstanding or the Swap Agreements have not been terminated or expired. In certain cases, these actions may only be taken at the direction of the administrative agent or the lenders under the revolving credit facility and/or the counterparties to the Swap Agreements. The indenture trustee, on behalf of itself and the holders of the notes, will not under certain circumstances have the ability to control or direct such actions, even if the rights of the holders of the notes are or may be adversely affected. Additional releases of collateral from the liens securing the notes will be permitted under some circumstances. See “Description of the Notes—Collateral.”

Holders of the notes may suffer losses because they have limited control over actions of the indenture trustee upon an event of default under the indenture.

If an event of default occurs under the indenture, the holders of at least 25% in aggregate principal amount of the then outstanding notes may declare all the notes to be due and payable. The holders of a majority in aggregate principal amount of all notes then outstanding may direct the indenture trustee in its exercise of any trust or power or agency granted to the indenture trustee by the Collateral Agreements, as defined under “Description of the Notes—Certain Definitions,” which actions may be restricted by the intercreditor agreement referred to above. In addition, the holders of a majority in aggregate principal amount of the notes have the right to waive events of default (except an event of default in the payment of interest or premium or additional interest, if any, or the principal of the notes) without consideration of the effect that the waiver would have on the other holders of notes.

In addition, under the indenture, the indenture trustee will be entitled to indemnification or reimbursement by the holders of the notes in connection with the indenture trustee’s actions, including foreclosure on the collateral or the pursuit of other remedies following an event of default. Prior to taking action to foreclose or pursue other remedies, the indenture trustee may require additional undertakings by or on behalf of the holders of the notes relating to its rights to indemnification or reimbursement.

U.S. federal and state and Canadian federal and provincial laws allow courts, under specific circumstances, to void the guarantees, subordinate claims in respect of the guarantees and require note holders to return payments received from the guarantors.

Our subsidiary guarantors guarantee our obligations under the notes. The issuance of the guarantees by the guarantors may be subject to review under U.S. federal or state or Canadian federal or provincial laws if a bankruptcy, liquidation or reorganization case or a lawsuit, including in circumstances in which bankruptcy is not involved, were commenced at some future date by, or on behalf of, our unpaid creditors or those of the guarantors. Under the federal U.S. and Canadian bankruptcy laws and comparable provisions of state and provincial fraudulent transfer laws, a court may void or otherwise decline to enforce a guarantor’s guarantee, or subordinate such guarantee to the applicable guarantor’s existing and future indebtedness. While the relevant laws may vary from jurisdiction to jurisdiction, a court might do so if it found that when the applicable guarantor entered into its guarantee or, in some jurisdictions, when payments became due under such guarantee, the applicable guarantor received less than reasonably equivalent value or fair consideration and either:

• was insolvent or rendered insolvent by reason of such incurrence, or if in Canada, becomes subject to an insolvency proceeding within one year;

• was engaged in a business or transaction for which such guarantor’s remaining assets constituted unreasonably small capital; or

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• intended to incur, or believed that such guarantor would incur, debts beyond such guarantor’s ability to pay such debts as they mature.

The court might also void a guarantee, without regard to the above factors, if the court found that the applicable guarantor entered into its guarantee with actual intent to hinder, delay or defraud its creditors. In addition, any payment by a guarantor pursuant to its guarantees could be voided and required to be returned to such guarantor or to a fund for the benefit of such guarantor’s creditors.

A court would likely find that a guarantor did not receive reasonably equivalent value or fair consideration for such guarantee if such guarantor did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void a guarantee, you would no longer have a claim against the applicable guarantor. Sufficient funds to repay the notes may not be available from other sources, including the remaining guarantors, if any. In addition, the court might direct you to repay any amounts that you already received from any guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

• the sum of such guarantor’s debts, including contingent liabilities, was greater than the fair saleable value of such guarantor’s assets; or

• if the present fair saleable value of such guarantor’s assets were less than the amount that would be required to pay such guarantor’s probable liability on such guarantor’s existing debts, including contingent liabilities, as they become absolute and mature; or

• such guarantor could not pay such guarantor’s debts as they become due.

To the extent a court voids any of the guarantees as fraudulent transfers or holds any of the guarantees unenforceable for any other reason, holders of notes would cease to have any direct claim against the applicable guarantor. If a court were to take this action, the applicable guarantor’s assets would be applied first to satisfy the applicable guarantor’s liabilities, if any, before any portion of its assets could be applied to the payment of the notes.

Each guarantee contains a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. This provision may not be effective to protect the guarantees from being voided under fraudulent transfer law, or may reduce the guarantor’s obligation to an amount that effectively makes the guarantee worthless.

You may be unable to enforce your rights under U.S. bankruptcy law, and Canadian bankruptcy and insolvency laws may impair the indenture trustee’s ability to enforce remedies on your behalf.

We are incorporated under the laws of Canada and our principal operating assets are located in Canada. Accordingly, we would likely be subject to Canadian bankruptcy, insolvency and other restructuring legislation, principally either the Bankruptcy and Insolvency Act (Canada), referred to as the “BIA,” or the Companies’ Creditors Arrangement Act (Canada), referred to as the “CCAA.”

The rights of the indenture trustee and holders of the notes to enforce remedies under the indenture (including foreclosing upon the collateral securing the notes and the related guarantees) could be delayed by the restructuring provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation if the benefit of such legislation is sought with respect to us. The BIA provides an “insolvent person” with automatic protection, and the CCAA allows an “insolvent person” to apply to court for an order granting it protection that could prevent its creditors and others from initiating or continuing proceedings against it while it prepares a proposal or plan of arrangement for approval by those creditors who will be affected by the proposal or plan of arrangement. An insolvent person is defined as a non-bankrupt person resident or carrying on business in Canada who is for any reason unable to meet his obligations as they generally become due, who has ceased paying his current obligations in the ordinary course of business as they generally become due or whose property is not of sufficient value to

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enable payment of all his obligations due and accruing due. Such a restructuring plan or proposal, if accepted by the requisite majorities of each affected class of the insolvent person’s creditors and approved by the supervising court, would be binding on the minorities in any such class who vote against the plan or proposal but would not be binding on any class that voted against the proposal or plan by the prescribed majority. The BIA proposal provisions and stay orders under the CCAA generally permit the insolvent debtor to retain possession and administration of its property (including the collateral that secures the notes and the related guarantees, to the extent that such guarantors are also subject to such restructuring legislation), even though it may be in default under the applicable debt instrument during the period that the protection against proceedings remains in force, provided that in the case of a BIA proposal proceeding, secured creditors have not completed the necessary steps under the BIA to cause them to become unaffected creditors. Both the BIA and the CCAA grant rights to affected creditors to challenge the debtor’s entitlement to claim the protection of those statutes.

During the stay period, the indenture trustee and holders of the notes are likely to be restrained from enforcing remedies under the indenture (including foreclosing upon the collateral that secures the notes and the related guarantees) and payments under the notes or the guarantees, as applicable, are unlikely to be made. It is equally unlikely that holders of the notes would be compensated for any delay in payment, if any, of principal or premium, if any, or interest on the notes other than a right to claim accrued and unpaid interest on the amounts owing under the notes and the indenture, unless the right is itself compromised under any restructuring plan or proposal approved by creditors and the court.

We are controlled by NACG Holdings Inc., whose interests in our business may be different than yours.

We are a wholly-owned indirect subsidiary of NACG Holdings Inc. Consequently, NACG Holdings Inc. has the ability to approve all significant transactions involving our company, including the incurrence of additional indebtedness and mergers, acquisitions or sales of all or substantially all of our assets.

The interests of NACG Holdings Inc. and its affiliates could conflict with your interests. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of NACG Holdings Inc., as an indirect holder of all of our common equity, might conflict with your interests as a holder of our debt. Affiliates of NACG Holdings Inc. may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to you as a holder of the notes. In addition, NACG Holdings Inc. or its affiliates may in the future control businesses that directly compete with ours.

Risks Related to Our Business

We rely on a small number of customers from whom we receive a significant amount of our revenues.

We provide our services primarily to a small number of major integrated and independent oil and gas and other natural resources companies operating in western Canada. Revenue from our five largest customers represented approximately 91% of our total revenue for the fiscal year ended March 31, 2004 and those customers are expected to continue to provide a significant percentage of our revenues in the future. Each year any one of our customers may constitute a significant portion of our revenue. For example, for the fiscal year ended March 31, 2004, revenue generated from work for Syncrude constituted approximately 52% of our total revenue primarily due to several large projects with Syncrude and our status as one of their preferred contractors. We may not be able to replace the work generated by these projects with work from other customers. Our services to our customers are typically provided under contracts with terms ranging from six months to ten years, some of which have terms allowing for automatic or optional renewals of the contract. However, a significant number of our contracts terminate upon completion of the project without having a definite termination date, and the contracts typically allow the customer to reduce or eliminate the work which we are to perform. In addition, the customers may choose not to extend the existing contracts or enter into new contracts. The loss of or significant reduction in business with one or more of these customers could have a material adverse effect on our business.

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Fixed price and unit price contracts with our customers expose us to losses when our estimates of project costs are too low or when we fail to perform within our cost estimates.

Our recent operating results have been adversely affected by losses incurred on fixed price and unit price contracts. The terms of these contracts require us to guarantee the price of the services we provide and assume the risk that our costs to perform the services and provide the materials will be greater than anticipated. Our profitability under such contracts is therefore dependent upon our ability to accurately predict the costs associated with our services. These costs may be affected by a variety of factors, some of which may be beyond our control. Factors that contribute to changes in our costs incurred as compared to our estimates and which therefore affect profitability include, without limitation, actual site conditions which differ from those assumed in the original bid, the availability and skill level of workers in the geographic location of the project, inclement weather, equipment productivity and timing differences that result from actual project starting time as compared to projected starting time and the general coordination of work inherent in all substantial projects we undertake. When we are unable to accurately estimate the costs of fixed price and unit price contracts, or when we incur unrecoverable cost overruns, some projects will have lower margins than anticipated or even incur losses, which will materially adversely impact our results of operations, financial condition and cash flow.

Approximately 29% and 56% of our revenue for the fiscal year ended March 31, 2004 and the nine months ended December 31, 2004, respectively, was derived from fixed price and unit price contracts. However, going forward, the percentage of our revenue derived from fixed price and unit price contracts is expected to increase as several of the contracts recently entered into between our joint venture Noramac and CNRL, including the 10-year overburden removal contract and a large site grading contract, are unit price and/or fixed price contracts. Given the magnitude of the projected revenues from these contracts with CNRL as compared to the revenues expected to be earned from other contracts, if we underestimated the costs to perform these contracts, or if we were to incur unrecoverable cost overruns on these projects, it is likely that we would be unable to service our debt obligations.

Until we establish and maintain effective internal controls and procedures for financial reporting, we may not have appropriate procedures in place to eliminate future financial reporting inaccuracies or delays.

We have had to restate our financial statements for the first and second quarters of fiscal 2005, primarily due to certain inaccurate expense accruals. During the preparation of our financial statements for the third quarter of fiscal 2005, we discovered a number of invoices recorded in the third quarter of fiscal 2005 which were related to costs actually incurred in the first and second quarters of fiscal 2005. A review of our accounting and control procedures identified a number of deficiencies in our financial reporting processes and internal controls that contributed to several misstated amounts as detailed in note 3 to our unaudited interim consolidated financial statements for the nine months ended December 31, 2004 included elsewhere in this prospectus.

While we have begun to evaluate our accounting and control procedures relating to the causes for the misstatements, we may be unable to implement the changes required to provide accurate and timely operating and financial reports. Failure to do so would have a material adverse effect on our business, financial condition and results of operations. Until we establish and maintain effective internal controls and procedures for financial reporting, we may not have appropriate procedures in place to eliminate financial statement inaccuracies or delays in the future.

If our access to the surety market were to be restricted in the future, or if our demand for surety bonds were to increase significantly, our business could be impaired.

Like all businesses providing similar services, we are at times required to post bid or performance bonds issued by a financial institution known as a surety. The surety industry experiences periods of unsettled and volatile markets, usually in the aftermath of substantial loss exposures or corporate bankruptcies with significant surety exposure. Historically, these types of events have caused reinsurers and sureties to reevaluate their committed levels of underwriting and required returns. As needed in the ordinary course of business, we have been able to secure necessary bonds and we will seek opportunities to expand our surety relationships. However, under our existing bonding arrangements, we may only obtain surety bonds to the extent they are fully secured by letters of credit. If for any reason, whether because of our financial condition, our level of secured debt or general conditions in the

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bond market, our bonding capacity becomes insufficient to satisfy our future bonding requirements, our business could be impaired.

We are dependent upon continued outsourcing by our customers of mining and site preparation services.

Outsourced mining and site preparation services constitute a large portion of the work we perform for our customers. For example, our mining project revenues constituted approximately 29%, 29% and 52% of our revenues in the fiscal years ended March 31, 2004, 2003 and 2002, respectively. The election by one or more of our customers to perform some or all of these services themselves, rather than outsourcing the work to us, could have a material adverse impact on our business.

Changes in oil and gas prices could cause our customers to slow down or curtail their current production and future expansions which would in turn reduce our revenue from those customers.

The profitability and growth of our customers may be impacted by the prices of oil and gas. Prices for oil are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil, market uncertainty and a variety of additional factors beyond our control. Such factors include weather conditions, the condition of the Canadian and U.S. economies, the actions of the Organization of Petroleum Exporting Countries, governmental regulation, political stability in the Middle East, increasing foreign demand for oil and gas, war or the threat of war in oil producing regions, the foreign supply of oil and the availability of fuel from alternate sources. In addition, our customers make their major expansion investment decisions based on their long-term outlook for the prices of oil and gas and their profitability based on those prices. If they believe the prices of those commodities will remain at depressed levels or that their profitability will be adversely affected by fluctuations in currency exchange rates, they may delay or curtail their current expansion plans. Such a delay or curtailment could have a material adverse impact on our financial condition and results of operations.

Our operations are subject to weather-related factors that may cause delays in our completion of projects.

Because our operations are located in western Canada and northern Ontario, we are often subject to extreme weather conditions. While our operations are not significantly affected by normal seasonal weather patterns, extreme weather, including heavy rain and snow, can cause us to delay the completion of a project, which could result in lower margins than estimated.

Insufficient pipeline and refining capacity for heavy crude products could cause our customers to slow down or curtail their current production and future expansions which would, in turn, reduce our revenue from those customers.

While current pipeline capacity is sufficient to transport existing oil sands production to market, future production growth will require increased pipeline capacity. If such increases do not materialize, our customers may be unable to efficiently deliver increased production to market. Additionally, we expect that increases in oil sands production will require added heavy crude oil refinery capacity. Similarly, if such increased capacity or alternative markets do not materialize, future growth in demand for our customers’ products could be reduced.

Because most of our customers are located or operate in western Canada, a downturn in the energy industry in western Canada could result in a decrease in the demand for our services by our customers.

Most of our customers are located or operate in western Canada. In the nine months ended December 31, 2004, we believe we generated over half of our operating revenues from the Alberta oil sands. A downturn in the energy industry in western Canada could cause our customers to slow down or curtail their current production and future expansions which would, in turn, reduce our revenue from those customers. Such a delay or curtailment could have a material adverse impact on our financial condition and results of operations.

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Shortages of skilled labor, work stoppages or other labor disruptions at our operations or those of our principal customers or service providers could have an adverse effect on our profitability and financial condition.

Our ability to provide high-quality services on a timely basis requires an adequate number of skilled workers such as engineers, trades people and equipment operators. We may not be able to maintain an adequate skilled labor force, or our labor expenses may increase. A shortage of skilled labor would require us to curtail our planned internal growth or may require us to use less skilled labor which could adversely affect our ability to perform work.

Substantially all of our hourly employees are subject to collective bargaining agreements to which we are a party or are otherwise subject because of a bargaining relationship with the particular trade union that is a party to the collective bargaining agreement. Any work stoppage resulting from a strike or lockout could have a material adverse effect on our financial condition and results of operations.

In the province of Alberta, collective bargaining in the construction industry is conducted by sector, by registered groups consisting of an employers’ organization, on behalf of the employers, and a defined group of trade unions, on behalf of the unions in that sector. An employers’ organization which has been registered by the Labour Relations Board bargains with the trade unions named in the certificate on behalf of all employers who work in that part of the construction industry described in the certificate with whom the unions have a bargaining relationship. Any collective agreement entered into by the employers’ organization is binding on all such employers. We do not have control over the terms of such agreements but will be bound by these because of the provisions of the Labour Relations Code and the registrations.

In addition, our customers employ workers under other collective bargaining agreements. Any work stoppage or labor disruption at our key customers could significantly reduce the amount of services that we provide.

Because approximately 80% of the major projects that we pursue are awarded to us based on bid proposals, competitors with lower cost structures may underbid us, subsequently impeding our growth.

Approximately 80% of the major projects that we pursue are awarded to us based on bid proposals. We may compete in the future for these projects against companies that may have substantially greater financial and other resources than we do. Some competitors may have lower cost structures, including lower labor costs based on the use of non-union labor, and may be able to provide their services at lower rates than we can. Further, public sector work is often performed by governmental agencies. Our growth may be impacted to the extent that we are unable to successfully bid against these companies.

Cost overruns by our customers on their projects may cause our customers to terminate future projects or expansions which could adversely affect the amount of work we receive from those customers.

Oil sands development projects require substantial capital expenditures. In the past, several of our customers’ projects have experienced significant cost overruns, impacting their returns. As new projects are contemplated or built, if cost overruns continue to challenge our customers, they could reassess future projects and expansions which could adversely affect the amount of work we receive from our customers, causing an adverse effect on our financial condition.

A significant amount of our revenues are generated by providing non-recurring services.

We believe a majority of our revenue for the fiscal year ended March 31, 2004 was derived from projects which we consider to be non-recurring. This revenue primarily relates to site preparation and piling services provided for the construction of extraction, upgrading and other oil sands mining infrastructure projects. Future revenues from these types of services will depend upon customers expanding existing mines and developing new projects.

Penalty clauses in our customer contracts could expose us to losses if total project costs exceed original estimates or if projects are not completed by specified completion date milestones.

A portion of our revenue is derived from contracts which have performance incentives and penalties depending on the total cost of a project as compared to the original estimate. We could incur significant penalties based on cost overruns. In addition, the total project cost as defined in the contract may include not only our work, but also work performed by other contractors. As a result, we could incur penalties due to work performed by others over which

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we have no control. We may also incur penalties if projects are not completed by specified completion date milestones. Such penalties, if incurred, could have a significant impact on our profitability under these contracts.

Demand for our services may be adversely impacted by regulations affecting the energy industry.

Our principal customers are energy companies involved in the development of the Alberta oil sands and natural gas production. The operations of these companies, including the mining operations in the oil sands, are subject to or impacted by a wide array of regulations in the jurisdictions where they operate, including those directly impacting mining activities and those indirectly affecting their businesses, such as applicable environmental laws. As a result of changes in regulations and laws relating to the energy production industry including the operation of mines, our customers’ operations could be disrupted or curtailed by governmental authorities. The high cost of compliance with applicable regulations may induce customers to discontinue or limit their operations, and may discourage companies from continuing development activities. As a result, demand for our services could be substantially affected by regulations adversely impacting the energy industry.

Environmental laws and regulations may expose us to liability arising out of our operations or the operations of our customers in and around sensitive environmental areas.

Our operations are subject to numerous environmental protection laws and regulations that are complex and stringent. Contracts with our customers require us to operate in compliance with these laws and regulations. We regularly perform work in and around sensitive environmental areas such as rivers, lakes and forests. Significant fines and penalties may be imposed on us or our customers for non-compliance with environmental laws and regulations, and our contracts generally require us to indemnify our customers for environmental claims suffered by them as a result of our actions. In addition, some environmental laws provide for joint and several strict liability for remediation of releases of hazardous substances, rendering a person liable for environmental damage, without regard to negligence or fault on the part of such person. In addition to potential liabilities that may be incurred in satisfying these requirements, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances. These laws and regulations may expose us to liability arising out of the conduct of operations or conditions caused by others, or for our acts which were in compliance with all applicable laws at the time these acts were performed.

We own, or lease, and operate several properties that have been used for a number of years for the storage and maintenance of equipment and other industrial uses upon which fuel may have been spilled, or hydrocarbons or other wastes which may have been disposed of or released. Any release of substances by us or by third parties who previously operated on these properties may be subject to laws which impose joint and several liability, without regard to fault or the legality of the original conduct, on certain classes of persons who are considered to be responsible for the release of hazardous substances into the environment. Under such laws, we could be required to remove or remediate previously disposed wastes and clean up contaminated property.

We are dependent on our ability to lease equipment.

A portion of our equipment fleet is currently leased from third parties. Further, we anticipate leasing substantial amounts of equipment to perform the work on contracts for which we have been engaged in the upcoming year, particularly, the overburden removal contract with CNRL. Other projects on which we are engaged in the future may require us to lease additional equipment. If equipment lessors are unable or unwilling to provide us with the equipment we need to perform our work, our results of operations will be materially adversely affected.

Our projects expose us to potential professional liability, product liability, warranty or other claims.

We install deep foundations in congested areas and provide construction management services for significant projects. Notwithstanding the fact that we will generally not accept liability for consequential damages in our contracts, any catastrophic occurrence in excess of insurance limits at projects where our structures are installed or services are performed could result in significant professional liability, product liability, warranty or other claims against us. Such liabilities could potentially exceed our current insurance coverage and the fees we derive from

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those services. A partially or completely uninsured claim, if successful and of a significant magnitude, could result in substantial losses.

We may not be able to achieve the expected benefits from any future acquisitions, which would adversely affect our financial condition and results of operations.

We intend to pursue selective acquisitions as a method of expanding our business. If we do not successfully integrate acquisitions, we may not realize anticipated operating advantages and cost savings. The integration of companies that have previously operated separately involves a number of risks, including:

• demands on management related to the increase in our size after an acquisition;

• the diversion of our management’s attention from the management of daily operations;

• difficulties in implementing or unanticipated costs of accounting, estimating, reporting and other systems;

• difficulties in the assimilation and retention of employees; and

• potential adverse effects on operating results.

We may not be able to maintain the levels of operating efficiency that acquired companies will have achieved or might achieve separately. Successful integration of each of their operations will depend upon our ability to manage those operations and to eliminate redundant and excess costs. Because of difficulties in combining operations, we may not be able to achieve the cost savings and other size-related benefits that we hoped to achieve after these acquisitions which would harm our financial condition and results of operations.

Aboriginal peoples may make claims against our customers or their projects regarding the lands on which their projects are located.

Aboriginal peoples have claimed aboriginal title and rights to a substantial portion of western Canada. Any claims that may be asserted against our customers, if successful, could have an adverse effect on our customers which may, in turn, negatively impact our business.

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THE EXCHANGE OFFER

Registration Rights

At the closing of the offering of the original notes, we entered into the registration rights agreement with the initial purchaser pursuant to which we agreed, for the benefit of the holders of the original notes, at our cost,

• within 90 days after the date of the original issuance of the original notes, to file an exchange offer registration statement with the SEC with respect to the exchange offer for the exchange notes, and

• to use our reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act within 180 days after the date of original issuance of the original notes.

Upon the exchange offer registration statement being declared effective, we agreed to offer the exchange notes in exchange for surrender of the original notes. We agreed to keep the exchange offer open for not less than 30 days, or longer if required by applicable law.

For each original note surrendered to us pursuant to the exchange offer, the holder of such original note will receive an exchange note having a principal amount equal to that of the surrendered original note. Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the original note surrendered in exchange therefor or, if no interest has been paid on such original note, from the date of its original issue. The registration rights agreement also provides an agreement to include in the prospectus for the exchange offer certain information necessary to allow a broker-dealer who holds original notes that were acquired for its own account as a result of market-making activities or other ordinary course trading activities (other than original notes acquired directly from us or one of our affiliates) to exchange such original notes pursuant to the exchange offer and to satisfy the prospectus delivery requirements in connection with resales of exchange notes received by such broker-dealer in the exchange offer. We agreed to maintain the effectiveness of the registration statement for these purposes for 180 days.

The preceding agreement is needed because any broker-dealer who acquires original notes for its own account as a result of market-making activities or other trading activities is required to deliver a prospectus meeting the requirements of the Securities Act. This prospectus covers the offer and sale of the exchange notes pursuant to the exchange offer made pursuant to this prospectus and the resale of exchange notes received in the exchange offer by any broker-dealer who held original notes acquired for its own account as a result of market-making activities or other trading activities other than original notes acquired directly from us or one of our affiliates.

Under existing interpretations of the staff of the SEC contained in several no-action letters to third parties, after the exchange offer the exchange notes will in general be free of the transfer restrictions and covenants regarding exchange and registration rights applicable to the original notes and tradeable without further registration under the Securities Act. However, any purchaser of original notes who is an “affiliate” of ours or who intends to participate in the exchange offer for the purpose of distributing the related exchange notes

• will not be able to rely on the interpretation of the staff of the SEC,

• will not be able to tender its original notes in the exchange offer, and

• must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the original notes unless such sale or transfer is made pursuant to an exemption from such requirements.

Each holder of the original notes, other than certain specified holders, who wishes to exchange original notes for exchange notes in the exchange offer will be required to make certain representations, including that

• it is not an affiliate of ours,

• any exchange notes to be received by it were acquired in the ordinary course of its business,

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• at the time of commencement of the exchange offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes, and

• if the holder is not a broker-dealer, the holder is not engaged in and does not intend to engage in a distribution of the exchange notes.

In the event that any changes in law or the applicable interpretations of the staff of the SEC do not permit us to effect the exchange offer, or if under various circumstances, some holders of original notes so request, or in the case of any holder that participates in the exchange offer, such holder does not receive exchange notes on the date of the exchange that may be sold without restriction under U.S. state and federal securities laws, other than due solely to the status of such holder as an affiliate of us, we will, at our cost,

• as promptly as practicable, file a shelf registration statement (which may be an amendment of the registration statement of which this prospectus is a part) covering resales of the original notes,

• use our reasonable efforts to cause the shelf registration statement to be declared effective under the Securities Act, and

• use all reasonable efforts to keep effective the shelf registration statement until the earlier of two years after the date of original issuance of the original notes, the date the notes become eligible for resale without volume restrictions under Rule 144 under the Securities Act, or until all notes covered by the shelf registration statement have been sold.

We will, in the event of the filing of a shelf registration statement, provide to each holder copies of the prospectus which is a part of the shelf registration statement and take certain other actions as are required to permit unrestricted resales of the original notes. A holder of original notes that sells such original notes pursuant to the shelf registration statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to various civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement which are applicable to such holder, including various indemnification obligations. In addition, each holder of the original notes will be required to deliver information to be used in connection with the shelf registration statement within the time period set forth in the registration rights agreement in order to have their original notes included in the shelf registration statement and to benefit from the provisions regarding additional interest set forth in the following paragraph.

If we fail to meet the targets listed above, then we will pay additional interest on the original notes as follows:

• if the exchange offer registration statement is not filed with the SEC on or prior to 90 days after the issue date, or notwithstanding that we have consummated or will consummate an exchange offer, we are required to file a shelf registration statement and such shelf registration statement is not filed on or prior to the date required by the registration rights agreement, then commencing on the day after either such required filing date, additional interest shall accrue on the principal amount of the notes at 0.25% per annum for the first 90 days immediately following each such filing date, such additional interest increasing by an additional 0.25% per annum at the end of each subsequent 90-day period; or

• if the exchange offer registration statement is not declared effective by the SEC on or prior to 180 days after the issue date, or notwithstanding that we have consummated or will consummate an exchange offer, we are required to file a shelf registration statement and such shelf registration statement is not declared effective by the SEC on or prior to the 90th day following the date such shelf registration statement was filed, then, commencing on the day after either such requirement effective date, additional interest shall accrue on the principal amount of the notes at 0.25% per annum for the first 90 days immediately following such date, such additional interest increasing by an additional 0.25% per annum at the end of each subsequent 90-day period; or

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• if we have not exchanged exchange notes for all notes validly tendered in accordance with the terms of the exchange offer on or prior to the 225th day after the issue date or, if applicable, the shelf registration statement has been declared effective and such shelf registration statement ceases to be effective at any time prior to the second anniversary of the issue date, other than after such time as all notes have been disposed of thereunder, then additional interest shall accrue on the principal amount of the notes at 0.25% per annum for the first 90 days commencing on either the 226th day after such issue date, in the case of our failure to exchange exchange notes for all notes validly tendered in accordance with the terms of the exchange offer, or the day the shelf registration statement had been declared effective and such shelf registration statement ceases to be effective at any time prior to the second anniversary of the issue date, such additional interest increasing by an additional 0.25% per annum at the end of each subsequent 90-day period;

provided, however, that the additional interest on the notes may not accrue under more than one of the foregoing circumstances at any one time and at no time shall the aggregate amount of additional interest accruing exceed in the aggregate 2.0% per annum; provided, further, however, that:

• upon the filing of the exchange offer registration statement or a shelf registration statement, in the first circumstance above;

• upon the effectiveness of the exchange offer registration statement or a shelf registration statement, in the second circumstance above; or

• upon the exchange of exchange notes for all notes tendered, or upon the effectiveness of the shelf registration statement which had ceased to remain effective, respectively, in the third circumstance above;

additional interest on notes as a result of such circumstance, as the case may be, shall cease to accrue. Any amounts of additional interest due pursuant to such circumstance will be payable in cash on the same original interest payment dates as the notes.

This summary of the material provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part.

Except as set forth above, after consummation of the exchange offer, holders of original notes which are the subject of the exchange offer have no registration or exchange rights under the registration rights agreement. See “—Consequences of Failure to Exchange,” and “—Resale of the Exchange Notes; Plan of Distribution.”

Consequences of Failure to Exchange

The original notes which are not exchanged for exchange notes pursuant to the exchange offer and are not included in a resale prospectus which, if required, will be filed as part of an amendment to the registration statement of which this prospectus is a part, will remain restricted securities and subject to restrictions on transfer. The circumstances under which we would file a resale prospectus are more fully described under “—Resale of the Exchange Notes; Plan of Distribution.” The original notes may only be resold

(1) to us, upon redemption of the original notes or otherwise,

(2) so long as the original notes are eligible for resale pursuant to Rule 144A, to a person whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act, purchasing for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or other transfer is being made in reliance on Rule 144A,

(3) in an offshore transaction in accordance with Regulation S under the Securities Act,

(4) pursuant to an exemption from registration in accordance with Rule 144, if available, under the Securities Act,

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(5) in reliance on another exemption from the registration requirements of the Securities Act, or

(6) pursuant to an effective registration statement under the Securities Act.

In all of the situations discussed above, the resale must be in accordance with any applicable securities laws of any state of the United States and subject to certain requirements of the registrar or co-registrar being met, including receipt by the registrar or co-registrar of a certification and, in the case of (3), (4) and (5) above, an opinion of counsel reasonably acceptable to us and the registrar.

To the extent that original notes are tendered and accepted for exchange pursuant to the exchange offer, the trading market for original notes that remain outstanding may be significantly more limited, which might adversely affect the liquidity of the original notes not tendered for exchange. The extent of the market and the availability of price quotations for original notes will depend upon a number of factors, including the number of holders of original notes remaining at such time and the interest in maintaining a market in such original notes on the part of securities firms. An issue of securities with a smaller outstanding market value available for trading, called the “float,” may command a lower price than would a comparable issue of securities with a greater float. Therefore, the market price for original notes that are not exchanged in the exchange offer may be affected adversely to the extent that the amount of original notes exchanged pursuant to the exchange offer reduces the float. The reduced float also may tend to make the trading price of the original notes that are not exchanged more volatile.

Issuance of the exchange notes in exchange for the original notes pursuant to the exchange offer will be made following the prior satisfaction, or waiver, of the conditions set forth in “—Conditions to the Exchange Offer” and only after timely receipt by the exchange agent of such original notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, holders of original notes desiring to tender such original notes in exchange for exchange notes should allow sufficient time to ensure timely delivery of all required documentation. Neither we, the exchange agent nor any other person is under any duty to give notification of defects or irregularities with respect to the tenders of original notes for exchange. Original notes that may be tendered in the exchange offer but which are not validly tendered will, following the consummation of the exchange offer, remain outstanding and will continue to be subject to the same transfer restrictions currently applicable to such original notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, a copy of which is attached to this prospectus as Annex A, we will accept any and all original notes validly tendered and not withdrawn prior to the Expiration Date. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of original notes accepted in the exchange offer. Holders may tender some or all of their original notes pursuant to the exchange offer. However, original notes may be tendered only in integral multiples of $1,000 principal amount.

The form and terms of the exchange notes are the same as the form and terms of the original notes, except that

• the exchange notes will have been registered under the Securities Act and will not bear legends restricting their transfer pursuant to the Securities Act, and

• except as otherwise described above, holders of the exchange notes will not be entitled to the rights of holders of original notes under the registration rights agreement.

The exchange notes will evidence the same debt as the original notes which they replace, and will be issued under, and be entitled to the benefits of, the indenture which governs all of the notes.

Solely for reasons of administration and for no other purpose, we have fixed the close of business on , 2005 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Only a registered holder of original notes or such holder’s legal representative or attorney-in-fact as reflected on the records of the trustee under the indenture may participate in the

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exchange offer. There will be no fixed record date for determining registered holders of the original notes entitled to participate in the exchange offer.

Holders of the original notes do not have any appraisal or dissenters’ rights under applicable Canadian law or the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder.

We shall be deemed to have accepted validly tendered original notes when, as and if we have given oral or written notice of such acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of the original notes for the purposes of receiving the exchange notes. The exchange notes delivered pursuant to the exchange offer will be delivered promptly after expiration of the exchange offer.

If any tendered original notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth in this prospectus or otherwise, certificates for any such unaccepted original notes will be returned, without expense, to the tendering holder of the original notes as promptly as practicable after the Expiration Date.

Holders who tender original notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of the original notes pursuant to the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the exchange offer. See “—Fees and Expenses.”

Expiration Date; Extensions; Amendments

The term “Expiration Date” with respect to the exchange offer shall mean 5:00 p.m., New York City time, on                 , 2005, unless we, in our sole discretion, extend the exchange offer, in which case the term “Expiration Date” shall mean the latest date and time to which the exchange offer is extended.

In order to extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice and will make a public announcement of such acceptance, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date of the exchange offer.

We reserve the right, in our sole discretion,

• to delay accepting any original notes,

• to extend the exchange offer,

• if any of the conditions set forth below under “—Conditions to the Exchange Offer” have not been satisfied, to terminate the exchange offer, or

• to amend the terms of the exchange offer in any manner.

We may effect any such delay, extension or termination by giving oral or written notice thereof to the exchange agent.

Except as specified in the second paragraph under this heading, any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders of the original notes. The exchange offer will then be extended for a period of five to 10 business days, as required by law, depending upon the significance of the amendment and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during such five to 10 business day period.

Without limiting the manner in which we may choose to make a public announcement of any delay, extension, termination or amendment of the exchange offer, we shall not have an obligation to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely release of the announcement to the Dow Jones News Service.

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Procedures for Tendering Original Notes

Tenders of Original Notes. The tender by a holder of original notes pursuant to any of the procedures set forth below will constitute the tendering holder’s acceptance of the terms and conditions of the exchange offer.

Our acceptance for exchange of original notes tendered pursuant to any of the procedures described below will constitute a binding agreement between such tendering holder and us in accordance with the terms and subject to the conditions of the exchange offer. Only holders are authorized to tender their original notes. The procedures by which original notes may be tendered by beneficial owners that are not holders will depend upon the manner in which the original notes are held.

DTC has authorized DTC participants that are beneficial owners of original notes through DTC to tender their original notes as if they were holders. To effect a tender, DTC participants should either (1) complete and sign the letter of transmittal or a facsimile of the letter of transmittal, have the signature thereon guaranteed if required by Instruction 1 of the letter of transmittal, and mail or deliver the letter of transmittal or such facsimile pursuant to the procedures for book-entry transfer set forth below under “—Book-Entry Delivery Procedures,” or (2) transmit their acceptance to DTC through the DTC Automated Tender Offer Program, or “ATOP,” for which the transaction will be eligible, and follow the procedures for book-entry transfer, set forth below under “—Book-Entry Delivery Procedures.”

Tender of Original Notes Held in Physical Form. To tender effectively original notes held in physical form pursuant to the exchange offer,

• a properly completed letter of transmittal applicable to such notes (or a facsimile of the letter of transmittal) duly executed by the holder of such notes, and any other documents required by the letter of transmittal, must be received by the exchange agent at one of its addresses set forth below, and tendered original notes must be received by the exchange agent at such address (or delivery effected through the deposit of original notes into the exchange agent’s account with DTC and making book-entry delivery as set forth below) on or prior to the Expiration Date of the exchange offer, or

• the tendering holder must comply with the guaranteed delivery procedures set forth below.

Letters of transmittal or original notes should be sent only to the exchange agent and should not be sent to us.

Tender of Original Notes Held Through a Custodian. To tender effectively original notes that are held of record by a custodian bank, depository, broker, trust company or other nominee, the beneficial owner of such original notes must instruct such holder to tender the original notes on the beneficial owner’s behalf. A letter of instructions from the record owner to the beneficial owner may be included in the materials provided along with this prospectus which may be used by the beneficial owner in this process to instruct the registered holder of such owner’s original notes to effect the tender.

Tender of Original Notes Held Through DTC. To tender effectively original notes that are held through DTC, DTC participants should either

• properly complete and duly execute the letter of transmittal (or a facsimile of the letter of transmittal), and any other documents required by the letter of transmittal, and mail or deliver the letter of transmittal or such facsimile pursuant to the procedures for book-entry transfer set forth below, or

• transmit their acceptance through ATOP, for which the transaction will be eligible, and DTC will then edit and verify the acceptance and send an Agent’s Message to the exchange agent for its acceptance.

Delivery of tendering original notes held through DTC must be made to the exchange agent pursuant to the book-entry delivery procedures set forth below or the tendering DTC participant must comply with the guaranteed delivery procedures set forth below.

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The method of delivery of original notes and letters of transmittal, any required signature guarantees and all other required documents, including delivery through DTC and any acceptance or Agent’s Message transmitted through ATOP, is at the election and risk of the person tendering original notes and delivering letters of transmittal. Except as otherwise provided in the letter of transmittal, delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, it is suggested that the holder use properly insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the exchange agent prior to such date.

Except as provided below, unless the original notes being tendered are deposited with the exchange agent on or prior to the Expiration Date, accompanied by a properly completed and duly executed letter of transmittal or a properly transmitted Agent’s Message, we may, at our option, reject such tender. Exchange of exchange notes for original notes will be made only against deposit of the tendered original notes and delivery of all other required documents.

Book-Entry Delivery Procedures. The exchange agent will establish accounts with respect to the original notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in DTC may make book-entry delivery of the original notes by causing DTC to transfer such original notes into the exchange agent’s account in accordance with DTC’s procedures for such transfer. However, although delivery of original notes may be effected through book-entry at DTC, the letter of transmittal (or facsimile of the letter of transmittal), with any required signature guarantees or an Agent’s Message in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the exchange agent at one or more of its addresses set forth in this prospectus on or prior to the Expiration Date, or compliance must be made with the guaranteed delivery procedures described below. Delivery of documents to DTC does not constitute delivery to the exchange agent. The confirmation of a book-entry transfer into the exchange agent’s account at DTC as described above is referred to in this prospectus as a “Book-Entry Confirmation.”

The term “Agent’s Message” means a message transmitted by DTC to, and received by, the exchange agent and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from each participant in DTC tendering the original notes and that such participant has received the letter of transmittal and agrees to be bound by the terms of the letter of transmittal and we may enforce such agreement against such participant.

Signature Guarantees. Signatures on all letters of transmittal must be guaranteed by a recognized member of the Medallion Signature Guarantee Program or by any other “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 promulgated under the Exchange Act, each of the foregoing, an “Eligible Institution,” unless the original notes tendered thereby are tendered

• by a registered holder of original notes (or by a participant in DTC whose name appears on a DTC security position listing as the owner of such original notes) who has not completed either the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal, or

• for the account of an Eligible Institution.

See Instruction 1 of the letter of transmittal. If the original notes are registered in the name of a person other than the signer of the letter of transmittal or if original notes not accepted for exchange or not tendered are to be returned to a person other than the registered holder, then the signatures on the letter of transmittal accompanying the tendered original notes must be guaranteed by an Eligible Institution as described above. See Instructions 1 and 5 of the letter of transmittal.

Guaranteed Delivery. If a holder desires to tender original notes pursuant to the exchange offer and time will not permit the letter of transmittal, certificates representing such original notes and all other required documents to reach the exchange agent, or the procedures for book-entry transfer cannot be completed, on or prior to the Expiration Date of the exchange offer, such original notes may nevertheless be tendered if all three of the following conditions are satisfied:

• the tender is made by or through an Eligible Institution;

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• a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by us, or an Agent’s Message with respect to guaranteed delivery that is accepted by us, is received by the exchange agent on or prior to the Expiration Date, as provided below; and

• the certificates for the tendered original notes, in proper form for transfer (or a Book-Entry Confirmation of the transfer of such original notes into the exchange agent’s account at DTC as described above), together with the letter of transmittal (or facsimile of the letter of transmittal), properly completed and duly executed, with any required signature guarantees and any other documents required by the letter of transmittal or a properly transmitted Agent’s Message, are received by the exchange agent within two business days after the date of execution of the Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be sent by hand delivery, telegram, facsimile transmission or mail to the exchange agent and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery.

Notwithstanding any other provision of this section, delivery of exchange notes by the exchange agent for original notes tendered and accepted for exchange pursuant to the exchange offer will, in all cases, be made only after timely receipt by the exchange agent of such original notes (or Book-Entry Confirmation of the transfer of such original notes into the exchange agent’s account at DTC as described above), and the letter of transmittal (or facsimile of the letter of transmittal) with respect to such original notes, properly completed and duly executed, with any required signature guarantees and any other documents required by the letter of transmittal, or a properly transmitted Agent’s Message.

Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered original notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all original notes not properly tendered or any original notes our acceptance of which, in the opinion of our counsel, would be unlawful.

We also reserve the right to waive any defects, irregularities or conditions of tender as to particular original notes. The interpretation of the terms and conditions of our exchange offer (including the instructions in the letter of transmittal) by us will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of original notes must be cured within such time as we shall determine.

Although we intend to notify holders of defects or irregularities with respect to tenders of original notes through the exchange agent, neither we, the exchange agent nor any other person is under any duty to give such notice, nor shall they incur any liability for failure to give such notification. Tenders of original notes will not be deemed to have been made until such defects or irregularities have been cured or waived.

Any original notes received by the exchange agent that are not validly tendered and as to which the defects or irregularities have not been cured or waived, or if original notes are submitted in a principal amount greater than the principal amount of original notes being tendered by such tendering holder, such unaccepted or non-exchanged original notes will either be

• returned by the exchange agent to the tendering holders, or

• in the case of original notes tendered by book-entry transfer into the exchange agent’s account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described below, credited to an account maintained with such Book-Entry Transfer Facility.

By tendering, each registered holder will represent to us that, among other things,

(1) the exchange notes to be acquired by the holder and any beneficial owner(s) of the original notes in connection with the exchange offer are being acquired by the holder and any beneficial owner(s) in the ordinary course of business of the holder and any beneficial owner(s),

(2) the holder and each beneficial owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in a distribution of the exchange notes,

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(3) the holder and each beneficial owner acknowledge and agree that (x) any person participating in the exchange offer for the purpose of distributing the exchange notes must comply with the registration and prospectus delivery requirements pf the Securities Act in connection with a secondary resale transaction with respect to the exchange notes acquired by such person and cannot rely on the position of the Staff of the SEC set forth in no-action letters that are discussed under “—Resale of the Exchange Notes; Plan of Distribution,” and (y) any broker-dealer that receives exchange notes for its own account in exchange for original notes pursuant to the exchange offer must deliver a prospectus in connection with any resale of such exchange notes, but by so acknowledging, the holder shall not be deemed to admit that, by delivering a prospectus, it is an “underwriter” within the meaning of the Securities Act,

(4) neither the holder nor any beneficial owner is an “affiliate,” as defined under Rule 405 of the Securities Act, of ours except as otherwise disclosed to us in writing, and

(5) the holder and each beneficial owner understands that a secondary resale transaction described in clause (3) above should be covered by an effective registration statement containing the selling securityholder information required by Item 507 of Regulation S-K of the SEC.

Each broker-dealer that receives exchange notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See “—Resale of the Exchange Notes; Plan of Distribution.”

Withdrawal of Tenders

Except as otherwise provided in this prospectus and the letter of transmittal, tenders of original notes pursuant to the exchange offer may be withdrawn, unless accepted for exchange as provided in the exchange offer, at any time prior to the Expiration Date of the exchange offer.

To be effective, a written or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in this prospectus prior to the Expiration Date of the exchange offer. Any such notice of withdrawal must

• specify the name of the person having deposited the original notes to be withdrawn,

• identify the original notes to be withdrawn, including the certificate number or numbers of the particular certificates evidencing the original notes (unless such original notes were tendered by book-entry transfer), and aggregate principal amount of such original notes, and

• be signed by the holder in the same manner as the original signature on the letter of transmittal (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the trustee under the indenture register the transfer of the original notes into the name of the person withdrawing such original notes.

If original notes have been delivered pursuant to the procedures for book-entry transfer set forth in “—Procedures for Tendering Original Notes—Book-Entry Delivery Procedures,” any notice of withdrawal must specify the name and number of the account at the appropriate book-entry transfer facility to be credited with such withdrawn original notes and must otherwise comply with such book-entry transfer facility’s procedures.

If the original notes to be withdrawn have been delivered or otherwise identified to the exchange agent, a signed notice of withdrawal meeting the requirements discussed above is effective immediately upon written or facsimile notice of withdrawal even if physical release is not yet effected. A withdrawal of original notes can only be accomplished in accordance with these procedures.

All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by us in our sole discretion, which determination shall be final and binding on all parties. No withdrawal

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of original notes will be deemed to have been properly made until all defects or irregularities have been cured or expressly waived. Neither we, the exchange agent nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or revocation, nor shall we or they incur any liability for failure to give any such notification. Any original notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no exchange notes will be issued with respect thereto unless the original notes so withdrawn are retendered. Properly withdrawn original notes may be retendered by following one of the procedures described above under “—Procedures for Tendering Original Notes” at any time prior to the Expiration Date of the exchange offer.

Any original notes which have been tendered but which are not accepted for exchange due to the rejection of the tender due to uncured defects or the prior termination of the exchange offer, or which have been validly withdrawn, will be returned to the holder of such original notes unless otherwise provided in the letter of transmittal, promptly after the Expiration Date of the exchange offer or, if so requested in the notice of withdrawal, promptly after receipt by us of notice of withdrawal without cost to such holder.

Conditions to the Exchange Offer

The exchange offer shall not be subject to any conditions, other than that

• the SEC has issued an order or orders declaring the indenture governing the notes qualified under the Trust Indenture Act of 1939,

• the exchange offer, or the making of any exchange by a holder, does not violate applicable law or any applicable interpretation of the staff of the SEC,

• no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer, which, in our judgment, might impair our ability to proceed with the exchange offer,

• there shall not have been adopted or enacted any law, statute, rule or regulation which, in our judgment, would materially impair our ability to proceed with the exchange offer, and

• there shall not have occurred any material change in the financial markets in the United States or any outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States, in our judgment, would materially impair our ability to proceed with the exchange offer.

Any determination regarding the satisfaction or waiver of conditions will be made on or before the Expiration Date. If we determine that any of the conditions to the exchange offer are not satisfied, we may

• refuse to accept any original notes and return all tendered original notes to the tendering holders,

• extend the exchange offer and retain all original notes tendered prior to the Expiration Date applicable to the exchange offer, subject, however, to the rights of holders to withdraw such original notes (see “—Withdrawal of Tenders”), or

• waive such unsatisfied conditions with respect to the exchange offer and accept all validly tendered original notes which have not been withdrawn.

If such waiver constitutes a material change to the exchange offer, we will promptly disclose such waiver by means of a prospectus supplement that will be distributed to the registered holders, and will extend the exchange offer for a period of five to 10 business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during such five to 10 business day period.

Exchange Agent

Wells Fargo Bank, N.A., the trustee under the indenture governing the notes, has been appointed as exchange agent for the exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus

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or of the letter of transmittal and requests for Notices of Guaranteed Delivery and other documents should be directed to the exchange agent addressed as follows:

By Overnight Delivery or Regular Mail:

Wells Fargo Bank, N.A.

Corporate Trust Operations

Sixth and Marquette

MAC N9303-121

Minneapolis, MN 55479

By Facsimile:

(612) 667-4927

Confirm by

Telephone:

(800) 344-5128

By Registered or Certified Mail:

Wells Fargo Bank, N.A.

Corporate Trust Operations

MAC N9303-121

P.O. Box 1517

Minneapolis, MN 55480-1517

Fees and Expenses

We will bear the expenses of soliciting tenders of original notes. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by our officers and regular employees.

No dealer-manager has been retained in connection with the exchange offer and no payments will be made to brokers, dealers or others soliciting acceptance of the exchange offer. However, reasonable and customary fees will be paid to the exchange agent for its services and it will be reimbursed for its reasonable out-of-pocket expenses.

We estimate that our out-of-pocket expenses for the exchange offer will be approximately $200,000. Such expenses include fees and expenses of the exchange agent and the trustee under the indenture, accounting and legal fees and printing costs, among others.

We will pay all transfer taxes, if any, applicable to the exchange of the original notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of the original notes pursuant to the exchange offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder.

Accounting Treatment

The exchange notes will be recorded at the carrying value of the original notes and no gain or loss for accounting purposes will be recognized. The expenses of the exchange offer will be amortized over the term of the exchange notes.

Resale of the Exchange Notes; Plan of Distribution

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of

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exchange notes received in exchange for original notes where such original notes were acquired as a result of market-making activities or other trading activities. We have agreed that we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 2005, which is 90 days after the date of this prospectus, all dealers effecting transactions in the exchange notes, whether or not participating in this distribution, may be required to deliver a prospectus. This requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions

• in the over-the-counter market,

• in negotiated transactions,

• through the writing of options on the exchange notes or a combination of such methods of resale,

• at market prices prevailing at the time of resale,

• at prices related to such prevailing market prices, or

• at negotiated prices.

Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes.

Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission on concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver a prospectus and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

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USE OF PROCEEDS

The exchange offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes offered by this prospectus. In consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange original notes in like principal amount, the form and terms of which are the same as the form and terms of the exchange notes, except as otherwise described in this prospectus under “The Exchange Offer—Terms of the Exchange Offer.” The original notes surrendered in exchange for the exchange notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the exchange notes will not result in any increase in our indebtedness.

Proceeds from the sale of the original notes of approximately $76.3 million, plus proceeds of $7.5 million from our sale of a series of senior preferred stock, were used to refinance existing bank indebtedness of approximately $61.3 million and to pay related fees and expenses of approximately $6.0 million. The remaining proceeds will be used for general corporate purposes. See “Capitalization” and “Related Party Transactions—Terms of Senior Preferred Stock.”

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CAPITALIZATION

The following table sets forth our cash and consolidated capitalization at December 31, 2004 on an actual basis, and at February 28, 2005, on an actual basis and as adjusted to give effect to the sale of the original notes and the application of the net proceeds as described under “Use of Proceeds.” The following table should be read in conjunction with our historical consolidated financial statements and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each included elsewhere in this prospectus.

	December 31, 2004		February 28, 2005
	Actual		Actual		As Adjusted
	(dollars in thousands)
Cash	$	3,344	$	4,210	$	19,903
Debt:
Existing revolving credit facility		10,000		20,007		—
New revolving credit facility (a)		—		—		—
Term loans		44,000		41,250		—
New senior secured notes (b)		—		—		76,345
Obligations under capital leases		5,879		7,313		7,313
8¾% senior notes due 2011 (c)		240,400		246,700		246,700
Redeemable preferred stock (d)		—		—		8,500
Derivative financial instruments (e)		22,600		16,300		16,300
Total debt (f)		322,879		331,570		355,158
Shareholder’s equity (f)(g)		96,938		101,700		92,843
Total capitalization	$	419,817	$	433,270	$	448,001

(a) We entered into a $40.0 million revolving credit facility at the closing of sale of the original notes. As of June 1, 2005, we had approximately $16.6 million of available borrowings under the new revolving credit facility at closing after taking into account $20.0 million of outstanding and undrawn letters of credit. See “Description of Certain Indebtedness—New Revolving Credit Facility.”

(b) Equivalent to US$60.5 million based on the Bank of Canada nominal noon exchange rate of C$1.2623 = US$1.00 as of May 19, 2005, the date of the sale of the original notes.

(c) Equivalent to US$200.0 million based on the Bank of Canada nominal noon exchange rate of C$1.2020 = US$1.00 as of December 31, 2004 and C$1.2314 = US$1.00 as of February 28, 2005.

(d) At the closing of the sale of the original notes, we issued preferred stock to certain shareholders of NACG Holdings Inc. in exchange for $7.5 million in cash. Additionally, we issued $1.0 million of preferred stock to one of the counterparties to the Swap Agreements. See “Related Party Transactions—Terms of Senior Preferred Stock” and “Description of Certain Indebtedness—New Revolving Credit Facility.”

(e) Consists of the liability recorded in our financial statements in accordance with Canadian GAAP associated with derivative financial instruments which hedge the foreign currency risk associated with the U.S. dollar-denominated 8¾% senior notes due 2011.

(f) The following amounts as calculated under U.S. GAAP differ from the amounts under Canadian GAAP due to the difference in the method of accounting for derivative and hedging activities:

	December 31, 2004		February 28, 2005
	Actual		Actual		As Adjusted
	(in thousands)
Total debt in accordance with U.S. GAAP	$	337,571	$	339,913	$	363,501
Shareholder’s equity in accordance with U.S. GAAP		82,246		93,357		84,500

(g) As adjusted amount reflects the Canadian GAAP-required (i) write-off of deferred financing costs relating to the existing senior secured credit facility and (ii) recognition of certain fees and expenses associated with this offering.

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SELECTED HISTORICAL FINANCIAL INFORMATION

North American Energy Partners Inc. was formed in October 2003 and had no operations before November 26, 2003. As a result, the selected historical consolidated financial information presented below as of and for each of the fiscal years ended March 31, 2000, 2001, 2002 and 2003 is derived from the audited consolidated financial statements of our predecessor company, Norama Ltd. The selected consolidated historical financial information presented below for the year ended March 31, 2004 is constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004. The selected consolidated historical financial information presented below for the nine months ended December 31, 2003 is constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical unaudited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to December 31, 2003. The consolidated financial information for the periods before November 26, 2003 are not comparable in all respects to the consolidated financial information for periods after November 26, 2003. In the opinion of our management, the unaudited historical consolidated financial statements include all adjustments necessary for a fair presentation of our financial position and results of operations for such periods. The unaudited financial information for the nine months ended December 31, 2004 is not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2004.

The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and the related notes to those financial statements and the consolidated financial statements of Norama Ltd. and the related notes to those financial statements included elsewhere in this prospectus. All of the financial information presented below has been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP as they pertain to us, see note 19 to our audited consolidated financial statements and note 11 to our unaudited interim consolidated financial statements included elsewhere in this prospectus.

	Year Ended March 31,															Nine Months Ended December 31,
	2000			2001			2002			2003			2004(a)			2003 (a)			2004 (a)
							(dollars in thousands)									(unaudited)
Statement of Operations Data:
Revenue	$	181,157		$	247,267		$	249,351		$	344,186		$	378,533		$	275,855		$	234,532
Project costs		96,039			120,728			127,996			219,979			240,043			174,412			167,644
Equipment costs		40,728			71,518			77,289			72,228			69,102			57,550			39,741
Depreciation		7,736			10,409			11,299			10,974			13,240			7,930			14,946
Gross profit		36,654			44,612			32,767			41,005			56,148			35,963			12,201
General and administrative		7,222			9,582			12,794			12,233			14,037			8,848			15,349
Gain on sale of capital assets		(406	)		(979	)		(218	)		(2,265	)		82			(49	)		509
Amortization of intangible assets		—			—			—			—			12,928			1,968			2,971
Operating income		29,838			36,009			20,191			31,037			29,101			25,196			(6,628	)
Management fee (b)		13,420			36,550			14,400			8,000			41,070			41,070			—
Interest expense		1,276			3,034			3,786			4,173			13,474			5,556			24,811
Foreign exchange (gain) loss		—			—			(17	)		(234	)		72			5			516
Other income								(276	)		(11	)		(326	)		(418	)		(261	)
Income (loss) before income taxes		15,142			(3,575	)		2,298			19,109			(25,189	)		(21,017	)		(31,694	)
Income taxes (benefit)		6,897			(3,667	)		689			6,620			(9,492	)		(8,057	)		(5,244	)
Net earnings (loss)	$	8,245		$	92		$	1,609		$	12,489		$	(15,697	)	$	(12,960	)	$	(26,450	)
Balance Sheet Data (end of period):
Cash	$	1,924		$	11,247		$	—		$	—		$	36,595		$	21,025		$	3,344
Total assets		97,237			129,527			120,431			158,584			489,389			482,731			478,981
Total debt (c)		31,675			54,678			50,137			63,401			313,798			311,497			322,879
Total shareholder’s equity (c)		16,678			16,770			17,379			29,818			123,081			124,800			96,938
Other Financial Data:
EBITDA (d)	$	24,154		$	9,868		$	17,383		$	34,256		$	14,453		$	(5,563	)	$	11,034
Capital expenditures		15,624			18,547			8,668			22,932			7,735			5,836			20,494
Ratio of earnings to fixed charges (e)		5.4	x		—			1.3	x		4.1	x		—			—			—

(a) Amounts for the nine months ended December 31, 2003 and 2004 are unaudited. While amounts for the year ended March 31, 2004 are unaudited, they are constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004.

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(b) Management fees paid to the corporate shareholder of our predecessor company, Norama Ltd., represented fees for services rendered and were determined with reference to taxable income. Subsequent to our acquisition on November 26, 2003, these fees are no longer paid.

(c) The following amounts as calculated under U.S. GAAP differ from the amounts under Canadian GAAP due to the difference in the method of accounting for derivative and hedging activities:

	Year ended March 31,										Nine Months Ended December 31,
	2000		2001		2002		2003		2004		2003		2004
	(in thousands)
Total debt in accordance with U.S. GAAP	$	31,675	$	54,678	$	50,137	$	63,401	$	320,147	$	319,850	$	337,571
Total shareholder's equity in accordance with U.S. GAAP		16,678		16,770		17,379		29,818		116,732		116,447		82,246

(d) EBITDA is defined as earnings before interest expense, income taxes and depreciation and amortization. EBITDA is not a measure of performance under Canadian GAAP or U.S. GAAP. We believe that EBITDA is a meaningful measure of the performance of our business because it excludes items, such as depreciation, interest and taxes, that are not directly related to the operating performance of our employees and equipment. Management reviews EBITDA to determine whether capital assets are being allocated efficiently. However, EBITDA does not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with Canadian GAAP or U.S. GAAP, and EBITDA is not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of EBITDA may differ from that of other companies.

A reconciliation of net earnings (loss) to EBITDA as set forth in our consolidated statements of operations is as follows:

	Year Ended March 31,												Nine Months Ended December 31,
	2000		2001			2002		2003		2004			2003			2004
	(unaudited)
	(dollars in thousands)
Net earnings (loss)	$	8,245	$	92		$	1,609	$	12,489	$	(15,697	)	$	(12,960	)	$	(26,450	)
Adjustments:
Depreciation		7,736		10,409			11,299		10,974		13,240			7,930			14,946
Amortization		—		—			—		—		12,928			1,968			2,971
Interest expense		1,276		3,034			3,786		4,173		13,474			5,556			24,811
Income taxes		6,897		(3,667	)		689		6,620		(9,492	)		(8,057	)		(5,244	)
EBITDA	$	24,154	$	9,868		$	17,383	$	34,256	$	14,453		$	(5,563	)	$	11,034

(e) For the purposes of calculating the ratio of earnings to fixed charges, (1) earnings consist of earnings (loss) before fixed charges and income taxes and (2) fixed charges consist of interest expense on all indebtedness, including capital lease obligations. During the periods presented, no interest costs have been capitalized. The amount by which fixed charges exceeded earnings was $3,575 for the fiscal year ended March 31, 2001, $25,189 for the fiscal year ended March 31, 2004, $21,017 for the nine months ended December 31, 2003 and $31,694 for the nine months ended December 31, 2004.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this prospectus. The following discussion contains forward-looking statements, which reflect the expectations, beliefs, plans and objectives of management about future financial performance and assumptions underlying our judgments concerning the matters discussed below. These statements, accordingly, involve estimates, assumptions, judgments and uncertainties. In particular, this pertains to management’s comments on financial resources, capital spending and the outlook for our business. Our actual results could differ from those discussed in the forward-looking statements. Factors that could cause or contribute to any differences include, but are not limited to, those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”

Delay in Filing the Third Quarter Report

During the third quarter of fiscal 2005, management discovered a number of accounts payable invoices recorded in the third quarter which related to costs actually incurred in the first and second quarters of fiscal 2005. Management proceeded to review the matter and discovered a number of additional accounting errors that led management to conduct a review of our accounts and balances. The review identified a number of deficiencies in our processes and internal controls that contributed to several misstated amounts in our unaudited interim consolidated financial statements for the quarters ended June 30, 2004 and September 30, 2004. As a result, our financial statements for both quarters required restatement.

The time and effort required of our management and finance staff to review the accounts and balances and to restate the financial statements for the quarters ended June 30, 2004 and September 30, 2004 was such that it delayed preparation of our financial statements and management’s discussion and analysis of financial condition and results of operations for the fiscal third quarter ended December 31, 2004.

Overview

We provide services primarily to major oil and natural gas, petrochemical, and other natural resource companies operating in western Canada. These services are offered through three operating segments: Mining and Site Preparation, Piling, and Pipeline. The Mining and Site Preparation operating segment is involved in a variety of activities, including: surface mining for oil sands and other natural resources; overburden removal; hauling sand and gravel; supplying labor and equipment to support customers’ mining operations; construction of infrastructure associated with mining operations and reclamation activities; clearing, stripping, excavating, and grading for mining operations and other general construction projects; and underground utility installation for plant, refinery, and commercial building construction. The Piling operating segment installs all types of driven and drilled piles, caissons, and earth retention and stabilization systems for commercial buildings, industrial projects, and infrastructure projects. The Pipeline operating segment installs transmission and distribution pipe made of steel, plastic, and fiberglass materials in sizes up to, and including, 36 inches in diameter for oil and natural gas transmission.

We have been operating for over 50 years and maintain one of the largest independently-owned equipment fleets in western Canada. In serving our customers, we operate 450 pieces of heavy construction equipment and over 600 support vehicles. Our fleet size provides flexibility in scheduling and completing contract services on a timely basis and allows us to undertake long-term, large-scale projects with major operators in oil sands development and other energy sectors.

The Acquisition and Financial Statement Presentation

We are wholly-owned by NACG Preferred Corp., which is in turn wholly-owned by NACG Holdings Inc. The common equity of NACG Holdings Inc. is primarily owned by an investor group which includes The Sterling Group, L.P., Genstar Capital, L.P., investment funds managed by Perry Corp., Stephens Group, Inc. and BNP Paribas Private Capital Group, through Paribas North America, Inc., as well as our management and employees.

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Prior to November 26, 2003, North American Equipment Ltd., or “NAEL,” and North American Construction Group Inc., or “NACGI,” were wholly-owned subsidiaries of Norama Ltd., sometimes referred to as “Norama” or the “predecessor company.” On November 26, 2003, Norama sold 30 common shares of NACGI to NACG Preferred Corp. and all of the remaining 170 common shares of NACGI to NACG Acquisition Inc., our wholly-owned subsidiary. In addition, Norama sold substantially all of NAEL’s assets to NACG Acquisition Inc. The preceding events are referred to in this section as the “acquisition.” Immediately after the consummation of the acquisition, NACG Acquisition Inc. was amalgamated with NACGI and the successor company continued as NACGI.

Included in the comparative information presented for the fiscal years ended March 31, 2002, 2003 and 2004 and the nine months ended December 31, 2003 are the results of the predecessor company up to November 25, 2003, plus our results subsequent to November 26, 2003. The information after the acquisition may not be directly comparable to the information before the acquisition as a result of the buy-out of equipment leases and the effect of the revaluation of assets and liabilities to their estimated fair market values in accordance with the application of purchase accounting pursuant to Canadian and U.S. GAAP.

Accounting Policies

Certain accounting policies require management to make significant estimates and assumptions about future events that affect the amounts reported in our financial statements and the accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of management’s judgment. Actual results could differ from those estimates, and any such differences may be material to our financial statements.

Revenue recognition

Our contracts with customers fall under the following contract types: time-and-materials, unit price, cost plus and fixed price (lump sum). The contracts are generally less than one year in duration although we do have several long-term contracts.

• Time-and-materials — We provide equipment and labor on an hourly basis to fulfill customer requests. Hourly billing rates are calculated by us through careful consideration of all costs expected to be incurred to provide the requested services and incorporating a mark-up to generate the required profit margin. Revenue is recognized as the labor, equipment, materials, subcontract costs, and other services are supplied to the customer.

• Unit price — For every unit of work performed, we are paid a specified amount (for example: cubic meters of earth moved; lineal meters of pipe installed; and completed piles). The price per unit of work performed is calculated by estimating all of the costs expected to be incurred and adding a mark-up to generate the required profit margin. Revenue related to unit price contracts is recognized as applicable quantities are completed.

• Cost plus — Under this contract type, we charge and are reimbursed for all allowable or otherwise defined costs incurred to provide the requested services plus a pre-arranged fixed or variable fee that represents profit. Revenue recognition is based on actual incurred costs to date plus the applicable fee.

• Fixed price (lump sum) — The price for services performed is established at the outset of the contract and is not subject to any adjustment based on the costs incurred or our performance under the scope of the original contract. Changes in scope added by the customer are priced incrementally to the original bid or lump sum. Similar to unit price contracts, the price charged to the customer for the services performed is calculated by estimating all of the costs expected to be incurred in performing services required by the contract and adding an appropriate amount to the contract price to generate the required profit margin. Revenue on fixed price (lump sum) contracts is recognized using the percentage-of-completion method, calculated using output measures like cubic meters, lineal meters, or completed piles to date. In the absence

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of reliable output measures, we recognize revenue based upon input measures such as costs incurred to date.

Profit for each type of contract is included in revenue when its realization is reasonably assured. Estimated contract losses are recognized in full when determined. Revenue from change orders, extra work, and variations in the scope of work is recognized after both the costs are incurred or services are provided and an agreement has been reached with customers as to both the scope of work and price. Revenue from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after the completion of work under the contract. Costs incurred for bidding and obtaining contracts are expensed as incurred.

The accuracy of our revenue and profit recognition in a given period is almost solely dependent on the accuracy of our estimates of the cost to complete each project. Our cost estimates use a detailed “bottom up” approach. We believe our experience allows us to produce materially reliable estimates; however, our projects can be highly complex, and in almost every case, the profit margin estimates for a project will either increase or decrease to some extent from the amount that was originally estimated at the time of bid. Because we have many projects of varying levels of complexity and size in process at any given time, these changes in estimates can offset each other without materially impacting our profitability; however, large changes in cost estimates, particularly in the bigger, more complex projects, can have a significant effect on profitability.

Factors that can contribute to changes in estimates of contract cost and profitability include, without limitation: site conditions that differ from those assumed in the original bid, to the extent that contract remedies are unavailable; the availability and skill level of workers in the geographic location of the project; the availability and proximity of materials; the accuracy of the original bid and subsequent estimates; inclement weather and timing; and coordination issues inherent in all projects. Until we feel we can accurately estimate job profitability, no profit on the related project is recognized. The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins, may cause fluctuations in gross profit between periods, and these fluctuations may be significant.

Capital assets

The most significant estimate in accounting for capital assets is the expected useful life of the asset and the expected residual value. Most of our capital assets have a long life which can exceed 20 years with proper repair work and preventative maintenance. Useful life is measured in operated hours, excluding idle hours, and a depreciation rate is calculated for each type of unit. Depreciation expense is determined each day based on actual operated hours.

Another key estimate is the expected cash flows from the use of an asset and the expected disposal proceeds in applying Canadian Institute of Chartered Accountants Handbook Section 3063 “Impairment or Disposal of Long-Lived Assets” and the revised Section 3475 “Disposal of Long-Lived Assets and Discontinued Operations.” These standards require the recognition of an impairment loss for a long-lived asset to be held and used when changes in circumstances cause its carrying value to exceed the total undiscounted cash flows expected from its use. An impairment loss, if any, is determined as the excess of the carrying value of the asset over its fair value. Equally important is the expected fair value of assets that are available-for-sale.

Repair and maintenance costs

The parts, shop labor, and overhead costs, which are included in equipment costs on our income statement, represent the total cost of operating our equipment and maintaining it in an acceptable condition. It is our policy to expense these costs as they are incurred.

Hedge accounting

We entered into cross currency swap and interest rate swap agreements to hedge our exposure to foreign currency exchange fluctuations on our U.S. dollar denominated 8¾% senior notes. The initial assessment of the

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effectiveness of the hedge is critical, as well as the on-going review, as no foreign exchange gain or loss has been recorded on the statement of operations.

Results of Operations

	Year Ended March 31,									Nine Months Ended December 31,
	2002			2003			2004 (a)			2003 (a)			2004 (a)
	(dollars in thousands)
Statement of Operations Data:
Revenue	$	249,351		$	344,186		$	378,533		$	275,855		$	234,532
Project costs		127,996			219,979			240,043			174,412			167,644
Equipment costs		77,289			72,228			69,102			57,550			39,741
Depreciation		11,299			10,974			13,240			7,930			14,946
Gross profit		32,767			41,005			56,148			35,963			12,201
General and administrative		12,794			12,233			14,037			8,848			15,349
Gain on sale of capital assets		(218	)		(2,265	)		82			(49	)		509
Amortization of intangible assets (b)		—			—			12,928			1,968			2,971
Operating income		20,191			31,037			29,101			25,196			(6,628	)
Management fee (c)		14,400			8,000			41,070			41,070			—
Interest expense		3,786			4,173			13,474			5,556			24,811
Foreign exchange (gain) loss		(17	)		(234	)		72			5			516
Other income		(276	)		(11	)		(326	)		(418	)		(261	)
Income (loss) before income taxes		2,298			19,109			(25,189	)		(21,017	)		(31,694	)
Income taxes		689			6,620			(9,492	)		(8,057	)		(5,244	)
Net earnings (loss)	$	1,609		$	12,489		$	(15,697	)	$	(12,960	)	$	(26,450	)

(a) Amounts for the nine months ended December 31, 2003 and 2004 are unaudited. While amounts for the year ended March 31, 2004 are unaudited, they are constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004.

Nine Months Ended December 31, 2004 Compared to Nine Months Ended December 31, 2003

Revenue

Revenue for the nine-month period ended December 31, 2004 decreased by $41.3 million (15.0%) from the same period in the prior year primarily due to the substantial completion of the large site preparation and piling contracts in the prior year. Revenue also decreased due to the deferred capital spending program instituted by our major pipeline customer in the current period. These decreases were partially offset by revenue generated by increased piling activity and a number of new mining and site preparation contracts as discussed under “Segmented Results of Operations” below.

Project costs

Project costs for the nine-month period ended December 31, 2004 decreased by $6.8 million (3.9%) from the same period in the prior year primarily due to less activity in the current year.

As a percentage of revenue, project costs were higher in the nine-month period ended December 31, 2004 than in the comparative period primarily due to high costs incurred on one of our major projects.

Equipment costs

Equipment costs for the nine-month period ended December 31, 2004 decreased by $17.8 million (30.9%) from the same period in the prior year primarily due to lower lease and rental expense in the current period as compared to the prior period as a result of the buy-out of most of our leased and rented equipment concurrent with the acquisition on November 26, 2003.

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Depreciation

Depreciation expense for the nine-month period ended December 31, 2004 increased by $7.0 million (88.5%) from the corresponding period in the prior year. The increase was primarily due to increased depreciable asset values resulting from the revaluation of assets to their estimated fair market values in accordance with the application of purchase accounting in connection with the acquisition on November 26, 2003. The addition of new equipment resulting from the buy-out of the leased and rented equipment in November 2003 also contributed to the increased depreciation expense for the current period.

General and administrative expenses

General and administrative expenses increased by $6.5 million (73.5%) from the corresponding period in the prior year. This increase was primarily attributable to: higher staff levels; increased salaries, travel costs, insurance costs, and consulting costs; and increased costs related to corporate governance, including reporting responsibilities as an SEC filing company.

Amortization of intangible assets

The amortization of intangible assets in both the current and prior periods related to the customer contracts in progress, trade names, non-competition agreement, and employee arrangements that were acquired in the acquisition on November 26, 2003. Substantially all of the cost of the intangible assets has been amortized as of December 31, 2004 as the majority of the cost relates to customer contracts acquired in the acquisition in November 2003 that are being amortized at a rapid rate due to their short-term nature.

Management fees

Management fee expense was $nil for the nine-month period ended December 31, 2004 as compared to $41.1 million for the nine-month period ended December 31, 2003. These fees incurred in the prior period were charged by Norama Inc., the parent company of Norama, for management services provided to the predecessor company. The fees were paid in reference to taxable income. Subsequent to the acquisition, no similar management fees have been paid and the agreement with Norama Inc. was terminated.

Interest expense

Interest expense for the nine-month period ended December 31, 2004 increased significantly from the corresponding period in the prior year due to the additional debt (8¾% senior notes and senior secured credit facility) issued in connection with the acquisition on November 26, 2003. As well, the average interest rates on the new debt were higher than the interest rate on the debt of the predecessor company.

Foreign exchange loss (gain)

The foreign exchange loss for the nine month period ended December 31, 2004 related primarily to the exchange differences between the Canadian and U.S. dollar on our U.S. dollar denominated bank accounts and a payment in the second quarter of fiscal 2005 that related to the cancellation of a U.S. dollar forward contract to facilitate the purchase of equipment.

Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Revenue

Revenue for the fiscal year ended March 31, 2004 increased by $34.3 million to $378.5 million, as compared to $344.2 million for the fiscal year ended March 31, 2003. This increase was driven by a larger volume of pipeline installation services for EnCana. The increase was partially offset by reductions in revenues from the substantial completion of the Syncrude Aurora II project and piling services related to the Syncrude Upgrader Expansion, or UE-1, project.

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Project costs

Project costs for the fiscal year ended March 31, 2004 increased by $20.0 million to $240.0 million as compared to $220.0 million for the fiscal year ended March 31, 2003. The increase was primarily attributable to the higher volume of services provided in the current fiscal year. As a percentage of revenue, project costs decreased slightly from 63.9% at March 31, 2003 to 63.4% at March 31, 2004.

Equipment costs

Equipment costs for the fiscal year ended March 31, 2004 decreased by $3.1 million to $69.1 million as compared to $72.2 million for the fiscal year ended March 31, 2003. The decrease relates to lower lease and rental expense due to the buy out of most leases and rentals concurrent with the acquisition, offset by increased shop labor costs due in part to an increase in fleet size.

Depreciation

Depreciation expense increased by $2.2 million to $13.2 million for the fiscal year ended March 31, 2004, as compared to $11.0 million for the fiscal year ended March 31, 2003. This increase is primarily due to the revaluation of assets and liabilities to their estimated fair market values in accordance with the application of purchase accounting in connection with the acquisition. This increase is also due in part to higher heavy equipment hours over the previous year.

General and administrative expenses

General and administrative expenses increased by $1.8 million to $14.0 million for the fiscal year ended March 31, 2004, as compared to $12.2 million for the fiscal year ended March 31, 2003. This increase was primarily attributable to higher staff levels and salary increases, increased travel costs, increased insurance and consultants costs, and to new expenses related to the change in ownership (directors’ fees, advisory fees, and stock-based compensation expense).

Loss (gain) on sale of capital assets

Loss on sale of capital assets was $0.1 million for the fiscal year ended March 31, 2004 compared to a gain of $2.3 million for the fiscal year ended March 31, 2003. Losses on the sale of capital assets arise when the carrying value exceeds the proceeds of disposition. There were no significant gains or losses during the period.

Amortization of intangibles

Intangible assets were acquired in the acquisition and relate to customer contracts in progress, trade names, a non-competition agreement, and employee arrangements. The intangible assets are amortized over various terms as follows:

Intangible Asset	Basis of Amortization	Term
Customer contracts in progress	Net present value of the estimated period cash flows	Remaining lives of the related contracts
Trade names	Straight-line	Estimated useful life of 10 years
Non-competition agreement	Straight-line	Five-year term of the agreement
Employee arrangements	Straight-line	Expected employee retention period of three years

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Interest expense

Interest expense increased by $9.3 million to $13.5 million for the fiscal year ended March 31, 2004, as compared to $4.2 million for the fiscal year ended March 31, 2003. This increase was primarily due to larger debt balances with higher associated interest rates incurred in connection with the acquisition.

Management fees

Management fee expense increased by $33.1 million to $41.1 million for the fiscal year ended March 31, 2004, as compared to $8.0 million for the fiscal year ended March 31, 2003. Norama Inc., the parent company of Norama, charged a fee for management services provided to NACGI. The management fee was paid in reference to taxable income. Subsequent to the acquisition, no similar management fees have been paid and the agreement with Norama Inc. has been terminated.

Foreign exchange (gain) loss

The foreign exchange (gain) loss is relatively small and relates primarily to the exchange differences between the Canadian and U.S. dollar for a U.S. dollar denominated bank account. The U.S. dollar denominated 8¾% senior notes are effectively hedged with the cross currency swap and, accordingly, no gain or loss is reflected in respect of this debt.

Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Revenue

Revenue increased by $94.8 million to $344.2 million in the fiscal year ended March 31, 2003, as compared to $249.4 million in the fiscal year ended March 31, 2002. The increase was driven by a larger volume of mining and site preparation and piling services related to the Syncrude UE-1 project, commencement of work on the Athabasca oil sands project, increased pipeline installation services to EnCana and increased mining and site preparation services on the Albian FOM project. These increases were offset by reductions in revenue from two significant projects which were completed in fiscal 2002.

Project costs

Project costs increased by $92.0 million to $220.0 million in the fiscal year ended March 31, 2003, as compared to $128.0 million in the fiscal year ended March 31, 2002. This increase was primarily due to labor, material and subcontract costs associated with increased activity at the Syncrude UE-1 project which experienced a lower usage of heavy equipment in fiscal 2003 as compared to fiscal 2002. This combination of low equipment utilization and increased labor, material and subcontract costs resulted in an increase in job costs as a percentage of revenue for fiscal 2003 as compared to the prior year.

Equipment costs

Equipment costs decreased by $5.1 million to $72.2 million in the fiscal year ended March 31, 2003, as compared to $77.3 million in the fiscal year ended March 31, 2002. The decrease was primarily attributable to the completion of a greater number of scheduled major overhauls of the heavy equipment in fiscal 2002 as compared to fiscal 2003.

In addition, equipment lease and rental expense decreased in fiscal 2003, as compared to fiscal 2002. This decrease was largely attributable to the conversion of the leases on six pieces of heavy equipment from operating leases to capital leases in fiscal 2003.

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Depreciation

Depreciation expense decreased by $0.3 million to $11.0 million in the fiscal year ended March 31, 2003, as compared to $11.3 million in the fiscal year ended March 31, 2002. The decrease was primarily attributable to lower usage of large mining trucks on the Albian project as compared to the prior year. This was partially offset, however, by the increase in depreciable hours on one of the large shovels utilized on the Albian site.

General and administrative expense

General and administrative expense decreased slightly by $0.6 million to $12.2 million in the fiscal year ended March 31, 2003, as compared to $12.8 million in the fiscal year ended March 31, 2002. This decrease was primarily attributable to a reduction in professional fees, telecommunication expenses and other overhead expenses.

Gain on sale of capital assets

Gain on sale of capital assets was $2.3 million for the fiscal year ended March 31, 2003 compared to a gain of $0.2 million for the fiscal year ended March 31, 2002. Gains on the disposal of fixed assets arise when the proceeds of disposition exceed the carrying value of the assets. There were no significant gains or losses during the period.

Interest expense

Interest expense increased by $0.4 million to $4.2 million in the fiscal year ended March 31, 2003, as compared to $3.8 million in the fiscal year ended March 31, 2002. The term bank loans increased in fiscal 2003, resulting in higher interest expense. This increase was partially offset by a lower average prime interest rate of 4.40% for fiscal 2003, as compared to 5.23% for fiscal 2002.

Management fees

Management fee expense decreased by $6.4 million to $8.0 million in the fiscal year ended March 31, 2003, as compared to $14.4 million in the fiscal year ended March 31, 2002. Management fees represent fees for services rendered that are paid to the corporate shareholder of Norama Ltd., our predecessor company, which are determined with reference to taxable income. The decrease in this period was attributable to a decrease in taxable income. The decrease in this period was attributable to a decrease in taxable income.

Income taxes

The income tax provision is comprised of current corporate tax expense and future income tax expense. The current corporate tax expense has been reduced entirely due to management fees paid to the corporate shareholder of Norama Ltd. The increase in the future income tax provision in the fiscal year ended March 31, 2003 by $5.9 million to $6.6 million, as compared to $0.7 million in the fiscal year ended March 31, 2002, is primarily due to temporary differences arising from unbilled revenue.

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Segmented Results of Operations

We report our operations under three operating segments: Mining and Site Preparation, Piling, and Pipeline.

	Year Ended March 31,						Nine Months Ended December 31,
	2002		2003		2004 (a)		2003 (a)		2004 (a)
	(dollars in millions)
Revenue
Mining and site preparation	$	186.1	$	245.2	$	236.1	$	193.2	$	173.3
Piling		35.1		61.0		48.9		42.4		43.9
Pipeline		28.1		37.9		93.5		40.2		17.3
Total revenue		249.3		344.1		378.5		275.8		234.5
Profit by operating segment
Mining and site preparation		30.9		31.4		36.0		18.2		(0.1	)
Piling		8.1		12.5		10.8		9.3		9.1
Pipeline		6.1		6.3		17.9		7.1		2.4
Total operating profit		45.1		50.2		64.7		34.6		11.4

(a) Amounts for the nine months ended December 31, 2003 and 2004 are unaudited. While amounts for the year ended March 31, 2004 are unaudited, they are constructed from the historical audited consolidated financial statements of Norama Ltd. for the period from April 1, 2003 to November 25, 2003 and the historical audited consolidated financial statements of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004.

Nine Months Ended December 31, 2004 Compared to Nine Months Ended December 31, 2003

Mining and Site Preparation

Revenue for the nine-month period ended December 31, 2004 decreased by $20.0 million (10.3%) from the same period in the prior year primarily due to our inability to entirely replace the two large Syncrude UE-1 contracts that were substantially completed in the prior year. We were successful in partially replacing that work with a number of significant new contracts entered into by the Company in the current period, including the OPTI/Nexen Long Lake contract, the mining services work for Grande Cache Coal Corporation, Syncrude’s SWQR contract and the site preparation and underground utility contract for CNRL.

Operating segment profit for the nine-month period ended December 31, 2004 decreased by $18.5 million (100.7%) from the comparative period. The majority of the year-over-year decrease in operating segment profit was due to the substantial loss incurred on a single large steam assisted gravity drainage site project. A number of factors contributed to the loss on the project, including: unfavorable weather conditions hindering productivity; higher than expected costs due to labor shortages; schedule acceleration; and higher than expected costs resulting from an underestimation of the project’s complexity at the time the contract bid was prepared. At December 31, 2004, the project was approximately 85% complete with the majority of the remaining work scheduled to be completed in the spring of 2005. As required under generally accepted accounting principles, the total estimated loss on the project has been reflected in the results for the third quarter ended December 31, 2004.

Piling

Piling revenue for the nine-month period ended December 31, 2004 increased by $1.5 million (3.6%) from the comparative prior period primarily due to the revenue generated by a number of small contracts entered into by the Company which was more than the decline in revenue resulting from the completion of the large Syncrude UE-1 piling project in the prior year.

Profit for the Piling operating segment remained essentially unchanged for the nine-month period ended December 31, 2004 as compared to the prior period. The higher volume of contracts in the current period more than offset a decline in operating profit margin in the current period as compared to the prior period. This decline in operating margins was due to a higher proportion of lower margin driven pile work completed in the current period as compared to the prior period.

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Pipeline

Pipeline operating segment revenue for the nine-month period ended December 31, 2004 decreased by $20.9 million (56.9%) from the comparative prior period primarily due to a significant reduction in the regional development program by our major pipeline customer in the current period.

Profit for this operating segment for the nine-month period ended December 31, 2004 decreased by $4.7 million (66.6%) from the comparative prior period primarily as a result of the lower activity in the current period.

Fiscal Year Ended March 31, 2004 Compared to Fiscal Year Ended March 31, 2003

Mining and Site Preparation

Revenue for the fiscal year ended March 31, 2004 decreased by $9.1 million to $236.1 million, as compared to $245.2 million for the fiscal year ended March 31, 2003. Two projects in particular contributed to the decrease: Albian and Aurora II. Revenues from the Albian project decreased by $13.6 million to $36.6 million compared to $50.2 million for the previous year. This new oil sands mine in the Fort McMurray region had not yet reached its design capacity which resulted in less demand for our services. In addition, revenue from the Syncrude Aurora II project declined by $19.6 million as compared to the prior year due to the substantial completion of the project. The majority of our remaining projects experienced an increase in revenues over 2003. Revenues from our largest project, Syncrude UE-1, increased by $5.0 million over 2003 due to expanded scope on this project. Revenues from the overburden job at Syncrude also increased by $5.6 million over the previous year. The new Opti-Nexen project south of Fort McMurray, Alberta and the new Kemess Mine project in British Columbia generated $4.5 million and $8.5 million in revenues, respectively.

Segment operating profits increased by $4.5 million in the fiscal year ended March 31, 2004 to $36.0 million as compared to $31.4 million for the fiscal year ended March 31, 2003. The increase is due to increased profit margins due to a larger proportion of higher margin unit-price work in the current year.

Piling

Revenue for the fiscal year ended March 31, 2004 decreased by $12.1 million to $48.9 million as compared to $61.0 million for the fiscal year ended March 31, 2003. This decrease is primarily due to lower revenue from the Syncrude UE-1 piling contract as work on this project was nearing completion, offset partially by increased activity in the Calgary and Vancouver markets.

Piling segment operating profits decreased by $1.7 million in the fiscal year ended March 31, 2004 to $10.8 million as compared to $12.5 million for the fiscal year ended March 31, 2003 primarily due to the decrease in revenue as described above.

Pipeline

Revenue from the pipeline segment increased significantly to a record level of $93.5 million for the fiscal year ended March 31, 2004, up from $37.9 million for the prior year. Installations of larger diameter pipe, particularly 12”, and a greater number of well site tie-ins contributed to this increase. As well, a larger number of ancillary services, such as pipeline weight installations, resulted in the higher revenue. Further, management believes the increased demand for natural gas and the provincial government royalty incentive program have combined to create a favorable environment for increased activity in this segment.

Pipeline segment operating profits increased by $11.6 million in the fiscal year ended March 31, 2004 to $17.9 million as compared to $6.3 million for the fiscal year ended March 31, 2003. The increase in operating profit is primarily attributable to the increase in activity volumes and a larger proportion of higher margin work compared to the previous year.

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Fiscal Year Ended March 31, 2003 Compared to Fiscal Year Ended March 31, 2002

Mining and Site Preparation

Revenue increased by $59.1 million to $245.2 million, as compared to $186.1 million for the fiscal year ended March 31, 2002. The increase was primarily due to the higher volume of services provided on the Syncrude UE-1 project as our revenues increased from $32.1 million in fiscal 2002 to $107.6 million in the fiscal year ended March 31, 2003. In addition, revenues for the Syncrude Aurora II project increased $20.1 million as compared to the prior period. These increases were partially offset by a $25.5 million decrease on the Syncrude overburden project as this project was nearing completion and by lower demand for our services on the Syncrude FOM project during this period.

Mining and site preparation segment operating profits increased slightly to $31.4 million as compared to $30.9 million for fiscal 2002. This increase was due primarily to a higher volume of work offset by decreased profit margins due to a larger proportion of lower margin time-and-materials work in fiscal 2003.

Piling

Revenue increased by $25.9 million to $61.0 million as compared to $35.1 million for the fiscal year ended March 31, 2002. The increase is primarily due to significantly higher piling revenues generated on the Syncrude UE-1 project during fiscal 2003 as compared to fiscal 2002.

Piling segment operating profits increased to $12.5 million as compared to $8.1 million for fiscal 2002 primarily due to the increase in the volume of work offset slightly by a higher proportion of lower margin time-and-materials contracts in fiscal 2003 as compared to fiscal 2002.

Pipeline

Revenue from the pipeline segment increased to $37.9 million for the fiscal year ended March 31, 2003, up from $28.1 million for the fiscal year ended March 31, 2002. This increase is related to the higher volume of work for EnCana in the Sierra region of north eastern British Columbia during fiscal 2003.

Pipeline segment operating profits increased slightly to $6.3 million for fiscal 2003, as compared to $6.1 million for fiscal 2002 due to the higher volume of activity offset by the realization of lower margins on certain time-and-materials contracts.

Consolidated Financial Position

At December 31, 2004, we had a net working capital deficiency of $37.5 million compared to a positive net working capital position of $43.5 million at March 31, 2004. The decrease was primarily due to the reclassification of scheduled repayments due beyond one year related to our term credit facility in the first quarter of this fiscal year, resulting in the balance being classified as a current liability, as discussed in note 1 to our unaudited interim consolidated financial statements included elsewhere in this prospectus. Also contributing to the decrease were a reduction in cash and cash equivalents at December 31, 2004 as compared to March 31, 2004 and a revolving credit facility balance of $10 million owing at December 31, 2004 where none existed at March 31, 2004. Accounts receivable increased from March 31, 2004 due to longer payment terms under present contracts as compared to the payment terms under the contracts active at the end of the prior fiscal year. Unbilled revenue decreased from March 31, 2004 as a result of improving cycle time in our billing preparation process. Accounts payable and accrued liabilities increased slightly at December 31, 2004 from the balances at the end of the prior fiscal year due to a delay in paying certain vendors as a result of the discovery of unrecorded invoices late in the quarter as described above.

Capital assets increased by $8.2 million at December 31, 2004 from March 31, 2004 due to the purchase of new equipment required to perform the various contracts awarded over the past nine months, including the large site preparation and underground utility installation project in progress for CNRL. A portion of the increase also resulted

45

from equipment purchases to replace retired equipment. The increase in capital assets at December 31, 2004 was partially offset by depreciation expense incurred over the ninemonth period.

The term credit facility balance decreased by $4.5 million at December 31, 2004 from the balance at the end of the prior fiscal year due to the scheduled quarterly term debt repayments.

Capital lease obligations, including the current portion, increased by $2.8 million at December 31, 2004 from the balance at March 31, 2004 due to the addition of new leased vehicles to support new projects.

Impairment of Goodwill

In accordance with Canadian Institute of Chartered Accountants’ Handbook Section 3062, “Goodwill and Other Intangible Assets”, we review our goodwill for impairment annually or whenever events or changes in circumstances suggest that the carrying amount may not be recoverable. We are required to test our goodwill for impairment at the reporting unit level and we have determined that we have three reporting units. The test for goodwill impairment is a two-step process:

• Step 1 – We compare the carrying amount of each reporting unit to its fair value. If the carrying amount of a reporting unit exceeds its fair value, we have to perform the second step of the process. If not, no further work is required.

• Step 2 – We compare the implied fair value of each reporting unit’s goodwill to its carrying amount. If the carrying amount of a reporting unit’s goodwill exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess.

We completed this test during the third quarter of fiscal 2005 and were not required to record an impairment loss on goodwill.

Liquidity and Capital Resources

Operating activities

Operating activities for the nine-month period ended December 31, 2004 resulted in a net usage of cash totalling $17.6 million. This was mainly due to the substantial net loss incurred on a single large steam assisted gravity drainage site project and billing delays encountered by us. During the nine-month period ended December 31, 2003, operating activities contributed $2.8 million in cash mainly due to the collection of accounts receivable.

Cash provided from operating activities for the fiscal year ended March 31, 2004 totalled $18.0 million, with collection of accounts receivable primarily contributing to the results. Cash provided from operating activities for the predecessor company for the years ended March 31, 2003 and March 31, 2002 was $16.3 million and $4.2 million respectively. Historically, we have used cash from operations, together with other available sources of liquidity, to fund our working capital needs and capital expenditures. Going forward, we expect to fund our operations and sustaining capital expenditures and to satisfy our debt service obligations through operating cash flow and to finance our expansion related to capital expenditures from borrowings under our revolving credit facility and other external financing. Sustaining capital expenditures are those that are required to maintain our fleet of equipment at its optimum average age. Expansion capital expenditures are directly related to new projects, and the commitment to make expansion capital expenditures typically occurs only when we have signed a contract for a new project.

Investing activities

During the nine-month period ended December 31, 2004, we invested $20.5 million in capital expenditures compared to $5.9 million in the comparative prior period. We financed new vehicles by way of capital leases totalling $3.7 million during the nine-month period ended December 31, 2004 compared to $3.0 million during the same period in the prior year. We expect our future sustaining capital expenditures to range from $9.0 million to

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$18.0 million per year. Sustaining capital expenditures are those that are required to maintain our existing fleet of equipment at its optimum average age. Growth capital expenditures relate to equipment additions required to perform increased sizes or numbers of projects.

Cash used in investing activities during the fiscal year ended March 31, 2004 related almost entirely to the acquisition. The cash used to acquire the shares of NACGI and the assets of NAEL totalled $367.8 million, which is net of the $4.0 million in NACGI cash balances acquired and $15.6 million in surplus cash from the acquisition financing.

During the period from November 26, 2003 to March 31, 2004, we invested $2.5 million in capital expenditures. In addition, new vehicle capital leases increased by $1.2 million and proceeds from the disposal of capital assets amounted to $5.8 million. We expect our future sustaining capital expenditures to range from $9 million to $18 million per year. During the period from April 1, 2003 to November 25, 2003, the net cash used in investing activities by the predecessor company was $4.6 million. New vehicle capital leases increased by $2.1 million and proceeds on disposal of capital assets were $0.6 million. For the fiscal year ended March 31, 2004 total investment in capital expenditures was $7.7 million and total proceeds on disposal of capital assets was $6.4 million.

For the fiscal year ended March 31, 2003, the predecessor company invested $22.9 million in capital expenditures. In addition, new capital leases increased by $9.4 million and proceeds from the disposal of capital assets was $4.2 million.

For the fiscal year ended March 31, 2002, the predecessor company invested $8.6 million in capital expenditures. Proceeds from the disposal of capital assets were $2.2 million.

Financing activities

Financing activities during the nine-month period ended December 31, 2004 primarily related to borrowings under our revolving credit facility, term credit facility scheduled repayments, and repayment of capital lease obligations.

Financing activities for the nine-month period ended December 31, 2003 included the issuance of our 8¾% senior notes, share capital, and the related financing costs incurred in connection with the acquisition on November 26, 2003 and borrowings under the term credit facility. Significant financing activities for the nine-month period ended December 31, 2003 also included scheduled repayments under the predecessor company’s credit facility, advances from the predecessor company’s parent company, and repayment of capital lease obligations.

Financing activities during the fiscal year ended March 31, 2004 related almost entirely to the acquisition. The cash required to complete the acquisition was financed by $92.5 million from the issuance of common shares, $263.0 million in proceeds from the 8¾% senior notes and $50.0 million from the term loan portion of the senior credit facility net, in the latter two instances, of $18.1 million in issuance costs and fees. Apart from the cash provided to finance the acquisition, only a minimal amount of other financing activity occurred during the fiscal year ended March 31, 2004. This financing activity related to payments made on capital leases and the term credit facility.

Financing activities of the predecessor company for the fiscal year ended March 31, 2003 included $13.5 million proceeds from a term credit facility, and payments made on the term credit facility and capital leases.

Financing activities of the predecessor company for the fiscal year ended March 31, 2002 included $8.0 million proceeds from a term credit facility, and payments made on the term credit facility and capital leases, as well as repayment of advances from Norama Inc.

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Liquidity Requirements

Historically, we have used cash from our operations, together with other available sources of liquidity (primarily our lines of credit and term loans), to fund our working capital needs and capital expenditures.

We maintain a significant equipment and vehicle fleet comprised of units with remaining useful lives that vary. Once units reach the end of their useful lives it becomes cost prohibitive to continue to maintain them and, therefore, they must be replaced. As a result, we are continually acquiring new equipment to replace retired units and also to expand the fleet to meet growth as larger new contracts are awarded to us. It is important to adequately maintain our large revenue producing fleet in order to avoid equipment downtime which can impact our revenue stream and inhibit our ability to satisfactorily perform contracts. In order to conserve cash, we have financed our recent requirements for large pieces of heavy construction equipment through operating leases.

We continue to lease a portion of our motor vehicle fleet and have assumed several heavy equipment operating leases from the predecessor company. We have recently had to increase our heavy construction equipment fleet in order to fulfill our obligations under recently awarded contracts. In doing so, we have financed the large pieces of equipment through operating leases in order to allow enough cash to be available to fund working capital requirements and fund our minimum requirements to replace smaller equipment as it is retired.

Sources of Liquidity

Our new revolving credit facility provides for revolving commitments of up to $40.0 million under which revolving loans may be made and under which letters of credit may be issued up to a sublimit of $30.0 million. As of June 1, 2005, $20.0 million in letters of credit were issued and outstanding and we had approximately $16.6 million of available borrowings. The facility will mature 91 days before the maturity date of the notes. The facility bears interest at variable rates based on the Canadian prime rate plus 2.0% per annum or the Canadian bankers’ acceptance rate plus 3.0% per annum. Interest is payable quarterly in arrears and computed on the basis of a 365-day year. Letters of credit are subject to a 3.0% per annum fee and to a fronting fee equal to the greater of $500 or 0.25% per annum of the daily drawable amount paid quarterly in arrears. Commitment fees equal to 0.50% per annum multiplied by the daily average unused portion of the credit facility are computed on the basis of a 360-day year and payable quarterly in arrears.

The notes will mature on June 1, 2010. There are no scheduled principal payments required on the notes until maturity. Interest is payable semi-annually on June 1 and December 1 of each year. We currently do not intend to hedge the foreign currency risk of either the principal or interest payments on the notes.

Our new revolving credit facility and the indenture relating to the notes impose certain restrictions on us, including restrictions on our ability to incur indebtedness, pay dividends, make investments, grant liens, sell our assets and engage in certain other activities. In addition, the new revolving credit facility requires us to maintain certain financial ratios. See “Description of Certain Indebtedness—New Revolving Credit Facility.” Our indebtedness under the new revolving credit facility and the notes is secured by substantially all of our assets, including our accounts receivable and capital assets.

There are no scheduled principal payments required on our US$200 million of 8¾% senior notes due 2011 until maturity. The foreign currency risk relating to both the principal and interest payments has been effectively hedged with cross currency and interest rate swaps which went into effect concurrent with the issuance. The 8.75% per annum rate of interest on the senior notes has been swapped to an effective rate of 9.765% for the entire period until maturity. In connection with the new revolving credit facility, we were required to amend these swap agreements to increase the effective rate of interest on the senior notes from 9.765% to 9.889%, and to issue senior preferred stock. See “Description of Certain Indebtedness—New Revolving Credit Facility.” As a result, effective December 1, 2005, semi-annual interest expense on the senior notes will increase by $0.2 million to $13.0 million payable in June and December of each year until the 8¾% senior notes mature on December 1, 2011.

On January 18, 2005, we announced that we anticipated having to restate our financial statements for the first and second quarters of fiscal 2005, primarily due to certain inaccurate expense accruals. On January 19, 2005, both

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Moody’s and Standard & Poor’s lowered our credit ratings. Moody’s lowered its rating of our 8¾% senior notes to B3 from B2 and its rating of our previous senior secured credit facility to B1 from Ba3. Standard & Poor’s lowered our long-term corporate credit rating to B from B+. In addition, Standard & Poor’s also lowered our senior secured bank facility rating to B+ from BB- and lowered our senior unsecured rating to B- from B. Standard & Poor’s had earlier downgraded our credit ratings on November 5, 2004 when it lowered our long-term corporate credit rating to B+ from BB- and also lowered our senior secured bank facility and senior unsecured ratings to BB- from BB and B from B+, respectively. On April 27, 2005, Moody’s further lowered its rating of our 8¾% senior notes to Caa1 from B3. On May 19, 2005, Standard & Poor’s further lowered our long-term corporate credit rating to B- from B, our senior secured bank facility rating to B from B+ and our senior unsecured rating to CCC+ from B-. The lower credit ratings will have no effect on the interest rates associated with the notes or our 8¾% senior notes.

Stock-Based Compensation

Certain of our directors, officers, employees and service providers have been granted options to purchase common shares of NACG Holdings Inc., our parent company, under a stock-based compensation plan. The plan and outstanding balances are disclosed in note 5 to our interim consolidated financial statements for the period ended December 31, 2004.

Contractual Obligations and Other Commitments

Our principal contractual obligations relate to the notes, our 8¾% senior notes due 2011, our mandatorily redeemable preferred stock and capital and operating leases. Other than our operating leases, we do not have any off-balance sheet arrangements. The following table summarizes our future contractual obligations, excluding interest payments unless otherwise noted, as of March 31, 2004 after giving effect to our offering of the notes and the application of the proceeds therefrom.

	Payments Due by Period
	Total		2005		2006		2007		2008		2009 and after
	(dollars in millions)
Contractual Obligations:
Long-term debt	$	347.0	$	—	$	—	$	—	$	—	$	347.0
Mandatorily redeemable preferred stock		8.5		—		—		—		—		8.5
Capital leases (including interest)		3.3		0.9		0.8		0.8		0.8		—
Operating leases (a)		5.0		3.0		0.8		0.7		0.7		—
Total contractual cash obligations	$	363.8	$	3.9	$	1.6	$	1.5	$	1.5	$	355.5

(a) Includes property leases and leases on four pieces of heavy equipment.

We are also party to swap agreements, the mark-to-market liability of which can differ from the amounts shown on our balance sheet.

U.S. Generally Accepted Accounting Principles

Our financial statements have been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. The nature and effect of these differences are set out in note 11 to the interim consolidated financial statements and note 19 to the audited consolidated financial statements for the fiscal year ended March 31, 2004 included in this prospectus.

Recent U.S. accounting pronouncements

SFAS 123R, “Share-Based Payment”, is in effect for our fiscal 2006. This revised standard requires companies to recognize in the income statement, the grant-date fair value of stock options and other equity-based compensation issued to employees. The fair value of liability-classified awards is remeasured subsequently at each reporting date through the settlement date, while the fair value of equity-classified awards is not subsequently remeasured. The alternative to use the intrinsic value method of Accounting Principles Board (“APB”) Opinion 25 is eliminated with this revised standard. We are currently evaluating the impact of this revised standard.

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SFAS 153, “Exchanges of Non-monetary Assets – an Amendment of APB Opinion 29”, was issued in December 2004. APB Opinion 29 is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of assets exchanged. SFAS 153 amends APB Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. The standard is effective for non-monetary asset exchanges occurring in fiscal 2006 and will be applied prospectively. We are currently evaluating the impact of this revised standard.

In November 2004, the FASB issued SFAS 151, “Inventory Costs.” This standard requires the allocation of fixed production overhead costs be based on the normal capacity of the production facilities and unallocated overhead costs recognized as an expense in the period incurred. In addition, other items such as abnormal freight, handling costs and wasted materials require treatment as current period charges rather than a portion of the inventory cost. This standard is effective for fiscal 2006. The adoption of this standard is not expected to have a material impact on our financial statements.

Recent Canadian GAAP Accounting Rules

In June 2003, the CICA issued Accounting Guideline 15 “Consolidation of Variable Interest Entities” (“VIEs”) (“AcG-15”). VIEs are entities that have insufficient equity at risk to finance their operations without additional subordinated financial support and/or entities whose equity investors lack one or more of the specified essential characteristics of a controlling financial interest. AcG-15 provides specific guidance for determining when an entity is a VIE and who, if anyone, should consolidate the VIE. The standard is effective on a prospective basis for the fourth quarter of our 2005 fiscal year. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

Emerging Issues Committee Abstract 150, “Determining whether an Arrangement Contains a Lease” (“EIC 150”) addresses a situation where an entity enters into an arrangement, comprising a transaction that does not take the legal form of a lease but conveys a right to use a tangible asset in return for a payment or series of payments. EIC 150 is effective for arrangements entered into or modified after January 1, 2005. We are currently assessing its impact.

In January 2005, the CICA issued Handbook Section 3855, “Financial Instruments – Recognition and Measurement”, Handbook Section 1530, “Comprehensive Income”, and Handbook Section 3865, “Hedges”. The new standards will be effective for interim and annual financial statements commencing in 2007. Earlier adoption is permitted. The new standards will require presentation of a separate statement of comprehensive income. Foreign exchange gains and losses on the translation of the financial statements of self-sustaining subsidiaries previously recorded in a separate section of shareholder’s equity will be presented in comprehensive income. Derivative financial instruments will be recorded in the balance sheet at fair value and the changes in fair value of derivatives designated as cash flow hedges will be reported in comprehensive income. The existing hedging principles of AcG-13 will be substantially unchanged. We are currently assessing the impact of the new standards.

Quantitative and Qualitative Disclosures Regarding Market Risk

Foreign currency risk

We are subject to currency exchange risk as the notes and our 8¾% senior notes are denominated in U.S. dollars and all of our revenues and most of our expenses are denominated in Canadian dollars. As noted above, we have entered into cross currency swap and interest rate swap agreements to effectively hedge this risk associated with the 8¾% senior notes. The hedging instrument consists of three components: a U.S. dollar interest rate swap: a U.S. dollar-Canadian dollar cross currency basis swap; and a Canadian dollar interest rate swap that results in us mitigating our exposure to the variability of cash flows caused by currency fluctuations relating to the US$200 million senior notes. The transaction can be cancelled at the counterparty’s option at any time after December 1, 2007 if the counterparty pays a cancellation premium. The premium is equal to 4.375% of the US$200 million if exercised between December 1, 2007 and December 1, 2008; 2.1875% if exercised between December 1, 2008 and December 1, 2009; and 0.000% if cancelled after December 1, 2009.

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We currently do not intend to enter into instruments to hedge the foreign currency exchange risk associated with the notes.

Interest rate risk

We are subject to interest rate risk in connection with our new revolving credit facility. The facility bears interest at variable rates based on the Canadian prime rate plus 2.0% per annum, or the Canadian bankers’ acceptance rate plus 3.0% per annum. Assuming the new revolving credit facility is fully drawn at $20.0 million, excluding the $20.0 million of outstanding letters of credit, each 1.0% increase or decrease in the applicable interest rate would change the interest cost by $0.2 million per year. In the future, we may enter into interest rate swaps involving the exchange of floating for fixed rate interest payments to reduce interest rate volatility.

Inflation

The rate of inflation has not had a material impact on our operations as many of our contracts contain a provision for annual escalation. If inflation remains at its recent levels, it is not expected it to have a material impact on our operations in the foreseeable future.

Seasonality

We experience some seasonality in our operations, particularly in the pipeline segment. Conditions are more favorable in the colder temperatures of the winter months to move equipment on the soft ground conditions, and accordingly, we earn most of our revenue in this segment during the period from November to March. In the mining and site preparation segment, the spring thaw, which typically occurs in April and May, can result in lower revenues earned in that period.

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BUSINESS

Our Company

We are one of the largest providers of mining and site preparation, piling and pipeline installation services in western Canada. We provide our services primarily to the major integrated and independent oil and gas, petrochemical and other natural resources companies operating in this geographic region. In serving our customers, we operate 450 pieces of heavy equipment and over 600 support vehicles, and we have developed expertise operating in the difficult working conditions created by the climate and terrain of the Alberta oil sands and other areas of western Canada. Our work on private sector oil sands and pipeline installation projects results from focusing our asset deployment on the more technically difficult and profitable revenue opportunities rather than traditional public sector construction activity. Our services consist of:

• surface mining for oil sands and other natural resources; site preparation, which includes clearing, stripping, excavating and grading for mining operations and other general construction projects, as well as underground utility installation for plant, refinery and commercial building construction;

• piling installation for plant, refinery and commercial building construction; and

• pipeline installation for oil and gas transmission.

For the nine months ended December 31, 2004, we had revenue of $234.5 million and EBITDA of $11.0 million.

For the nine months ended December 31, 2004, we believe we generated over half of our revenue from energy producers in the Alberta oil sands by providing reliable mining and site preparation and piling services. The Alberta oil sands are spread across 140,800 square kilometers, or 54,363 square miles, of remote landscape in the northeastern portion of the province of Alberta. Most of the oil sands are buried under sand, gravel, silt and clay, collectively called overburden, and in some places up to 16 meters of muskeg. According to AEUB, there are approximately 174 billion barrels of economically recoverable oil in the sands, which makes the Alberta oil sands proved reserves second only to those of Saudi Arabia, the largest oil producing country in the world. AED estimates that from 1996 to 2003, approximately $28 billion was invested in the Alberta oil sands. From 2004 to 2013, AED projects that approximately $75 billion will be spent to sustain and expand existing oil sands projects and develop new projects.

We have long-term, stable relationships with our customers, some of whom we have been serving for over 30 years. We believe we are the principal provider of mining and site preparation and piling services in the Alberta oil sands to many major operators in the area, including Syncrude Canada Ltd., our largest customer and the largest producer of bitumen in the oil sands. In addition, our joint venture Noramac recently entered into a 10-year overburden removal contract with the newest oil sands operator, CNRL. We also provide pipeline installation services in western Canada to EnCana Corporation. Approximately 90% of our revenues from fiscal 2001 to fiscal 2004 was attributable to private sector oil and gas projects in Alberta and British Columbia.

Our Competitive Strengths

Leading market position

With over 50 years of operations in western Canada, we are one of the largest independent equipment operators in the Fort McMurray area based on equipment in operation. Our fleet size allows us to offer flexibility in scheduling contract services on a timely basis and to take on long-term, large-scale projects with the major operators in the oil sands. In addition, we have developed expertise operating in the difficult working conditions created by the climate and terrain of the Alberta oil sands and other areas of western Canada. We believe this combination provides us with a significant competitive advantage in our target markets.

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According to CAPP, in 2003, operators in the Alberta oil sands spent approximately $5 billion to develop projects. We believe that between 10% and 20% of these projects relate to services that we perform and on which we may bid. In the same period, we estimate that the operating spending by the oil sands mining operators was approximately $500 million, of which we believe 20% relates to recurring services that we perform.

Long-term customer relationships

We have worked successfully for many years with a number of the major oil sands producers and industry leaders in our core markets. We believe we have established strong relationships with our customers based on our commitment to quality, service and safety. Historically, our largest customers by revenue have been Syncrude Canada, Ltd., Suncor Energy Inc., Albian Sands Energy Inc. and EnCana Corporation. Through our joint venture Noramac, we have been engaged to provide substantial services under several contracts with CNRL, including a 10-year overburden removal contract. These customers demand that their service providers meet very stringent criteria, including a strong safety and performance record, a well-maintained, highly capable fleet with specific equipment dedicated to them and a staff of well-trained, experienced operators and mechanics. We believe that our qualifications meet or exceed each of these criteria, which has resulted in long-standing relationships with our customers.

Experienced operations team

Our 37 project managers have over 300 years of collective service with us and manage the day-to-day execution of a wide range of projects. Our primary customers are developers of multibillion dollar projects in the Alberta oil sands. Construction of these projects takes several years and comes with significant construction risk. Our oil sands customers want service providers with experienced personnel whom they can trust to complete the work on-time, on-budget and without incident. We have provided outsourced mining and site preparation services in the oil sands for over 40 years and have participated in every Canadian oil sands mining project developed. We believe our experienced operations team, and long history serving the oil sands industry, provide us with a significant competitive advantage.

Well-positioned equipment fleet and maintenance facilities

Our heavy equipment fleet consists of over 1,050 pieces of equipment and support vehicles located mainly in the Alberta oil sands. This large and diverse fleet located on site in the remote area of the oil sands allows us to quickly serve the constantly shifting needs of our customers’ projects. In addition, our ability to quickly move equipment from one project site to another in the oil sands region not only allows us to provide excellent service to our customers, but also increases the utilization of our fleet.

In addition to our major equipment repair facility located at our corporate headquarters near Edmonton, we have three existing equipment repair facilities located on our customers’ project sites in the oil sands and one on a customer’s coal mining operation in western Canada. We are currently building a large complex to support our equipment required for the CNRL overburden removal contract. These facilities allow us to maintain our equipment according to a stringent maintenance program and make repairs without unnecessary equipment downtime.

Our Strategy

We intend to increase cash flow by focusing on internal growth opportunities. We believe our market leadership position, strong customer base and well-positioned equipment fleet will allow us to take advantage of the significant growth opportunities we see for the expansion of the oil sands and other energy and natural resources development in Canada. We may also make selective acquisitions that we believe will lead to further growth opportunities. We intend to capitalize on these opportunities by pursuing the following strategies:

Increase the level of our recurring revenue base

Over the past several years we have increased our revenues from mining services, including overburden removal, reclamation and ore mining. We believe our oil sands customers’ needs for these types of services will

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increase as they expand their operations. We expect to increase the stability of our revenues and cash flows by increasing the quantity of recurring mining services both to our existing customers as well as other developers of natural resources outside of the oil sands.

Leverage long-term relationships with existing energy customers

Several of our oil sands customers have announced intentions to increase their production capacity by expanding the infrastructure at their sites through various planned expansion projects. We expect to leverage our relationships with these and other oil sands customers to win a substantial share of the site preparation and piling services outsourced by these customers in connection with their expansions. Through our joint venture Noramac, we are providing substantial services under several contracts with CNRL, including a 10-year overburden removal contract. In addition, we believe we are well-positioned to expand the services we provide to new and existing pipeline customers and participate in new pipeline projects designed to service growing natural gas demand from the oil sands producers and U.S. customers.

Capitalize on new opportunities in the Alberta oil sands

We will utilize our market leadership position and successful track record with the major operators in the oil sands to position ourselves as the service provider of choice for customers establishing new mining operations in the oil sands. In addition to the new CNRL project, a new project in the oil sands has been announced by Petro-Canada/UTS Energy Corporation. This project has planned capital expenditures of $5 billion, of which we can expect to bid for approximately 10% to 15%.

Maintain our market share in existing piling markets and expand our geographic scope by making selective regional piling acquisitions

Over the last five years, we have generated a significant amount of revenue by providing piling services to commercial construction customers in the Edmonton, Calgary, Regina and Vancouver areas. As these areas continue to grow as a result of population growth, additional piling services will be required and we expect to leverage our relationships with customers in these areas to provide a significant share of these services. We have also identified other areas of western and central Canada that exhibit attractive characteristics indicating future commercial construction growth. We plan to enter these markets by selectively acquiring local piling companies and then utilizing our experience and equipment fleet to successfully grow our piling and other services in these markets.

Employ our expertise outside of the Alberta oil sands

Canada has significant reserves of various natural resources including diamonds, coal and gold. We intend to utilize the expertise we have developed providing mining and site preparation and piling services to provide similar services to natural resources mining companies operating outside of the oil sands.

Continue to improve our operating efficiency and control our costs

We will pursue contracts that allow us to maximize the utilization of our fleet of large equipment. This will enable us to increase operating efficiency and improve our margins. Additionally, we intend to optimize our equipment through our maintenance and repair program in order to minimize equipment downtime and increase utilization.

Our Operations

We provide our services in three interrelated yet distinct business units: mining and site preparation, piling and pipeline. Over the past 50 years, we have developed an expertise operating in the difficult working conditions created by the climate and terrain of western Canada. We provide these services primarily for our oil and gas and other natural resource customers.

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The chart below shows the revenues generated by each business unit for the fiscal years ended March 31, 2000 through March 31, 2004:

	Year Ended March 31,
	2000				2001				2002				2003				2004
	(dollars in thousands)
Mining and site preparation	$	100,420	55.4	%	$	153,152	61.9	%	$	186,141	74.6	%	$	245,235	71.3	%	$	236,092	62.4	%
Piling		52,301	28.9			36,709	14.9			35,132	14.1			61,006	17.7			48,933	12.9
Pipeline		28,436	15.7			57,406	23.2			28,078	11.3			37,945	11.0			93,508	24.7
Total	$	181,157	100.0	%	$	247,267	100.0	%	$	249,351	100.0	%	$	344,186	100.0	%	$	378,533	100.0	%

Mining and site preparation

Our mining and site preparation business unit encompasses a wide variety of services. Our contract mining business represents an outsourcing of the equipment and labor component of the oil and gas and other natural resources mining business. Our site preparation services include clearing, stripping, excavating and grading for mining operations and other general construction projects, as well as underground utility installation for plant, refinery and commercial building construction. This business utilizes the vast majority of our equipment fleet and employs over 500 people. The majority of the employees and equipment associated with this business unit are located in the Alberta oil sands area.

For the fiscal year ended March 31, 2004, revenues from this segment accounted for approximately 62% of our total revenues.

Many Alberta oil sands and natural resource mining companies utilize contract services for mine site operations in order to focus their resources on exploration and property development. Our mining services consist of overburden removal; the hauling of sand and gravel; mining of the ore body and delivery of the ore to the crushing facility; supply of labor and equipment to support the owners’ mining operations; construction of infrastructure associated with mining operations; and reclamation activities, which include contouring of waste dumps and placement of secondary materials and muskeg. The major producers outsource mine site operations to contractors such as our company to allow them to benefit from a variety of cost efficiencies that we can provide. We believe mining contractors typically have wage rates lower than those of the mining company and more flexible operating arrangements with personnel allowing for improved uptime and performance. We believe we are one of the principal outsourced mining service providers in the Alberta oil sands because of our ability to operate efficiently and profitably in some of the most challenging mine sites in western Canada.

Oil sands operators use our site preparation services to prepare their leased properties for the construction of the mining infrastructure, including extraction plants and upgrading facilities, and for the eventual mining of the oil sands ore located on their properties. Outside of the Alberta oil sands, our site preparation services are used to assist in the construction of roads, natural resource mines, plants, refineries, commercial buildings, dams and irrigation systems. In order to successfully provide these types of services in the Alberta oil sands, our highly skilled operators are required to use heavy equipment to transform barren terrain and difficult soil or rock conditions into a stable environment for site development. Our extensive fleet of equipment is used for clearing the earth of vegetation and removing topsoil that is not usable as a stable subgrade and site grading, which includes grading, leveling and compacting the site to provide a solid foundation for transportation or building. We also provide utility pipe installation for the private and public sectors in western Canada. We are experienced in working with piping materials such as HDPE, concrete, PVC and steel. This work involves similar methods as those used for field, transmission and distribution pipelines in the oil and gas industry, but is generally more intricate and time consuming as the work is typically performed in existing plants with numerous tie-ins to live systems.

Piling

In providing piling services, we currently operate a variety of crawler-mounted drill rigs, a fleet of 25 to 100-ton capacity piling cranes and pile driving hammers of all types from our Edmonton, Calgary, Regina, Vancouver and Fort McMurray locations. Piles and caissons are deep foundation systems that extend up to 30 meters below a structure. Piles are long narrow shafts that distribute a load from a supported structure (such as a building or bridge)

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throughout the underlying soil mass and are necessary whenever the available footing area beneath a structure is insufficient to support the load above it. The foundation chosen for any particular structure depends on the strength of the rock or soil, magnitude of structural loads, and depth of groundwater level.

Our capabilities include the installation of all types of driven and drilled piles, caissons and earth retention and stabilization systems for commercial buildings; private industrial projects, such as plants and refineries; and infrastructure projects, such as bridges. Our piling business employs approximately 100 people. Oil and gas companies developing the oil sands and related infrastructure represent two-thirds of our piling clients. The remaining one-third of our piling clients are primarily commercial construction builders operating in the Edmonton, Calgary, Regina and Vancouver areas.

For the fiscal year ended March 31, 2004, revenues from this segment accounted for approximately 13% of our total revenues.

Pipeline

We install field, transmission and distribution pipe made of steel, plastic and fiberglass materials in all sizes up to and including 36 inches in diameter. We employ our fleet of construction equipment and skilled technical operators to build and test the pipelines for the delivery of oil and natural gas from the producing field to the consumer. Our pipeline teams have expertise in hand welding selected grade pipe and in operating in the harsh conditions of remote regions in western and northern Canada.

For the fiscal years ended March 31, 2004, 2003 and 2002, over 99% of our revenues and profitability in our pipeline business resulted from work performed for EnCana. Recently, EnCana has significantly reduced its regional development program, resulting in a significant reduction in our pipeline segment revenues. Despite our limited client base in this segment over the past three years, we believe there are significant opportunities to increase our market share by capitalizing on the projected growth in the natural gas industry in western Canada.

For the fiscal year ended March 31, 2004 revenues from this segment accounted for approximately 25% of our total revenues.

Our Markets

The western Canadian markets that we serve are primarily related to the energy industry and have experienced substantial growth in recent years. We provide our services to three primary markets: the Alberta oil sands market, the conventional oil and gas and minerals mining services market, and the commercial and public construction services market.

Alberta oil sands

In serving the Alberta oil sands market, we currently operate approximately 275 pieces of heavy equipment and employ approximately 750 people. Our customers typically require our services in three separate phases of the construction and operation of their oil sands mines. In the pre-operation phase, as they construct the initial mining infrastructure including the extraction and related upgrading facilities, our customers will engage us to provide site preparation and piling services. We believe that approximately 10% to 20% of this work is available to independent service providers such as us. When the mines become operational, some customers choose to outsource a portion of the recurring mining and site preparation services. We believe the operators on average outsource approximately 20% to 25% of these services to independent service providers. As the mine capacity is increased through the expansion and modernization of the related infrastructure, the operators will again engage third-party service providers to perform additional mining and site preparation and piling services.

Alberta oil sands market summary: The Alberta oil sands are spread across 140,800 square kilometers, or 54,363 square miles, of remote landscape in the northeastern portion of the province of Alberta. Most of the Alberta oil sands are buried under sand, gravel, silt and clay, collectively called overburden, and in some places up to 16

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meters of muskeg. The Alberta oil sands themselves lie in a band, often 50 meters thick, below the overburden and above a layer of limestone bedrock.

The Alberta oil sands are developed primarily through the two techniques of open pit surface mining and in-situ, or in-place, production. Our mining and site preparation revenue is primarily derived from projects which utilize the open pit surface mining technique. In open pit surface mining, Alberta oil sands operators, such as Syncrude, Suncor, Albian and CNRL, expose the oil sands by removing the muskeg and overburden. The muskeg is saved for reclamation while the overburden is used for mine and plant site development or to build dykes for tailings ponds required as part of the mining process or placed in a waste dump. Trucks, shovels and other heavy equipment remove the oil sands and take it to the nearby extraction and upgrading plants for processing into a high-quality, light, sweet synthetic crude oil. The extraction process removes the sand through a process of adding, among other things, hot water and agitation. The result is the bitumen. Recovered bitumen that is clean and diluted can be marketed as a conventional crude oil product. To date, the mining developments have combined the raw bitumen recovery with upgrading processes to produce an upgraded light oil (synthetic), which is marketed as an equivalent to light sweet crude oil. Eventually, as mining operations move into new areas, earlier parts of the old mine have to be reclaimed. Reclamation, which is a part of mining, is intended to return the mined area to a natural state, which can be productive for agriculture. Approximately 64% of oil sands production is currently derived by open pit mining. The remaining 36% of current oil sands production is developed through in-situ production. The in-situ technique is typically utilized when oil sands deposits lie 80 meters or more below the ground surface. Steam is used to heat the bitumen, separating it from the sand. Once separated, it can be pumped to the surface, where it is combined with a condensate to make it transportable to refineries suited to heavier crude feedstocks. In order to operate the in-situ process, the operators rely on vast quantities of steam which is produced by using natural gas as a fuel source. As a result, fluctuations in the prices of natural gas can have a significant impact on operating costs.

According to CAPP, there are approximately 6.9 billion barrels of proved reserves at currently producing oil sands properties. According to AEUB, oil sands production is currently approximately one million barrels per day, and accounts for approximately 35% of total Canadian oil production. By 2012, CAPP estimates that oil sands production will be nearly 2.5 times 2003 production levels. According to AED, from 1996 through 2003, an estimated $28 billion was invested in the Alberta oil sands, either to sustain and expand existing projects or develop new projects. From 2004 to 2013, based on a compilation of announced projects, approximately $75 billion is projected to be spent sustaining and expanding existing projects as well as developing new projects. Of this projected spending, we estimate that approximately 10% to 20% will relate to services we perform and upon which we may bid, though there is no assurance that we will be successful in obtaining any of this work.

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The chart below shows actual Alberta oil sands capital expenditures from 1996 to 2003 and announced capital expenditures from 2004 to 2013:

The substantial investment in the development of the Alberta oil sands, as evidenced by the above chart, can be attributed to low finding and development costs, high recovery rates and long reserve lives as compared to conventional oil and gas deposits. Since Alberta oil sands reserves are not trapped in wells deep underground, the reserves are relatively accessible and their size and quality can be readily confirmed. Additionally, oil sands mining projects can experience resource recovery rates of greater than 90%. The typical reserve decline curves do not apply as oil sands reserves can be developed for decades. The long reserve lives in the oil sands result in reduced commodity price volatility risk to producers as they are able to sell their production over a long period of time.

Given the inherent advantages to oil sands production, successful development of the Alberta oil sands will be dependent on the following: (i) additional advances in mining technologies, (ii) increasing demand for crude oil and natural gas in the United States and (iii) supportive government regulation in the form of competitive royalty and fiscal regimes.

Historically, high costs prevented the development of additional Alberta oil sands mining projects beyond the operations of Syncrude and Suncor. However, much of the recent rapid increase in the development of the oil sands is attributable to technological advances in mining techniques. For example, a National Energy Board publication estimated operating costs to have been US$11 to US$14 per barrel in 2000 and projected further reductions to US$10 per barrel in 2005. At these levels, we understand that operating costs in the oil sands are 2.5 to 3.0 times higher than the average operating costs experienced in conventional oil production. However, lower finding and development costs partially offset the higher operating costs when compared to conventional oil production. The most significant technological advancements were a change in mining technique to truck and shovel operations from the dragline/bucket method and the development of hydrotransport which has made the separation of the sand and bitumen easier. As a result, extraction plants are now located at satellite mines.

Over the long-term, we expect development of the Alberta oil sands to benefit from increases in U.S. and Canadian oil consumption. According to the U.S. Energy Information Association, or EIA, U.S. consumption of petroleum is expected to increase by 1.5% annually between 2003 and 2025. Over that same time period, net imports

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as a percentage of supply are expected to increase from 56.2% in 2003 to 68.4% in 2025. Canada already ranks as the largest foreign supplier of oil to the United States and its position as a primary supplier is expected to continue, according to EIA. Additionally, due to unstable political circumstances surrounding several other major U.S. foreign oil suppliers, the United States may benefit from a more secure, reliable source of oil in the future. The Alberta oil sands currently account for approximately 35% of total Canadian crude output. By 2005, sales of synthetic crude oil and bitumen are expected to account for approximately 50% of Canadian crude oil output. Therefore, Alberta oil sands production is expected to capture an increasing share of a growing Canadian market.

Continued government support of the Alberta oil sands will be important to the future development of the industry. The Alberta government, as owner of the oil sands resources, directly influences the development of Alberta oil sands projects primarily through its control of the regulatory approval process and the royalty requirements it places on the oil sands operators. The federal Canadian government impacts oil sands projects through taxation and its support of the Canadian oil industry in the geopolitical arena (e.g., the implementation of the Kyoto Accord). Historically, regulatory approval has not been a significant impediment to Alberta oil sands project development. Typically, negotiation is required with various concerned parties, but a satisfactory solution is generally achievable. A new royalty regime was designed to accelerate investment in the oil sands by providing royalty visibility to operators while offering a fair return to the resource owners. That regime, known as the generic royalty regime, was adopted by the Government of Alberta in 1997 and applies a consistent royalty standard to all future oil sands projects. Prior to the implementation of the generic royalty regime, royalty arrangements were negotiated on a project-by-project basis. Under the generic royalty regime, all new projects and expansions of existing projects will essentially pay royalties according to the following schedule:

• in the pre-payout period, or before the project has recovered all its project costs plus a return allowance, the applicable royalty is 1% of gross revenue from project sales;

• in the past-payout period, or after the project has recovered all its project costs plus a return allowance, the applicable royalty is the greater of 25% of project net revenue or 1% of gross revenue;

• in the year incurred, all cash costs (operating and capital) are 100% deductible; and

• the return allowance is set at the Government of Canada Long Term Bond Rate.

This royalty regime provides an economic incentive for oil sands producers to continue to invest capital and thereby benefit from the tax incentive structure.

Conventional oil and gas and minerals mining services

We provide pipeline installation to natural gas producers and transporters, as well as mining and site preparation and piling services to natural resources mining companies in western Canada. In serving this market, we currently operate 100 pieces of equipment and employ approximately 250 people.

We believe there are many opportunities to grow our revenue base in this market. The increase in demand for natural gas has prompted the industry to announce plans to expand existing pipelines and increase plant-processing capacity. In addition, the proliferation of diamond mines and the continued expansion of other mineral and metal mines in western and northern Canada has lead to numerous site preparation, piling and contract mining opportunities for independent service providers such as ourselves.

Natural gas industry summary: Canada is one of the world’s largest producers of natural gas. Like oil, natural gas is found in sedimentary rock. Raw material gas flowing out of the ground must be processed before it can be injected into long-distance pipeline systems or used by consumers. Generally, producers in western Canada have contractors build the gathering pipelines needed to move raw gas from wells to processing plants. After processing, marketable gas is delivered by producers to distributors through high-pressure steel pipeline systems.

Canada produces approximately 6.3 trillion cubic feet of natural gas annually. The main gas producing area in Canada is the southern portion of the Western Canadian Sedimentary Basin, with about 80% of gas production

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coming from Alberta. The Mackenzie Valley Pipeline, a large Canadian pipeline project, has been planned to transport natural gas from the Beaufort Sea to the Fort McMurray area, southern Alberta and also into the United States. For this project, several leading energy companies previously announced their intention to jointly construct the pipeline. In October 2004, the companies applied for regulatory approvals for the $7 billion project. We anticipate participating in this and other expansion projects.

Minerals mining market summary: Canada is also one of the largest mining nations in the world, producing approximately 60 different minerals and metals. In 2003, the mining and minerals industries contributed $41.1 billion to the Canadian economy, an amount equal to approximately 4.0% of GDP. The value of minerals produced (excluding petroleum and natural gas) reached $20.2 billion in 2003. According to the Alberta government, Canada ranked tenth in the world in total proven coal reserves. Alberta contains 70% of Canada’s coal reserves and, by volume, produces approximately half of the coal mined in Canada annually.

The diamond mining industry in Canada is relatively new, having produced diamonds for approximately five years. However, according to the Mining Association of Canada, the industry has grown quickly from 2.6 million carats of production in 2000 to an estimated 11.2 million carats of production in 2003, or a compounded annual growth rate of approximately 63%. We believe Canadian diamond mining will continue to increase as existing mines increase production and new mine projects are developed. We have identified the growing Canadian diamond mining industry as a primary target for new business opportunities.

Commercial and public construction services

We provide site preparation and piling services to commercial construction companies operating in western Canada, specifically in the Edmonton, Calgary, Regina and Vancouver areas. In serving this market, we currently operate over 25 pieces of equipment and employ approximately 75 people. Over the past 10 years, many commercial construction companies in these areas have consistently selected us to provide site preparation and piling services in connection with the construction of commercial buildings, private industrial projects such as plants and refineries, and infrastructure projects such as bridges. In bidding for projects in these markets, we are willing to accept the role of general contractor or subcontractor depending on the nature of the project.

We believe there will be opportunities to expand our revenue base in our existing locations, as well as establish a presence in other areas of western Canada. The continued strength of the western Canadian economy has led to the planned commercial development of many urban centers in western Canada and to the improvement of public facilities and infrastructure. We are well-positioned to profit from these opportunities.

Western Canada, consisting of Manitoba, Saskatchewan, Alberta, British Columbia, the Yukon, the Northwest Territories and Nunavut, experienced real GDP growth of 2.8% in 2003. By comparison, Alberta’s real GDP grew 2.7% during this period. Alberta’s attractive tax structure provides incentives to both businesses and individuals to locate in the province, and the population has been growing at approximately 1.5 times the national pace. According to the Alberta government, the provincial economy is expected to experience average real GDP growth of 3.2% from 2004 through 2007. The Alberta government has responded to the strain this growth will have on public facilities and infrastructure by allocating approximately $6.5 billion for improvement and expansion projects from 2004 to 2007. We expect to bid on a small percentage of these projects.

In addition to expenditures by provincial and municipal governments, the success of the energy industry in western Canada is leading to the commercial development of many urban centers in northern British Columbia, specifically Fort St. John, and Alberta, particularly Edmonton, Calgary and Fort McMurray.

Equipment

We operate and maintain 450 pieces of heavy equipment, including crawlers, graders, loaders, mining trucks, compactors, scrapers and excavators, as well as over 600 support vehicles, including various service and maintenance vehicles. The equipment is in good condition, normal wear and tear excepted.

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The following table sets forth our fleet of heavy equipment as of December 31, 2004:

		Average		Number in Fleet
Category	Manufacturer	Capacity(a)	Horsepower
Mining and site preparation:
Articulating trucks	Caterpillar, Hitachi	33 tons	316	21
Mining trucks	Caterpillar, Euclid/Hitachi, Titan	157 tons	1,523	63
Shovels	Hitachi, O&K	46 cubic yards	3,300	4
Excavators	Komatsu, John Deere, Hitachi, Caterpillar	3.9 cubic yards	347	94
Crawler tractors	John Deere, Komatsu, Caterpillar	n/a	319	62
Graders	Caterpillar	n/a	275	16
Scrapers	Caterpillar	n/a	450	14
Loaders	Michigan, Caterpillar, Case, Volvo, Komatsu, John Deere	3.4 cubic yards	185	39
Skidsteer loaders	Case, Melroe, Skidsteer, Gehl, John Deere	1.2 cubic yard	84	37
Packers	Caterpillar, Ingersoll Rand	32,588 lbs	197	18
Pipeline:
Snow cats	Terra Tucker, Bombardier	n/a	175	2
Trenchers	Barber Green	n/a	165	2
Pipelayers	John Deere, Caterpillar	100,118 lbs	246	34
Piling:
Drill rigs	Texoma, Drilling Technique Ltd., Soil Mec, Watson 2500	73 ft(b)	220	27
Cranes	P&H, Link-Belt, American, Sumitomo, Bucyrus, Lima	64 tons	196	17
			Total:	450

(a) Capacities are weighted by fleet

(b) Drill depth

We have the largest independent fleet of off-highway construction and mining trucks in the Fort McMurray area. We operate 86 of these large earthmoving vehicles that have a total hauling capacity of approximately 10,500 tons. According to a third party report produced in early 2003, our closest independent competitor had 22 trucks that had a total hauling capacity of 4,940 tons, and the major operators in the oil sands had hauling capacities as follows: Syncrude Canada Ltd. (16,680 tons), Suncor Energy Inc. (18,900 tons) and Albian Sands Energy Inc. (9,880 tons). Our extensive fleet of off-highway trucks allows us to respond to our customers’ requirements in a cost efficient manner while providing a barrier to entry for our competitors.

We attempt to optimize fleet utilization by pooling equipment for use by all business units. We regularly rent our labor and available assets to many clients who intermittently require additional equipment for their mining activities. Providing rental arrangements to clients maximizes equipment utilization and strengthens client relationships. We view these arrangements as an important first step toward obtaining contract mining work from these clients.

Our fleet of earthmoving and heavy construction equipment is subjected to a stringent maintenance program. We constantly evaluate the maintenance requirements of our equipment fleet and consistently replace or refurbish key components of each significant piece of equipment to maximize the efficiency of the fleet and ensure that we have the equipment available to meet our customers’ demands. For the nine months ended December 31, 2004, and the fiscal years ended March 31, 2004, 2003 and 2002, we spent $36.5 million, $48.1 million, $44.1 million and $50.0 million, respectively, to maintain our equipment in good working condition. We possess a relatively young mining equipment fleet with an average age of approximately 6 years. Because a substantial portion of the fleet’s value is based on the age and condition of the major components of each piece of equipment, our rigorous maintenance and refurbishment schedules help maintain the value of our equipment despite its utilization.

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Customers

We derive a significant amount of our revenues from a small number of major and independent oil and gas companies. Our customer base includes major integrated energy companies such as Syncrude, Albian, EnCana, Suncor and CNRL. We also have large mining customers outside of the Alberta oil sands, including Grande Cache Coal. We also perform commercial construction-related services for other customers in the public and private sectors. Our largest customer, Syncrude, accounted for 33%, 52%, 64% and 38% of our revenues for the nine months ended December 31, 2004 and the fiscal years ended March 31, 2004, 2003 and 2002, respectively. Collectively, our largest five customers represented approximately 71%, 91%, 93% and 88% of our revenues for the same periods.

Contracts

We complete work under the following types of contracts: cost plus, time-and-materials, unit price and fixed price. Each contract contains a different level of risk associated with its formation and execution.

A cost plus contract is where all work is completed based on actual costs incurred to complete the work. These costs include all labor, equipment, materials and any subcontractor’s costs. In addition to these direct costs all site and corporate overheads costs are charged to the job. An agreed upon fee in the form of a fixed percentage is then applied to all costs charged to the project. This type of contract is utilized where the project involves a large amount of risk or the scope of the project cannot be readily determined.

A time-and-materials contract involves taking all the components of a cost plus job and rolling them into rates for the supply of labor and equipment. In this regard, all components of the rates are fixed and we are compensated for each hour of labor and equipment supplied. The risk associated with this type of contract is the estimation of the rates and incurring expenses in excess of a specific component of the agreed upon rate. Therefore, any overrun must come out of the fixed margin included in the rates.

A unit price contract is utilized in the execution of projects with large repetitive quantities of work to be completed and is commonly utilized for site preparation, mining and pipeline work. We are compensated for each unit of work we perform. Within the unit price contract, there is an allowance for labor, equipment, materials and any subcontractor’s costs. Once these costs are calculated, we add in any site and corporate overheads along with an allowance for the margin we want to achieve. The risk associated with this type of contract is in the calculation of the unit costs with respect to achieving the required production in the execution phases of the project.

A fixed price, or lump sum, contract is utilized when a detailed scope of work is known for a specific project. Thus, the associated costs can be readily calculated and a firm price provided to the customer for the execution of the work. The risk lies in the fact that there is no escalation of the price if the work takes longer or more resources are required than were estimated in the established price. The price is fixed regardless of the amount of work required to complete it.

Going forward, the percentage of our revenue derived from fixed price and unit price contracts is expected to increase as several of the contracts recently entered into between our joint venture Noramac and CNRL, including the 10-year overburden removal contract and a large site grading contract, are unit price and/or fixed price contracts.

In addition to the types of contracts listed above, we also use master service agreements for work in the oil and gas sector where the scope of the project is not known and timing is critical to ensure the work gets completed. The master service agreement is a form of a time-and-materials agreement that specifies what rates will be charged for the supply of labor and equipment to undertake work. The agreement does not identify any specific scope or schedule of work. In this regard, the customer’s representative establishes what work is to be done at each location. We use master service agreements with the work we perform for Encana.

We also complete a substantial amount of work as subcontractors where we are governed by contracts to which we are not a party. These subcontracts vary in type and conditions with respect to the pricing and terms and are

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governed by one specific prime contract that governs a large project generally. In such cases, the contract with the subcontractors contains more specific provisions regarding a specified aspect of a project.

Joint Venture

We are a partner in a joint venture called Noramac which was awarded contracts with CNRL to perform initial site preparation services for CNRL’s new oil sands mining project and overburden removal on the site over a ten year period. The joint venture agreement provides that our partner and we will determine on a contract by contract basis what percentage of work each of us will perform. With regard to the site preparation contract, our partner and we jointly determined that we would perform substantially all of the work on that project. In addition, our joint venture partner has indicated that it does not intend to participate in a material way in the overburden removal contract. However, by mutual agreement, the partners may elect to alter their respective participation levels in the future on this project. The division of work under any additional contracts which are awarded to Noramac will be determined by the partners at the time those contracts are awarded or services are to be provided.

Major Suppliers

We have preferred supplier relationships with the following equipment suppliers: Finning (Canada) (45 years), Wajax Industries Ltd. (20 years) and Brandt Tractor (30 years). Finning (Canada) is a major heavy equipment Caterpillar dealer for Canada. In addition to the supply of new equipment, they are also a major supplier for equipment rentals, parts and service labor. Wajax Industries Ltd. is a major Hitachi equipment supplier to us for both mining and construction equipment. We purchase or rent John Deere equipment, including excavators, loaders and small bulldozers, from Brandt Tractor.

Competition

Our business is competitive in each of our markets. Historically, the majority of our new business was awarded to us based on past client relationships without a formal bidding process, in which typically a small number of pre-qualified firms submit bids for the project work. Recently, in order to generate new business with new customers, we have had to participate in formal bidding processes. As new major projects arise in our markets, we expect to have to participate in bidding processes on a meaningful portion of the work available to us on these projects. Factors that impact competition include price, safety, reliability, scale of operations, availability and quality of service. Most of our clients and potential clients in the oil sands area operate their own heavy mining equipment fleet. However, these operators have consistently contracted for a significant portion of their mining and site preparation operations and other construction services.

Our principal competitors in the mining and site preparation segment include Cross Construction, Klemke Mining Corporation, Ledcor Limited, Neegan Development Corporation Ltd., Peter Kiewit & Sons, Tercon, Sureway and Thompson Brothers Ltd. The main competition to our deep foundation piling operations comes from Agra Foundations and Double Star. The primary competitors in the pipeline installation business include Ledcor, Washcuk and Midwest Pipelines. Voice and IGL Industrial Inc. are the major competitors in the underground utilities segment.

In the public sector, we compete against national firms and there is usually more than one competitor in each local market. Most of our public sector customers are local governments that are focused on serving only their home regions. Competition in the public sector continues to increase and we typically choose to compete on projects only where we can leverage equipment and operating strengths to secure profitable business.

Properties and Facilities

We own and lease a number of buildings and properties for use in our business. Our administrative functions are located at our headquarters near Edmonton, Alberta, which also houses a major equipment maintenance facility. Project management and equipment maintenance are also performed at regional facilities in Calgary and Fort McMurray, Alberta; Vancouver, Fort Nelson and Prince George, British Columbia; and Regina, Saskatchewan. We occupy office and shop space in British Columbia, Alberta and Saskatchewan under leases which expire between

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2005 and 2009, subject to renewal and termination rights as provided under the particular leases. We also occupy, without charge, some customer-provided lands.

Address	Function	Owned or Leased
Zone 3, Acheson Industrial Area 2-53016 Highway 60 Acheson, Alberta	Corporate headquarters and major equipment repair facility	Leased (a)
2289 Alyth Place S.E. Calgary, Alberta	Regional office and equipment repair facility – piling operations	Building Owned Land Leased (b)
Syncrude Mine Site, South End Fort McMurray, Alberta	Regional office and major equipment repair facility – earthworks and mining operations	Building Owned Land Provided
Syncrude Plant Site Fort McMurray, Alberta	Satellite office and minor repair facility – all operations	Building Rented (c) Land Provided
CNRL Plant Site Fort McMurray, Alberta	Site office and maintenance facility (under construction)	Repair Facility Owned Office Rented (d) Land Provided
Grande Cache Coal Company Site Grande Cache, Alberta	Satellite office and equipment repair facility	Maintenance and Office Facility Provided Land Provided
Aurora Mine Site Fort McMurray, Alberta	Satellite office and equipment repair facility – all operations	Building Under Construction Land Provided
Albian Sands Mine Site Fort McMurray, Alberta	Satellite office and equipment repair facility – all operations	Building Leased (e) Land Provided
9076 River Road Delta, British Columbia	Regional office and equipment repair facility – piling operations	Building Owned Land Leased (f)
2150 Steel Road	Regional office for all business units	Leased (g)
Prince George, British Columbia
4307 55th Street Fort Nelson, British Columbia	Satellite office – pipeline operations	Leased (h)
2010 Industrial Drive Sherwood Industrial Park Regina, Saskatchewan	Regional office and equipment repair facility – piling operations	Leased (i)

(a) Lease expires November 30, 2007.

(b) Lease expires December 31, 2005.

(c) Term of rental through November 30, 2009.

(d) Term of rental through November 30, 2009.

(e) Lease expires November 30, 2009.

(f) No formal lease.

(g) Lease expires March 31, 2006.

(h) Lease expires July 10, 2008.

(i) Lease expires March 14, 2008.

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Our locations were chosen for their geographic proximity to major customers. This proximity allows us to build on strong relationships with customers and create a presence in the regional marketplace. We believe the owned, leased and rented properties are sufficient to meet our needs for the foreseeable future.

Law and Regulations and Environmental Matters

Many aspects of our operations are subject to various federal, provincial and local laws and regulations, including, among others, (1) permitting and licensing requirements applicable to contractors in their respective trades, (2) building and similar codes and zoning ordinances, (3) laws and regulations relating to consumer protection, and (4) laws and regulations relating to worker safety and protection of human health. We believe we have all material required permits and licenses to conduct our operations and are in substantial compliance with applicable regulatory requirements relating to our operations. Our failure to comply with the applicable regulations could result in substantial fines or revocation of our operating permits.

Our operations are subject to numerous federal, provincial and municipal environmental laws and regulations, including those governing the release of substances, the remediation of contaminated soil and ground water, vehicle emissions and air and water emissions. These laws and regulations are administered by federal, provincial and municipal authorities, such as Alberta Environment, Saskatchewan Environment, the British Columbia Ministry of Water, Land and Air Protection and other governmental agencies. The technical requirements of these laws and regulations are becoming increasingly complex and stringent, and meeting these requirements can be expensive. The nature of our operations and our ownership or operation of property expose us to the risk of claims with respect to such matters, and there can be no assurance that material costs or liabilities will not be incurred with such claims. For example, some laws can impose strict, joint and several liability on past and present owners or operators of facilities at, from or to which a release of hazardous substances has occurred, on parties who generated hazardous substances that were released at such facilities and on parties who arranged for the transportation of hazardous substances to such facilities. If we were found to be a responsible party under these statutes, we could be held liable for all investigative and remedial costs associated with addressing such contamination, even though the releases were caused by a prior owner or operator or third party. Our leases typically include covenants which obligate us to comply with all applicable environmental regulations and to remediate any environmental damage caused by us to the leased premises. In addition, claims alleging personal injury or property damage may be brought against us as a result of alleged exposure to hazardous substances resulting from our operations. We do not own or lease any of the properties on which we perform services. We are not currently named as a responsible party, or the Canadian equivalent, for any environmental liabilities on any of the properties on which we currently perform or have performed services. Capital expenditures relating to environmental matters during fiscal 2001 through fiscal 2004 were not material. We do not currently anticipate any material adverse effect on our business or financial position as a result of future compliance with existing environmental laws and regulations to which we are subject. Future events, however, such as changes in existing laws and regulations or their interpretation, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws and regulations may require us to make additional expenditures which may be material.

Employees and Labor Relations

We currently have over 100 full-time permanent and over 1,000 hourly employees. We also utilize the services of subcontractors in our construction business. Approximately 1,000 employees are members of various unions and work under collective bargaining agreements. The majority of our work is done through employees governed by a collective bargaining agreement with the International Union of Operating Engineers Local 955, the primary term of which was recently extended to October 31, 2009, and under a collective bargaining agreement with the Road Building and Heavy Construction Association and the International Union of Operating Engineers Local 955, the primary term of which expires on February 28, 2007. Additionally, we recently signed a 5-year labour agreement for the mining work at Grande Cache Coal and in Fort McMurray for the oil sands. We are subject to other industry and specialty collective agreements under which we complete work, the primary terms of all of which are currently in effect. We believe that our relationships with all our employees, both union and non-union, are generally good. In addition, we have never experienced a strike or lockout.

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Legal Proceedings

In February 2005, certain sisters in the Gouin family sued their brothers and their father. The lawsuit also names us as a defendant. The sisters allege that they maintained beneficial ownership interests in the Gouin family businesses. The assets of those businesses were sold to the equity investors that formed North American Energy Partners as a subsidiary of NACG Holdings Inc. The sisters further allege that the proceeds of such ownership interests, including cash and preferred shares of NACG Preferred Corp., our corporate parent, are being wrongfully held by the Gouin brothers. The sisters seek, among other things, damages from the Gouin brothers and an ownership interest in us. We have notified the Gouin brothers that we are seeking indemnity from them under the agreement relating to the sales transaction for our cost of defense and any damages arising out of the lawsuit. We have answered the lawsuit and are defending our interests. Additionally, we are considering potential claims we may have arising out of the sales transaction.

From time to time, we are a party to litigation and legal proceedings that we consider to be a part of the ordinary course of business. While no assurance can be given, we believe that, taking into account reserves and insurance coverage, none of the litigation or legal proceedings in which we are currently involved could reasonably be expected to have a material adverse effect on our business, financial condition or results of operations. We may, however, become involved in material legal proceedings in the future.

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MANAGEMENT

Directors and Executive Officers

Unless otherwise indicated below, each of the following directors and executive officers holds the indicated positions with North American Energy Partners Inc., NACG Holdings Inc. and NACG Preferred Corp. Each director is elected for a one-year term or until such person’s successor is duly elected and qualified.

Name	Age	Position
Ronald A. McIntosh	63	Chairman
Gordon Parchewsky	55	Vice Chairman
Rodney J. Ruston	54	President and Chief Executive Officer
Vincent Gallant	47	Vice President, Finance
Chris Hayman	42	Treasurer
William Koehn	43	Vice President, Operations and Chief Operating Officer
E.J. Antonio III	40	Director
John A. Brussa	48	Director
Jean-Pierre L. Conte	41	Director
Jim G. Gardiner	60	Director
Donald R. Getty	71	Director
Martin Gouin	43	Director
John D. Hawkins	40	Director
William C. Oehmig	55	Director
K. Rick Turner	47	Director
Gary K. Wright	60	Director

Ronald A. McIntosh became the Chairman of our Board of Directors on May 20, 2004. Since January 2004, Mr. McIntosh has been Chairman of NAV Energy Trust, a Calgary-based oil and natural gas investment trust. Between October 2002 and January 2004, he was President and Chief Executive Officer of Navigo Energy Inc. and oversaw the conversion of Navigo into NAV Energy Trust and C1 Energy Ltd. From July 2002 to October 2002, Mr. McIntosh managed his personal investments. He was Senior Vice President and Chief Operating Officer of Gulf Canada Resources Limited from December 2001 to July 2002 and Vice President, Exploration and International of Petro-Canada from April 1996 through November 2001. Mr. McIntosh is also currently a director of C1 Energy Ltd., Advantage Energy Income Trust and Crispin Energy Inc.

Gordon Parchewsky became the Vice Chairman of NACG Holdings Inc. on April 25, 2005. He has been one of our Directors since November 5, 2003 and was our President from November 26, 2003 to April 25, 2005. Previously, he was President of the predecessor company, North American Construction Group Inc., a position he had held since 2002. Prior to that, Mr. Parchewsky was Vice President of Operations from 1984 to 2002 and was employed by North American Construction Group Inc. since 1971. Mr. Parchewsky has over 30 years of high-level management experience in the heavy construction industry with North American Construction Group Inc. Mr. Parchewsky has managed numerous civil, industrial, pipeline and mine related projects throughout his career. He has been a board member for numerous industry associations including the Canadian Construction Association, Western Canada Roadbuilders Association, Alberta Roadbuilders and Heavy Construction Association and Alberta Chamber of Resources. Mr. Parchewsky graduated in 1971 from the University of Alberta with a Bachelor of Science Degree in Civil Engineering.

Rodney J. Ruston became our President and Chief Executive Officer on May 9, 2005. Previously, Mr. Ruston was Managing Director and Chief Executive Officer of Ticor Limited, a publicly-listed, Australian natural resources company, from June 2000 to July 2004. From July 2004 to May 2005, Mr. Ruston was an independent consultant to the natural resources industry. He was a Principal with Ruston Consulting Services Pty. Ltd., a management consulting company providing business advice to the natural resources industry, from September 1999 to June 2000. Mr. Ruston has spent his entire career in the natural resources industry, holding management positions with Pasminco Limited, Savage Resources Limited, Wambo Mining Corporation, Oakbridge Limited and Kembla Coal & Coke Pty. Limited. He has been Chairman of the Minerals Tertiary Education Council since July 2003 and

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received his Masters of Business Administration from the University of Wollongong and Bachelor of Engineering (Mining) from the University of New South Wales.

Vincent Gallant became our Vice President, Finance, on November 26, 2003. Previously, he served in the same capacity at the predecessor company, North American Construction Group Inc., a position he held since the beginning of 1997. Mr. Gallant has been instrumental in providing financial analysis and reporting, as well as guiding the financing of our growth over the last seven years. Prior to joining North American Construction Group Inc., Mr. Gallant served for three years as Controller of Edmonton Telephones and seven years with Alberta Energy Company Ltd., the last two years as Comptroller. Mr. Gallant graduated from the University of Alberta in 1980 with a Bachelor of Arts Degree, majoring in economics. He has been a Canadian Chartered Accountant since 1983 and worked on the professional staff of Peat, Marwick, Mitchell and Company from 1980 until 1985.

Chris Hayman became our Treasurer on January 17, 2005. Prior to joining our company, Mr. Hayman worked for Finning (Canada) from November 1998 to January 14, 2005; from January 2003 to January 2005, Mr. Hayman was the Vice President and Controller, from August 2001 to December 2003 he served as their Controller and was the Assistant Controller from November 1998 to August 2001. Prior to being with Finning (Canada), Mr. Hayman worked for Enbridge Pipeline for nine years and for Telus Communications for two years. Mr. Hayman graduated from the University of Alberta in 1984 with a Bachelor of Commerce degree majoring in accounting. He has been a Canadian Chartered Accountant since 1987 and worked on the professional staff of Thorne, Ernst and Whinney from 1984 to 1987.

William Koehn became our Vice President, Operations on November 26, 2003 and our Chief Operating Officer on December 8, 2004. Previously, he served as Vice President, Operations for the predecessor company, North American Construction Group Inc., since 2002. Prior to 2002, Mr. Koehn had served as Ft. McMurray Regional Manager since 1997, before which he had served as Project Manager since 1992. Before joining North American Construction Group Inc., he was a Senior Civil Engineer with Quintette Coal Limited. Mr. Koehn joined Quintette in 1986. Mr. Koehn has extensive working knowledge of the oil sands industry and has completed various projects involving oil sands operations, underground piping and piling. He graduated from the University of Alberta in 1983 with a Bachelor of Science Degree in Civil Engineering and recently completed his Masters Degree in Construction Engineering and Management. Mr. Koehn has over 19 years of earthworks and mining experience.

E.J. Antonio III became one of our Directors on January 29, 2004. Mr Antonio joined Perry Capital, a private investment firm, in May 2002 as a Managing Director, the position he holds currently. Perry Capital provides certain services to us pursuant to an advisory services agreement, and an investment entity controlled by Perry is a shareholder in NACG Holdings Inc. See “Related Party Transactions—Advisory Services Agreement” and “Beneficial Ownership of NACG Holdings Inc.’s Common Shares.” Mr. Antonio worked in Deutsche Bank’s Corporate Finance and Mergers, Acquisitions and Corporate Advisory Group as an Associate and Senior Associate from 1998 to March 2002 where he led transaction teams advising clients in the industrial sector. Prior to 1998, Mr. Antonio spent 13 years with General Motors and Delphi Corp. in various senior operating management and business development capacities in the U.S. and Europe. While working for General Motors, he earned an M.B.A. from the Harvard Business School in 1993, an M.S. in manufacturing systems engineering from The Pennsylvania State University in 1988 and a B.S. in industrial engineering and operations research cum laude from Syracuse University in 1987.

John A. Brussa became one of our Directors on November 26, 2003. Mr. Brussa is a senior partner, and Head of the Tax Department, at the law firm of Burnet, Duckworth & Palmer LLP, a leading natural resource and energy law firm located in Calgary. Mr. Brussa has been a partner at the firm since 1987 and has worked at the firm since 1981. Mr. Brussa currently serves as a director of a number of natural resource and energy companies, several mutual fund trusts, and non-profit or charitable organizations. Mr. Brussa received his Bachelor of Laws Degree from the University of Windsor.

Jean-Pierre L. Conte became one of our Directors on November 26, 2003. He is currently chairman, managing director, and limited partner of Genstar Capital, L.P., the manager of Genstar Capital Partners III, L.P., a private equity limited partnership. Genstar provides certain services to us pursuant to an advisory services agreement, and an investment entity controlled by Genstar is a shareholder in NACG Holdings Inc. See “Related Party Transactions—Advisory Services Agreement” and “Beneficial Ownership of NACG Holdings Inc.’s Common

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Shares.” Mr. Conte joined Genstar in 1995. Prior to joining Genstar, Mr. Conte was a principal for six years at the NTC Group, Inc., a private equity investment firm. He has served as a director, chairman of the board, and a member of the compensation committee of PRA International, Inc. since 2001. He has also served as Chairman since 2001, and as a director and member of the compensation committee since 2000, of BioSource International, Inc. Mr. Conte has also served as a member of the Management Committee of AP Enterprises Holdings, LLC since May 2004, as a director of Altra Industrial Motion, Inc. since November 2004, and as a director of Propex Fabrics Inc. since December 2004. Mr. Conte holds an M.B.A. from Harvard University and a B.A. from Colgate University.

Jim G. Gardiner became one of our Directors on November 26, 2003. Mr. Gardiner was President of Fording Canadian Coal Trust and Elk Valley Coal Partnership, operators of coal mines, from March 2003 until his retirement in March 2004. From 1993 to March 2003, he was President and Chief Executive Officer of Fording Income Trust and Fording Inc. Mr. Gardiner became a Trustee of the Westshore Terminals Income Fund in June 2004. He is the past Chairman of the Coal Industry Advisory Board of the International Energy Agency, a past member of the Sectoral Advisory Group in International Trade (SAGIT), Energy, Chemical and Plastics Division, the past Chairman of the Coal Association of Canada, and past Deputy Chairman of the World Coal Institute. Mr. Gardiner received a B.S. in civil engineering from the University of Saskatchewan.

Donald R. Getty became one of our Directors on November 26, 2003. Mr. Getty is President and Chief Executive Officer of Sunnybank Investments Ltd., a private investment and consulting firm based in Edmonton, Alberta. Mr. Getty has held this position since December 1992 when he retired as Premier of Alberta. Mr. Getty was the 11th Premier of Alberta since the province was formed in 1905. As Premier of Alberta, Mr. Getty’s government as successful in emphasizing development of non-conventional oil projects and diversifying Alberta’s economy, among other initiatives. Before serving as Premier of Alberta, Mr. Getty had a distinguished career in both the public and private sectors. Mr. Getty graduated from the University of Western Ontario with a degree in Honours Business Administration. He currently serves on the boards of Guyanor Resources, S.A., West Isle Energy Inc. (formerly Mera Petroleum Inc.) and Nationwide Resources Inc. and is a director and vice chairman of Horse Racing Alberta, a non-profit organization. On January 28, 2004, Mr. Getty became Chairman and a director of K.C.P. Innovative Services Inc., and on November 15, 2004, he became Chairman and a director of Canglobe International Inc. In addition, in 1998, Mr. Getty was appointed an officer of the Order of Canada and in 1994 as a member of the Alberta Order of Excellence. In 2003, he received an Honorary Degree of Law from the University of Lethbridge.

Martin Gouin became one of our Directors on November 26, 2003. Mr. Gouin is President of Norama, a holding and management company, a position he has held since April 1, 1996. Mr. Gouin was also President and Chief Executive Officer of North American Construction Group Inc. from 1995 to November 2003. Prior to becoming President and Chief Executive Officer in 1995, Mr. Gouin held numerous positions at North American Construction Group Inc., including Vice-President, Operations. He has 24 years of experience servicing the oil sands industries. He has been a director of numerous companies serving the metals and plastics industries and was president of Cynergy Fireplace International for three years prior to divesting the operation in 1988. Mr. Gouin attended the University of Alberta and majored in economics.

John D. Hawkins became one of our Directors on October 17, 2003. Mr. Hawkins has been a Principal with The Sterling Group, L.P., a private equity investment firm, since 1999. The Sterling Group provides certain services to us pursuant to an advisory services agreement, and an investment entity controlled by The Sterling Group is a shareholder in NACG Holdings Inc. See “Related Party Transactions—Advisory Services Agreement” and “Beneficial Ownership of NACG Holdings Inc.’s Common Shares.” Mr. Hawkins joined Sterling as an Associate in 1992. From 1986 to 1990, he was on the professional staff of Arthur Andersen & Co. Mr. Hawkins currently serves on the board of Exopack Holding Corp. Mr. Hawkins received a B.S.B.A. in Accounting from the University of Tennessee and an M.B.A. with honors from the Owen Graduate School of Management at Vanderbilt University.

William C. Oehmig became the Chairman of our Board of Directors on November 26, 2003 and assumed the role of Director on May 20, 2004. Mr. Oehmig has been a Principal with The Sterling Group, L.P., a private equity investment firm, since 1984, having worked previously in banking, mergers and acquisitions, and as Chief Executive Officer and Chief Financial Officer of several companies. The Sterling Group provides certain services to us pursuant to an advisory services agreement, and an investment entity controlled by The Sterling Group is a shareholder in NACG Holdings Inc. See “Related Party Transactions—Advisory Services Agreement” and

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“Beneficial Ownership of NACG Holdings Inc.’s Common Shares.” In the past, Mr. Oehmig has served as Chairman of Royster Company and PM Holdings Corp. (parent of Purina Mills, Inc.), chaired the executive committee of SDI Holdings, Inc. (parent of Sterling Diagnostic Imaging, Inc.) and Airtron, Inc., and served on the boards of Walter International, an international oil and gas company; Atlantic Coast Airlines, a regional passenger airline; and Rives Carlberg, an advertising firm. He is past Chairman and currently a director of Exopack Holding Corp and currently a director of Propex Fabrics Inc. Mr. Oehmig is also Past Chairman of the board of trustees at The Baylor School in Chattanooga, Tennessee. Mr. Oehmig received his B.B.A. in Economics from Transylvania University and his M.B.A. from the Owen Graduate School of Management at Vanderbilt University.

K. Rick Turner became one of our Directors on November 26, 2003. Mr. Turner has been a Principal of Stephens Group, Inc.’s merchant banking activities since 1990. Stephens Group, Inc. is the parent of Stephens, Inc., an investment banking firm. Stephens provides certain services to us pursuant to an advisory services agreement, and an investment entity controlled by Stephens is a shareholder in NACG Holdings Inc. See “Related Party Transactions—Advisory Services Agreement” and “Beneficial Ownership of NACG Holdings Inc.’s Common Shares.” Mr. Turner joined Stephens in 1983. His areas of focus have been oil and gas exploration, natural gas gathering, processing industries and power technology. Prior to joining Stephens in 1983, he was employed by Peat, Marwick, Mitchell and Company. Mr. Turner currently serves as a director of Atlantic Oil Corporation, SmartSignal Corporation, JV Industries, LLC, Jebco Seismic LLC and the general partner of Energy Transfer Partners, LP. Mr. Turner earned his Bachelor of Science in Business Administration at the University of Arkansas and is a Certified Public Accountant.

Gary K. Wright became one of our Directors on November 26, 2003. Mr. Wright was President of LNB Energy Advisors, a unit of The Laredo National Bank that provides banking and advisory services to small and mid-sized oil and gas producers, from June 2003 until his retirement in September 2004. Between August 2001 and June 2003 Mr. Wright was an independent consultant to the energy industry. From 1998 to August 2001, Mr. Wright was North American Senior Credit Officer for the Global Oil and Gas Group of Chase Manhattan Bank. From 1992 to 1998, he served as Managing Director and Senior Client Manager in the Southwest. Between 1990 and 1992, Mr. Wright was Manager of the Chemical Bank Worldwide Energy Group. Prior to that he held various positions with Texas Commerce Bank. Mr. Wright currently serves on the board of Penn Virginia Corporation. He holds a B.S. in Petroleum Engineering from Louisiana State University and a Juris Doctor from Loyola School of Law.

The Board and Board Committees

Our board supervises the management of North American Energy Partners Inc. as provided by Canadian law.

NACG Holdings Inc.’s board has established the following committees:

• The Executive Committee, which possesses all the powers and authority of NACG Holdings Inc.’s board with respect to the management and direction of the business and affairs of NACG Holdings Inc., except as limited by Section 115(3) of the Canada Business Corporations Act. The Executive Committee is currently composed of Messrs. Antonio, Conte, Hawkins, Oehmig, Parchewsky and Turner, with Mr. Oehmig serving as Chair;

• The Audit Committee, which recommends independent public accountants to NACG Holdings Inc.’s board, reviews the annual audit reports of NACG Holdings Inc. and reviews the fees paid to NACG Holdings Inc.’s chartered accountants. The Audit Committee reports its findings and recommendations to the board for ratification. The Audit Committee is currently composed of Messrs. Antonio, Brussa, Gouin, Hawkins, Turner and Wright, with Mr. Hawkins serving as Chair; and

• The Compensation Committee, which is charged with the responsibility for supervising executive compensation policies for NACG Holdings Inc. and its subsidiaries, administering the employee incentive plans, reviewing officers’ salaries, approving significant changes in executive employee benefits and recommending to the board such other forms of remuneration as it deems appropriate. The Compensation Committee is currently composed of Messrs. Brussa, Conte, Gardiner, Getty, Bouin and Oehmig, with Mr. Conte serving as Chair.

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NACG Holdings Inc.’s board, acting as a committee of the whole board, has the responsibility for considering nominations for prospective board members of each of NACG Holdings Inc., NACG Preferred Corp. and us. The board will consider nominees recommended by other directors, shareholders and management, provided that nominations by shareholders are made in accordance with NACG Holdings Inc.’s bylaws. NACG Holdings Inc.’s board may also establish other committees.

Director Compensation

Directors of NACG Holdings Inc. and North American Energy Partners Inc. will each receive an annual aggregate retainer of $32,500 and a fee of $1,500 for each meeting of the board or any committee of the board that they attend, and will be reimbursed for reasonable out-of-pocket expenses incurred in connection with their services pursuant to NACG Holdings Inc.’s policies. Martin Gouin and directors who are also our employees do not receive director compensation.

In addition, our directors have received grants of stock options under NACG Holdings Inc.’s 2004 Share Option Plan. Each director, excluding Martin Gouin and directors who are also our employees, received options to purchase 1,388 NACG Holdings Inc. common shares, with the exception of Mr. McIntosh, our Chairman, who received options to acquire 3,500 shares. All the options have an exercise price of $100 per share, vest on a straight-line basis over five years and expire on November 26, 2013.

Executive Compensation

The following summary compensation table sets forth the total value of compensation earned by our chief executive officer and each of the other four most highly compensated officers as of March 31, 2004, collectively called the named executive officers, for services rendered in all capacities to us for the fiscal years ended March 31, 2004, 2003 and 2002.

Summary Compensation Table

	Annual Compensation							Long-Term Compensation
Name and Principal Position	Fiscal Year	Salary		Bonus			Other Annual Compensation	Securities Underlying Options (a)
Gordon Parchewsky President	2004 2003 2002	$	186,000 144,000 138,000	$	1,300,000 275,000 300,000	(b)	(c) (c) (c)	6,000 —   —	(d)
William Koehn Vice President, Operations	2004 2003 2002	$	170,000 132,000 132,600	$	1,300,000 275,000 300,000	(b)	(c) (c) (c)	5,000 —   —
Vincent Gallant Vice President, Finance	2004 2003 2002	$	162,000 126,000 122,250	$	1,250,000 225,000 250,000	(b)	(c) (c) (c)	5,000 —   —
James Humphries Division Manager, Piling	2004 2003 2002	$	130,500 123,000 115,350	$	471,500 110,000 125,000	(e)	(c) (c) (c)	2,000 —   —
Robert Cochrane Division Manager, Pipeline	2004 2003 2002	$	114,000 114,000 118,350	$	357,500 90,000 140,000	(e)	(c) (c) (c)	2,000 —   —

(a) Consists of options to purchase NACG Holdings Inc. common shares.

(b) Includes a $750,000 transaction bonus and a $250,000 performance bonus, both paid by Norama Inc., the parent of Norama Ltd., upon closing of the acquisition.

(c) The amount of other annual compensation does not exceed the lesser of $50,000 and 10% of the salary and bonus for the fiscal year.

(d) In accordance with Mr. Parchewsky’s revised duties, as discussed above under “—Directors and Executive Officers,” 3,200 of the options granted in fiscal 2004 were cancelled effective April 25, 2005. Of the remaining 2,800 options, 1,200 vested on November 26, 2004 and the remaining 1,600 will vest ratably on each November 26 of the next four years. All other terms of the stock options are unchanged.

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(e) Includes a $200,000 transaction bonus and a performance bonus of $116,500, in the case of Mr. Humphries, and a $200,000 transaction bonus and a $67,500 performance bonus in the case of Mr. Cochrane, all of which was paid by Norama Inc., the parent of Norama Ltd., upon closing of the acquisition.

Option Grants in Last Fiscal Year(a)

Name	Number of Securities Underlying Options Granted	% of Total Options Granted to Employees in Fiscal Year		Exercise Price Per Share		Expiration Date	Grant Date Present Value (b)
Gordon Parchewsky	6,000	11.08	%	$	100	November 26, 2013	$	228,351
William Koehn	5,000	9.24	%		100	November 26, 2013		190,293
Vincent Gallant	5,000	9.24	%		100	November 26, 2013		190,293
James Humphries	2,000	3.69	%		100	November 26, 2013		76,117
Robert Cochrane	2,000	3.69	%		100	November 26, 2013		76,117

(a) For material terms of the NACG Holdings Inc. 2004 Share Option Plan and the option grants, see note 17 to our audited consolidated financial statements included in this prospectus.

(b) Estimated using the Black-Scholes option pricing model, assuming: a dividend yield of 0%, a risk-free interest rate of 4.79%, volatility of 0%, and an expected life of 10 years.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

Name	Shares Acquired on Exercise	Value Realized	Number of Securities Underlying Unexercised Options at March 31, 2004 (Exercisable/ Unexercisable)	Value of Unexercised In-the-Money Options at March 31, 2004 (Exercisable/ Unexercisable)
Gordon Parchewsky	—	—	—/6,000	—/—
William Koehn	—	—	—/5,000	—/—
Vincent Gallant	—	—	—/5,000	—/—
James Humphries	—	—	—/2,000	—/—
Robert Cochrane	—	—	—/2,000	—/—

Retirement Benefits for Executive Officers and Directors

For the fiscal year ended March 31, 2004, the total amount we set aside for pension, retirement and similar benefits for our executive officers and directors was $15,540, consisting of employer matching contributions to our executive officers’ Registered Retirement Savings Plan accounts of up to 3% of salary.

Retention Bonus

Norama Inc., the parent of Norama Ltd., will pay to each of Messrs. Parchewsky, Koehn and Gallant a retention bonus of $750,000 on November 26, 2006, three years after the closing of our acquisition of North American Construction Group Inc., provided they are still employed by us.

Annual Incentive Plan

NACG Holdings Inc. has established a management incentive plan. The incentive plan is administered by the compensation committee of the board of directors. The plan will establish a bonus pool to be paid to participants if a target level of financial performance is achieved. If our actual financial performance exceeds or falls short of the targeted level of performance, the amount of the pool available to be paid will increase or decrease, respectively. The compensation committee will recommend to the board of directors the total pool, the target financial performance, the participants and each participant’s share of the potential pool.

Share Option Plan

NACG Holdings Inc. has adopted the 2004 Share Option Plan. The option plan is administered by the compensation committee of the board of directors. Option grants under the option plan may be made to directors, officers, employees and service providers selected by the compensation committee. The option plan provides for the

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discretionary grant of options to purchase common shares. The exercise price of stock options must not be less than the fair market value of common shares on the date of grant, as determined by the committee in its sole discretion. The committee may provide that the options will vest immediately or in increments over a period of time.

Profit Sharing Plan

NACG Holdings Inc. has established a profit sharing plan covering all full-time salaried employees, including executive officers. The profit sharing plan is administered by the compensation committee. Amounts paid under the profit sharing plan will constitute taxable income in the year received and will be based on our financial performance over a period of time to be determined. The compensation committee will recommend to the board of directors for approval, a target level of financial performance to be achieved and an amount to be set aside for profit sharing if the target is met. If financial performance exceeds this minimum level, we may make distributions to employees. The compensation committee may change the amount set aside for profit sharing and the proportion of such amount allocate to an individual employee or group of employees.

President and Chief Executive Officer

We have agreed in principle to the terms of employment of Rodney Ruston, our new President and Chief Executive Officer. The definitive employment agreement, when completed, is expected to provide the following terms. The initial term of Mr. Ruston’s employment will be five years, unless earlier terminated. If his employment is terminated by us without cause or if his employment is not renewed at the end of the initial five year term, Mr. Ruston will receive a severance payment equal to his then-annual salary plus the amount of his bonus payment in the year preceding the termination date. The agreement will provide for a $600,000 annual salary to be reviewed annually by the board of directors, plus a grant of options to purchase 20,000 NACG Holdings Inc. common shares, with an exercise price of $100 per share and subject to vesting at the rate of 20% per year. During the term of the agreement, Mr. Ruston will be eligible for an annual cash bonus of up to 50% of his annual salary, to be prorated in 2005, and will receive an annual travel allowance of $25,000 to cover the costs of traveling to and from his home country of Australia.

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RELATED PARTY TRANSACTIONS

Advisory Services Agreement

Pursuant to an agreement, dated October 31, 2003, among The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc., and Stephens Group, Inc., referred to in the agreement as the “sponsors,” and NACG Holdings Inc. and certain of its subsidiaries, including us, referred to in the agreement as the “companies,” the sponsors provided consulting and advisory services with respect to the organization of the companies, the structuring of the acquisition of North American Construction Group Inc., employee benefit and compensation arrangements and other matters. The agreement also provides that each of the companies, jointly and severally, will indemnify the sponsors against liabilities relating to their services. Under the agreement, for these services, we paid, at the closing of the transactions pursuant to which we became an indirect subsidiary of NACG Holdings Inc., a one-time transaction fee of US$3.0 million to Sterling and a one-time transaction fee of US$3.0 million to be shared among the sponsors and BNP Paribas Private Capital Group on a pro rata basis in accordance with their respective equity commitments to NACG Holdings Inc. We also reimbursed the sponsors for their expenses. Under the agreement, at the closing of the transactions, we paid to the sponsors a pro rated management fee for the period from closing until March 31, 2004 totaling approximately $133,000. In addition, the agreement provides that on each June 30 through June 30, 2013, we will pay the sponsors whose services have not terminated in accordance with the agreement, as a group, an annual management fee in cash totaling the greater of $400,000 and 0.5% of our EBITDA for the previous twelve month period ended March 31.

In addition, the agreement provides that if any one or more of the companies determines within ten years of the date of the closing of the transactions to acquire any business or assets having a value of US$1.0 million or more, referred to in the agreement as a “future corporate transaction,” or to offer its securities for sale publicly or privately or to otherwise raise any debt or equity financing, referred to in the agreement as a “future securities transaction,” the relevant company will retain one or more of the sponsors, whose services have not been terminated in accordance with the agreement, as a group, as consultants with respect to the transaction. For any future corporate transactions, the relevant sponsors are entitled under the agreement to receive a fee in the amount of 1% of the aggregate consideration paid for the acquisition plus the aggregate amount of assumed liabilities and, regardless of whether such future corporate transaction is consummated, any expenses or fees incurred by any sponsor in connection therewith. For any future securities transactions, the relevant sponsors are entitled to receive under the agreement a fee in the amount of 0.5% of the aggregate gross proceeds to the companies from such transaction and, regardless of whether such future securities transaction is consummated, any expenses or fees incurred by any sponsor in connection therewith. Actual amounts payable for these services will be limited by the terms of the notes. See “Description of the Notes—Certain Covenants—Limitations on Transactions with Affiliates.”

Office Leases

We are party to lease agreements with Acheson Properties Ltd., a company owned, indirectly and in part, by Martin Gouin, one of our directors. Mr. Gouin has an approximate 50% beneficial interest in Acheson Properties Ltd. Pursuant to the agreements, we lease our corporate headquarters in Acheson, Alberta, and our offices in Fort Nelson, British Columbia and Regina, Saskatchewan. See “Business—Properties and Facilities” for further information regarding these leases. For the fiscal year ended March 31, 2004 and the nine months ended December 31, 2004, we paid a total of approximately $658,000 and $498,600, respectively, pursuant to these leases. The lease agreements were in place before the consummation of the transactions pursuant to which we became an indirect subsidiary of NACG Holdings Inc. We believe the terms of the lease agreements are fair and reasonable.

Shareholders Agreements

All employees of NACG Holdings Inc. or any of its subsidiaries who are holders of NACG Holdings Inc.’s common shares are party to an employee shareholders agreement, and all other holders of NACG Holdings Inc.’s common shares are party to an investor shareholders agreement. Each shareholders agreement includes specified transfer restrictions, rights of first refusal and tag along rights. The investor shareholders agreement also provides the holders who are party thereto preemptive rights and tag along rights.

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Voting and Corporate Governance Agreement

NACG Holdings Inc. is party to a voting agreement with affiliates of The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc. and Stephens Group, Inc. that includes the following provisions:

Directors

The agreement provides that, as long as a shareholder party to the agreement, along with its affiliates, and various permitted tranferees own at least 50% of the common shares that it initially purchased in the offering of common shares, such shareholder may designate one director of NACG Holdings Inc. In addition, as long as Sterling and various permitted transferees own at least 75% of the common shares that it initially purchased in the offering of common shares, it may designate one additional director. Each shareholder party to the agreement agrees to vote the common shares held by it for each of the designated directors. The shareholder parties to the agreement also agree to vote their common shares in favor of the election to the board of directors of NACG Holdings Inc. of independent directors designated by a specified majority of the shareholder parties to the agreement or their appointed voting representatives. The voting agreement contains similar provisions for the removal of a director designated for removal by the parties to the agreement.

Permitted Transactions

The voting agreement provides that each shareholder party to the agreement will not, and will not permit any of its affiliates to, enter into, renew, extend or be a party to any transaction or series of transactions with NACG Holdings Inc. or any of its subsidiaries without the prior written consent of the holders of a specified majority of shares subject to the agreement, other than such holder or its affiliates, except for:

• issuances of capital shares pursuant to, or the funding of, employment arrangements, share options and share ownership plans approved by the board of directors of NACG Holdings Inc.;

• the grant of share options or similar rights to employees and directors pursuant to plans approved by the board of directors of NACG Holdings Inc.;

• loans or advances to executive officers approved by the board of directors of NACG Holdings Inc.;

• the payment of reasonable fees to directors of NACG Holdings Inc. and its subsidiaries who are not employees of NACG Holdings Inc. or its subsidiaries in their capacities as board members or members of committees of the board as may be approved by the board;

• any transaction between subsidiaries of NACG Holdings Inc.; and

• the registration rights agreement, the investor shareholders agreement and the advisory services agreement described in this “Related Transactions” section.

Registration Rights Agreement

NACG Holdings Inc. is party to a registration rights agreement with certain of its shareholders. The registration rights agreement includes the following provisions:

• Piggyback Registrations. After an initial public offering of the common shares of NACG Holdings Inc., the holders of qualified registrable securities, as defined in the agreement, will have piggyback registration rights when NACG Holdings Inc. proposes to register such common equity securities in a qualified registration other than a demand registration.

• Demand Registrations. Subject to specified restrictions, after an initial public offering, and upon written request, holders of qualified registrable securities have demand registration rights if such

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registrable securities to be included have, in the good faith opinion of NACG Holdings Inc., an aggregate fair market value of at least US$20.0 million.

The registration rights agreement also contains customary provisions with respect to registration procedures, indemnification and contribution rights.

Terms of Senior Preferred Stock

Concurrently with the closing of the offering of the original notes, we issued to investment entities controlled by The Sterling Group, L.P., Genstar Capital, L.P., Perry Corp. and Stephens Group, Inc., 7,500 shares of senior preferred stock, referred to as the “Sponsor Preferred Stock,” for an aggregate purchase price of $7.5 million and issued to BNP Paribas, one of the counterparties to the Swap Agreements, 1,000 shares of a separate class of senior preferred stock. The Sponsor Preferred Stock and the separate class of preferred stock are referred to as the “Redeemable Preferred Stock.”

The Sponsor Preferred Stock contains the following terms:

• Purchase Price – $1,000 per share.

• Dividends – We will pay a cumulative dividend of 15% per annum on the Sponsor Preferred Stock, in priority to our common stock. Any unpaid dividends on the Sponsor Preferred Stock will accrue and compound annually. Dividends on the Sponsor Preferred Stock are payable-in-kind and are not payable in cash for so long as the notes and the 8¾% senior notes due 2011 are outstanding (or so long as any refinancing, restructuring, deferment, extension, renewal, refund, repayment, prepayment, redemption, defeasance or retirement, or issuance of a security or indebtedness in exchange or replacement for such notes in whole or in part is outstanding), unless permitted by the Restricted Payments covenants of the indentures governing the notes and the 8¾% senior notes due 2011, respectively. If we have paid all cumulative but unpaid dividends on the Sponsor Preferred Stock in cash, we may pay dividends on our common stock, provided that we pay the holders of the Sponsor Preferred Stock an aggregate of 25% of such dividends. We will, however, be permitted to pay limited cash dividends on our common stock for specified purposes consistent with the terms of the indenture governing our 8¾% senior notes and the terms of the indenture governing the notes without paying or accruing related dividends on the Sponsor Preferred Stock.

• Ranking – The Sponsor Preferred Stock is our senior equity obligation and ranks equally with all of our other existing and future senior equity obligations. The Sponsor Preferred Stock is junior to all of our liabilities, including for example (a) our outstanding 8¾% senior notes, (b) any obligations outstanding under our new revolving credit facility, (c) our swap agreements and (d) the notes.

• Liquidation Preference – In the event of liquidation, sale, merger, consolidation, winding up or other similar transactions, or upon an initial public offering of our common shares or the common shares of NACG Holdings Inc. resulting in aggregate net proceeds of at least $100.0 million (each, a “Liquidation Event”), the holders of Sponsor Preferred Stock will be entitled to receive, in preference to holders of common stock and the holders of any other series of preferred stock, other than the senior preferred stock issued to BNP Paribas, the greatest of (a) an aggregate of $15,000,000, less the amount, if any, of dividends previously paid in cash, and (b) an amount (when combined with the amount, if any, of any dividends previously paid in cash) which is sufficient to provide the Sponsor Preferred Stock with a 40% internal rate of return, and (c) an amount that equals 25% of the aggregate amount distributable to all of our equity holders immediately prior to such Liquidation Event. After all preferential amounts have been paid to the holders of all preferred stock, all remaining assets will be distributed to holders of common stock and other preferred stock, if any, without further participation by the Sponsor Preferred Stock. A transaction meeting the definition of a change in control transaction, including a merger, acquisition, stock sale, or sale of all or substantially all of our assets or the assets of any subsidiary, will be deemed to be a Liquidation Event. Any payment to which the Sponsor Preferred Stock is entitled must comply with the terms of the new revolving credit agreement,

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the terms of the indenture governing our 8¾% senior notes and the terms of the indenture governing the notes.

• Certain Covenants – The Sponsor Preferred Stock contains covenants, which are no more restrictive than those in the indenture governing our 8¾% senior notes or the indenture governing the notes, limiting our ability, and the ability of most or all of our subsidiaries, to, among other things:

• incur or guarantee additional debt, issue disqualified capital stock or enter into sale and leaseback transactions;

• in the case of us, pay dividends or distributions on capital stock or repurchase capital stock or make other restricted payments;

• make certain investments or acquisitions;

• consolidate, merge or transfer all or substantially all of our assets; and

• transfer or sell assets, including capital stock of our subsidiaries.

• Optional Redemption – We are permitted to redeem the Sponsor Preferred Stock at any time at a redemption price (the “Redemption Price”) equal to the greatest of (a) an aggregate of $15,000,000, less the amount, if any, of dividends previously paid in cash, (b) an amount (when combined with the amount, if any, of any dividends previously paid in cash) which is sufficient to provide the Sponsor Preferred Stock with a 40% internal rate of return, and (c) the amount that equals 25% of our equity value as determined by mutual agreement between the disinterested members of our board of directors and the holders of a majority of the Sponsor Preferred Stock or, in the event no mutual agreement can be reached, the equity value shall be determined by a mutually acceptable investment bank which determination shall be final and binding.

• Mandatory Redemption – If not previously redeemed, we must redeem the Sponsor Preferred Stock at the Redemption Price on December 31, 2011.

• Additional Amounts – If any payments on or in respect to the Sponsor Preferred Stock, including dividends, payments upon a Liquidation Event or payments of the Redemption Price, are subject to any tax-related withholding or deduction, then we will increase such payments by the amount necessary so that the net amount received by each holder of the Sponsor Preferred Stock is equal to the amount such holder would have received in the absence of any such withholding or deduction.

The 1,000 shares of the separate class of senior preferred stock we issued to a counterparty to the Swap Agreements have terms similar to those described above, except that they do not contain the covenants described above and are not entitled to accrue or receive dividends. In addition, in the event of a Liquidation Event or redemption, this class of senior preferred stock will be entitled to receive solely an amount equal to $1,000 per share.

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BENEFICIAL OWNERSHIP OF NACG HOLDINGS INC.’S COMMON SHARES

The following table presents certain information regarding the ownership of shares of NACG Holdings Inc.’s voting common shares by the named executive officers, each director of NACG Holdings Inc. and North American Energy Partners Inc., all directors and executive officers as a group and each person who was the beneficial owner of more than 5% of the outstanding voting common shares of NACG Holdings Inc. as of May 1, 2005. As of May 1, 2005, NACG Holdings Inc. had 904,380 voting common shares and 20,620 non-voting common shares outstanding. For purposes of this section, “common shares” refers only to NACG Holdings Inc.’s voting common shares. All of our common shares are owned by NACG Preferred Corp., and all of its common shares are owned by NACG Holdings Inc. Except as otherwise indicated in the footnotes to the table, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated common shares. Except as otherwise indicated, the address of each of the beneficial owners is c/o NACG Holdings Inc., Zone 3, Acheson Industrial Area, 2-53016 Highway 60, Acheson, Alberta, T7X 5A7.

Notwithstanding the beneficial ownership of common shares presented below, the voting agreement governs the exercise of voting rights by the shareholders party to that agreement with respect to election of directors and certain other material events. The parties to the voting agreement have agreed to vote their shares to elect the board of directors as set forth in the agreement. See “Related Transactions—Voting and Corporate Governance Agreement.”

The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

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Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		% of Outstanding Common Shares
E.J. Antonio III	277	(a)	*
John A. Brussa	4,277	(a)	*
Robert Cochrane	1,400	(b)	*
Jean-Pierre L. Conte	277	(a)	*
Vincent Gallant	6,000	(c)	*
Jim G. Gardiner	527	(a)	*
Donald R. Getty	1,277	(a)	*
Martin Gouin	—		—
John D. Hawkins	277	(a)	*
Chris Hayman	—		—
James Humphries	1,400	(b)	*
William Koehn	6,000	(c)	*
Ronald A. McIntosh	2,700	(d)	*
William C. Oehmig Eight Greenway Plaza, Suite 702 Houston, Texas 77046	13,427	(e)	1.48
Gordon Parchewsky	6,200	(f)	*
Rodney J. Ruston	—		—
K. Rick Turner	277	(a)	*
Gary K. Wright 3 Ourlane Court Houston, Texas 77024	1,263	(a)	*
Directors and executive officers as a group (18 persons)	45,579	(g)	5.04
Sterling Group Partners I, L.P. Eight Greenway Plaza, Suite 702 Houston, Texas 77046	272,456	(h)	30.13
Perry Partners International, Inc. 599 Lexington Avenue New York, New York 10022	104,542	(i)	11.56
Perry Partners, L.P. 599 Lexington Avenue New York, New York 10022	92,707	(i)	10.25
Genstar Capital Partners III, L.P. Four Embarcardero Center, Suite 1900 San Francisco, California 94111	190,412	(j)	21.05
Stephens-NACG LLC 111 Center Street Little Rock, Arkansas 72201	131,500	(k)	14.54
Paribas North America, Inc. 787 Seventh Avenue New York, New York 10019	45,130		4.99

* Less than 1%.

(a) Includes currently exercisable options to purchase 277 shares.

(b) Includes currently exercisable options to purchase 400 shares.

(c) Includes currently exercisable options to purchase 1,000 shares.

(d) Includes currently exercisable options to purchase 700 shares.

(e) Includes 1,288 shares that have been donated by Mr. Oehmig but over which Mr. Oehmig retains sole voting power. Also includes currently exercisable options to purchase 277 shares.

(f) Includes currently exercisable options to purchase 1,200 shares.

(g) Includes currently exercisable options to purchase 7,193 shares.

(h) Sterling Group Partners I GP, L.P. is the sole general partner of Sterling Group Partners I, L.P. Sterling Group Partners I GP, L.P. has five general partners, each of which is wholly-owned by one of Frank J. Hevrdejs, William C. Oehmig, T. Hunter Nelson, John D. Hawkins and C. Kevin Garland. Each of these individuals disclaims beneficial ownership of the shares owned by Sterling Group Partners I, L.P.

(i) Richard Perry is the President and sole shareholder of Perry Corp., which is the investment manager of Perry Partners International, Inc. and the managing general partner of Perry Partners, L.P. As such, Mr. Perry may be deemed to have beneficial ownership over the respective securities owned by Perry Partners International, Inc. and Perry Partners, L.P.; however, Mr. Perry disclaims such beneficial ownership, except to the extent of his pecuniary interest, if any, therein. Perry Corp. is an affiliate of Perry Strategic Capital Inc.

(j) Genstar Capital III, L.P. is the sole general partner of each of Genstar Capital Partners III, L.P. and Stargen III, L.P., which owns an additional 6,838 shares, and Genstar III GP LLC is the sole general partner of Genstar Capital III, L.P. Jean-Pierre L. Conte, Richard F. Hoskins and Richard D. Paterson are the managing members of Genstar III GP LLC. In such capacity, Messrs. Conte, Hoskins and Paterson may be deemed to beneficially own shares of common stock beneficially owned, or deemed to be beneficially owned, by Genstar III GP LLC, but disclaim such beneficial ownership.

(k) Stephens Group, Inc. is the sole manager of Stephens-NACG LLC. No natural person may be deemed to beneficially own the shares owned by Stephens-NACG LLC.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

New Revolving Credit Facility

Upon the closing of the offering of the notes, we entered into an agented credit agreement with a syndicate of lenders that provided us with a $40.0 million revolving credit facility. The following is a summary of the provisions of the new revolving credit facility.

General. Our new revolving credit facility provides for an original principal amount of up to $40.0 million under which revolving loans may be made and under which letters of credit, up to a sublimit of $30.0 million, may be issued. The facility will mature 91 days before the maturity date of the notes. In connection with the new revolving credit facility, we were required to amend our existing Swap Agreements to increase the effective rate of interest on our 8¾% senior notes from 9.765% to 9.889% and issue to one of the counterparties to the Swap Agreements, which is an affiliate of one of the agents under the new revolving credit facility, $1.0 million of mandatorily redeemable preferred stock. In addition, as required by the new revolving credit facility, a $7.5 million equity investment in us was made by certain of NACG Holdings Inc.’s existing common shareholders. See “Related Party Transactions—Terms of Senior Preferred Stock.”

Security. The credit facility is secured by a first priority lien on substantially all of our and our subsidiaries’ existing and after-acquired property (tangible and intangible), including, without limitation, all accounts receivable, inventory, equipment, intellectual property and other personal property, and all real property, whether owned or leased, and a pledge of our capital stock, including the preferred stock to be issued in connection with the transactions described herein, and the capital stock of our subsidiaries, subject to various exceptions.

Interest rates and fees. The facility bears interest at variable rates based on the Canadian prime rate plus 2.0% per annum, or the Canadian bankers’ acceptance rate plus 3.0% per annum. Interest is payable monthly in arrears and computed on the basis of a 365-day year. Letters of credit are subject to a 3.0% per annum fee and to a fronting fee equal to the greater of $500 or 0.25% per annum of the daily drawable amount paid quarterly in arrears. Commitment fees equal to 0.50% per annum multiplied by the daily average unused portion of the credit facility are computed on the basis of a 360-day year and payable quarterly in arrears.

Prepayments and commitment reductions. The credit facility may be prepaid in whole or in part without premium or penalty, except for bankers’ acceptances, which will not be prepayable prior to their maturity. However, the credit facility requires prepayments under various circumstances, such as: (i) 100% of the net cash proceeds of certain asset dispositions, subject to certain reinvestment rights, (ii) 100% of the net cash proceeds from our issuance of debt, other than the notes up to a maximum amount of US$60.5 million and certain other exceptions, (iii) 100% of the net cash proceeds from our issuance of equity, other than the issuance of preferred stock referred to above, and capital contributions to NACG Preferred Corp. in excess of a specified amount, (iv) 100% of all casualty and condemnation proceeds, subject to certain reinvestment rights, (v) 50% of excess cash flow (as defined in the credit agreement) for each fiscal year, and (vi) such amounts as may be necessary to ensure that the outstanding portion of the credit facility does not exceed the borrowing base, as defined below.

Borrowing Base. The borrowing base is defined in the credit agreement to mean: (A) the least of (i) 85% of the appraised net orderly liquidation value, as defined in the credit agreement, of our consolidated property, plant and equipment, (ii) 60% of the book value of our consolidated property, plant and equipment and (iii) $110.0 million, plus (B) 75% of the value of eligible accounts receivable, as defined in the credit agreement, less (C) any reserves established by the agent. As of the closing date, none of our current accounts receivable were eligible. The sum of borrowings and letters of credit under the credit facility, plus our mark-to-market liabilities under all secured swaps may not exceed the borrowing base. As of June 1, 2005, the borrowing base, as defined above, was approximately $78.0 million. As of June 1, 2005, the mark-to-market liabilities under existing secured swap agreements was approximately $41.4 million. As a result, the total amount of available borrowings under our new revolving credit facility was approximately $36.6 million as of such date. After taking into account $20.0 million of issued and outstanding letters of credit, the remaining amount of available borrowings as of that date was approximately $16.6 million.

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Covenants. The bank credit agreement contains restrictive covenants limiting our ability, and the ability of our subsidiaries to, subject to various exceptions:

• incur debt or enter into sale and leaseback transactions or contractual contingent obligations;

• prepay, purchase or otherwise acquire or retire prior to stated maturity the notes or certain other debt or amend the indentures;

• create or allow to exist liens or other encumbrances;

• transfer assets (including any class of stock or the voting rights of any of our subsidiaries) except for sales and other transfers of inventory or surplus, immaterial or obsolete assets in our ordinary course of business;

• enter into mergers, consolidations and asset dispositions of all or substantially all of our, or any of our subsidiaries’ properties;

• make investments, including acquisitions;

• enter into transactions with related parties other than in the ordinary course of business on an arm’s-length basis on terms no less favorable to us than those available from third parties;

• make any material change in the general nature of the business conducted by us; and

• pay dividends or redeem shares of capital stock.

Under the bank credit agreement, we are required to satisfy the following financial covenants:

• a minimum fixed charge coverage ratio of (a) 0.45 to 1.00 from April 1, 2005 through June 30, 2005, (b) 0.65 to 1.00 from April 1, 2005 through September 30, 2005, (c) 0.65 to 1.00 from April 1, 2005 through December 31, 2005, (d) 1.05 to 1.00 from April 1, 2005 through March 31, 2006, (e) 1.15 to 1.00 from July 1, 2005 through June 30, 2006, (f) 1.20 to 1.00 for any four-fiscal quarter period ending between July 1, 2006 and March 31, 2007, (g) 1.30 to 1.00 from July 1, 2006 through June 30, 2007, (h) 1.35 to 1.00 from October 1, 2006 through September 30, 2007, (i) 1.45 to 1.00 from January 1, 2007 through December 31, 2007, (j) 1.55 to 1.00 from April 1, 2007 through March 31, 2008, (k) 1.65 to 1.00 from July 1, 2007 through June 30, 2008, (l) 1.70 to 1.00 from October 1, 2007 through September 30, 2008, and (m) 1.80 to 1.00 for any four-fiscal quarter period ending between October 1, 2008 and maturity;

• a maximum leverage ratio of (a) 12.00 to 1.00 as of June 30, 2005, (b) 10.25 to 1.00 as of September 30, 2005, (c) 7.75 to 1.00 as of December 31, 2005, (d) 7.25 to 1.00 as of March 31, 2006, (e) 6.45 to 1.00 as of June 30, 2006, (f) 6.10 to 1.00 as of September 30, 2006, (g) 5.70 to 1.00 as of December 31, 2006, (h) 5.40 to 1.00 as of March 31, 2007, (g) 5.20 to 1.00 as of June 30, 2007, (h) 5.00 to 1.00 as of September 30, 2007, (i) 4.80 to 1.00 as of December 31, 2007, (j) 4.60 to 1.00 as of March 31, 2008, (k) 4.40 to 1.00 as of June 30, 2008, (l) 4.25 to 1.00 as of September 30, 2008, (m) 4.10 to 1.00 as of December 31, 2008, and (n) 4.00 to 1.00 on the last day of each fiscal quarter between January 1, 2009 and maturity; and

• a minimum consolidated EBITDA requirement of (a) $29.0 million for the four-fiscal quarter period ending June 30, 2005, (b) $34.0 million for the four-fiscal quarter period ending September 30, 2005, (c) $45.0 million for the four-fiscal quarter period ending December 31, 2005, (d) $48.0 million for the four-fiscal quarter period ending March 31, 2006, (e) $54.0 million for the four-fiscal quarter period ending June 30, 2006, (f) $57.0 million for the four-fiscal quarter period ending September 30, 2006, (g) $61.0 million for the four-fiscal quarter period ending December 31, 2006, (h) $64.0 million for the four-fiscal quarter period ending March 31, 2007, (i) $67.0 million for the four-fiscal quarter period ending June 30, 2007, (j) $70.0 million for the four-fiscal quarter period ending September 30, 2007, (k) $73.0 million for the four-fiscal quarter period ending December 31, 2007, (l) $76.0 million for the four-fiscal quarter period ending March 31, 2008, (m) $80.0 million for the four-fiscal quarter period ending June 30, 2008, (n) $83.0 million for

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the four-fiscal quarter period ending September 30, 2008, (o) $86.0 million for the four-fiscal quarter period ending December 31, 2008, and (p) $89.0 million for any four-fiscal quarter period ending between January 1, 2009 and maturity.

Events of default. The bank credit agreement contains customary events of default, including, without limitation, failure to make payments when due, defaults under other agreements or instruments of indebtedness, noncompliance with covenants, breaches of representations and warranties, bankruptcy, judgments in excess of specified amounts, invalidity of guaranties, impairment of security interest in collateral, and changes of control.

8¾% Senior Notes due 2011

General. On November 26, 2003, we issued an aggregate of US$200.0 million of 8¾% senior unsecured notes pursuant to an indenture among us, the subsidiary guarantors and Wells Fargo Bank, N.A., as trustee. These notes will mature on December 1, 2011. Interest on these notes accrues at 8¾% per annum and is payable on June 1 and December 1 of each year. All of our subsidiaries jointly and severally guarantee the 8¾% senior notes.

Redemption and Repurchase. We may redeem the 8¾% senior notes at any time on or after December 1, 2007, at specified redemption prices. We may also redeem the 8¾% senior notes in the event of certain equity sales and various changes affecting withholding taxes. We are not required to make mandatory redemption or sinking fund payments with respect to the 8¾% senior notes. We will be required to offer to repurchase the 8¾% senior notes from holders if we undergo a change of control or sell our assets in specified circumstances.

Covenants. The indenture governing the 8¾% senior notes restricts, among other things, our ability to pay dividends, redeem capital stock or prepay certain subordinated debt; incur additional debt or issue preferred stock; grant liens; merge, consolidate or transfer substantially all of our assets; enter into certain transactions with affiliates; impose restrictions on any subsidiary’s ability to pay dividends or transfer assets to us; enter into certain sale and leaseback transactions; and permit subsidiaries to guarantee debt.

Swap Agreements

We have entered into two separate International Swap Dealer Association—Master Agreements, one with BNP Paribas, as counterparty, dated November 23, 2003, and one with HSBC Bank Canada, as counterparty, dated March 26, 2004. These agreements are collectively referred to as the Swap Agreements. Pursuant to the Swap Agreements, we have and may enter into one or more interest rate or currency swap transactions governed by the terms of the Swap Agreements and the confirmations issued by the counterparty in respect of each transaction. The Swap Agreements contain customary representations and warranties, covenants and events of default. Specifically, each Swap Agreement contains a provision that an event of default under our existing credit agreement will constitute an event of default under such Swap Agreement and that the counterparty will be entitled to terminate the Swap Agreement if our payment obligations to the counterparty cease to be secured pari passu with the obligations under the credit agreement. As of June 1, 2005, the mark-to-market liability associated with the Swap Agreements was approximately $41.4 million.

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DESCRIPTION OF THE NOTES

The Company issued the original notes and will issue the exchange notes under an indenture among itself, the Guarantors and Wells Fargo Bank, N.A., as trustee. The following is a summary of the material provisions of the indenture. It does not include all of the provisions of the indenture. We urge you to read the indenture because it, and not this summary, defines your rights. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. A copy of the indenture is filed as an exhibit to the registration statement which includes this prospectus. You can find definitions of certain capitalized terms used in this description of the notes under “Certain Definitions.” For purposes of this section, references to the “Company” include only North American Energy Partners Inc. and not its Subsidiaries and, except as otherwise stated, all references to dollars are to Canadian dollars.

Brief Description of the Notes and the Guarantees

The Notes. The original notes and the exchange notes constitute, and any additional notes issued later will constitute, a single series of notes under the indenture. Unless the context otherwise requires, for purposes of this description of the notes, reference to the notes includes the original notes, the exchange notes and any additional notes issued later.

The notes:

• are senior secured obligations of the Company;

• are effectively subordinated in right of payment to all existing and future secured senior Indebtedness of the Company to the extent of the value of the collateral securing such Indebtedness;

• rank equally with all other existing and future unsecured and unsubordinated Indebtedness of the Company, but are effectively subordinated to any Indebtedness under the Senior Lien Agreements and are senior in right of payment to all Indebtedness that by its terms is subordinated to the notes;

• are secured by security interests in substantially all of the assets of the Company, subject to Permitted Liens (including the Liens of the Senior Lien Agent); and

• are unconditionally guaranteed by the Guarantors.

The Guarantees. The notes are jointly and severally guaranteed by all of our current and future Restricted Subsidiaries.

The guarantees of the notes:

• are senior secured obligations of each Guarantor;

• rank equally in right of payment with all other senior obligations of each Guarantor, but are effectively subordinated in right of payment to any Indebtedness under the Senior Lien Agreements;

• are senior in right of payment to all Indebtedness that by its terms is subordinated to the guarantee of each Guarantor; and

• are secured by security interests in substantially all of the assets of each Guarantor, subject to Permitted Liens (including the Liens of the Senior Lien Agent).

Principal, Maturity and Interest

The notes mature on June 1, 2010. Additional notes may be issued from time to time, subject to the limitations set forth under “Certain Covenants—Limitation on Incurrence of Additional Indebtedness.”

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Interest on the notes accrues at the rate of 9% and is payable semiannually in arrears in cash on each June 1 and December 1 of each year commencing on December 1, 2005, to the persons who are registered holders at the close of business on the May 15 and November 15 immediately preceding the applicable interest payment date. Interest on the notes accrues from the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance. Interest on the notes is computed on the basis of a 360-day year comprised of twelve 30-day months.

The original notes were, and the exchange notes will be, initially issued only in registered, book-entry form in denominations of US$1,000 and integral multiples of US$1,000. The global notes will be issued in denominations that together equal the total principal amount of the outstanding notes.

The trustee is initially acting as paying agent and registrar for the notes. The notes may be presented for registration of transfer and exchange at the offices of the registrar. The Company may change any paying agent and registrar without notice to holders of record of the notes, referred to in this section as “holders”, and the Company may act as paying agent or registrar. The Company will pay principal, and premium, if any, on the notes at the paying agent’s corporate office in New York, New York. At the Company’s option, interest and liquidated damages under the registration rights agreement, if any may be paid at the paying agent’s corporate trust office or by check mailed to the registered address of holders.

Collateral

Generally

Pursuant to the terms of the Collateral Agreements, the Company and its Restricted Subsidiaries granted to the trustee or one or more sub-collateral agents, security interests in, and pledges in favor of the trustee or one or more sub-collateral agents, of substantially all of their respective assets, including the Capital Stock of their respective Subsidiaries, subject to Permitted Liens. However, the Liens of the trustee on such assets are subordinate in priority to the Liens of the Senior Lienholders on such assets. The initial sub-collateral agent is Computershare Trust Company of Canada. For purposes of this section, references to the trustee as it relates to the collateral and the Collateral Agreements include Wells Fargo Bank, N.A. and/or the sub-collateral agent, as applicable.

Upon the occurrence of an Event of Default, the proceeds from the sale of collateral securing the notes, after payment of all secured Indebtedness having prior Liens, may be insufficient to satisfy the Company’s obligations under the notes and the Guarantors’ guarantees. In addition, the amount to be received upon such a sale would depend on numerous factors, such as the condition, age and useful life of the collateral at the time of sale, as well as the timing and manner of the sale. By its nature, all or some of the collateral will be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the collateral, if it can be sold, can be sold in a short period of time.

To the extent third parties hold Permitted Liens, such third parties may have rights and remedies with respect to the property subject to such liens that, if exercised, could adversely affect the value of the collateral or the trustee’s remedies in the property. Given the intangible nature of some of the collateral, any sale of such collateral separately from the Company as a whole may not be feasible. The ability of the Company and its Restricted Subsidiaries, other than its Immaterial Subsidiaries, to grant a security interest in certain collateral or perfect the same may be limited by legal or other logistical considerations. The ability of the holders of notes to realize upon the collateral may be subject to certain bankruptcy and insolvency laws and other limitations in the event of a bankruptcy or insolvency. See “Risk Factors—Risks Related to the Notes and Our Other Indebtedness—You may be unable to enforce your rights under U.S. bankruptcy law, and Canadian bankruptcy and insolvency laws may impair the indenture trustee’s ability to enforce remedies on your behalf.”

The Company and its Restricted Subsidiaries are permitted to form new Restricted Subsidiaries and to transfer all or a portion of the collateral to one or more of its Restricted Subsidiaries. Each such new Restricted Subsidiary that is not an Immaterial Subsidiary will be required to unconditionally guarantee the Notes and secure its guarantee by executing one or more Collateral Agreements granting to the trustee a security interest in substantially all of the assets of such Restricted Subsidiary on the same basis and subject to the same limitations as the Company’s

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currently existing Restricted Subsidiaries as described in the first paragraph of this section under “Collateral—Generally.”

In addition, subject to the restrictions on incurring secured Indebtedness as set forth herein under “Certain Covenants—Limitation on Incurrence of Additional Indebtedness” and “—Limitation on Liens”, the Company and its Restricted Subsidiaries will have the right to grant, and suffer to exist, Liens securing, among other Permitted Indebtedness and other obligations:

• certain Capitalized Lease Obligations and Purchase Money Indebtedness respecting fixed assets of the Company or such Restricted Subsidiaries and to acquire any such assets subject to such Liens; and

• obligations outstanding under the Credit Agreement and the Swap Agreements and secured by Liens on substantially all of the assets of the Company and such Restricted Subsidiaries.

The trustee’s Liens in such assets are intended to be, at all times automatically subordinate in priority to all such Liens and certain other Permitted Liens. In furtherance of the preceding, the Company, the Guarantors, the trustee, on behalf of itself and the holders of the notes, the senior lien agent, in such capacity, together with any successors thereto, the “Senior Lien Agent”, on behalf of itself and the other Senior Lienholders, entered into the Intercreditor Agreement. The Intercreditor Agreement contains the procedures for enforcing such Liens and the distribution of sale, insurance or other proceeds resulting from the collateral securing the Credit Agreement, the Swap Agreements and the indenture, notes and guarantees.

Other than during the continuance of an Event of Default, and subject to certain terms and conditions in the indenture and the Collateral Agreements, each of the Company and its Restricted Subsidiaries is entitled to receive all cash dividends, interest and other payments made upon or with respect to the equity interests of any of its Subsidiaries and to exercise any voting, consensual rights and other rights pertaining to such collateral. Upon the occurrence and during the continuance of an Event of Default, subject to the terms of the Intercreditor Agreement, upon notice from the trustee:

• all rights of the Company or such Restricted Subsidiary, as the case may be, to exercise such voting, consensual rights, or other rights shall cease and all such rights shall become vested in the trustee, which, to the extent permitted by law, shall have the sole right to exercise such voting, consensual rights or other rights;

• all rights of the Company or such Restricted Subsidiary, as the case may be, to receive all cash dividends, interest and other payments made upon or with respect to the collateral shall cease, and such cash dividends, interest and other payments shall be paid to the trustee; and

• the trustee may sell the collateral or any part thereof in accordance with, and subject to the terms of, the Collateral Agreements. Subject to the Intercreditor Agreement, all funds distributed under, and pursuant to, the Collateral Agreements and received by the trustee for the ratable benefit of the holders of the notes shall be distributed by the trustee in accordance with the provisions of the indenture.

The collateral release provisions of the indenture permit the release of collateral without substitution of collateral having at least equal value under certain circumstances, including asset sales made in compliance with the indenture.

Intercreditor Agreement

The Intercreditor Agreement contains the following provisions:

Ranking of Liens. The Intercreditor Agreement provides that:

• Liens on the assets of the Company and its Restricted Subsidiaries securing the indenture, notes and guarantees will be junior to the Liens securing all Senior Lien Obligations;

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• the Senior Lienholders will be entitled to receive proceeds from any such assets prior to the holders; and

• the trustee will not challenge the Liens of the Senior Lien Agent on any such assets and no Senior Lienholder will challenge the Liens of the trustee on any such assets, notwithstanding the timing, method or failure of the perfection thereof by such person.

Restriction on Enforcement of Liens and Related Provisions. The Intercreditor Agreement provides that neither the trustee nor any holder may take any enforcement action against any collateral until the Senior Lien Obligations are paid in full in cash, including the cash collateralization of 105% of the undrawn portion of the stated amount of any letters of credit issued thereunder that remain outstanding, and the commitments under the Credit Agreement have been terminated and the Swap Agreements have been terminated or have expired. The Senior Lienholders will have the sole and exclusive right to make all decisions with respect to the exercise of remedies with respect to any collateral during such time, including the timing and method of any disposition thereof and the terms of such disposition.

Upon the receipt of any proceeds of any collateral by the trustee prior to the payment in full in cash of the obligations under the Credit Agreement and the Swap Agreements, the termination of the commitments under the Credit Agreement and the termination or expiry of the Swap Agreements, the trustee shall hold such proceeds (after deducting from it all reasonable enforcement costs and reasonable trustee expenses in connection with the termination of the commitments) in trust for the account of the Senior Lienholders and remit such proceeds to the Senior Lien Agent for the account of itself and the other Senior Lienholders.

Insolvencies and Liquidation Events. The Intercreditor Agreement provides that in the event of an insolvency or liquidation event of the Company or any Restricted Subsidiary, rights of the trustee and the holders, as secured creditors, will be limited. The Intercreditor Agreement prohibits the trustee or any holder to contest any debtor-in-possession financing supported by the Senior Lienholders. As a result, the holders will be effectively subordinated not only to the Senior Lien Obligations but also to any such debtor-in-possession financing, which could be considerable in size.

The Intercreditor Agreement provides that where an Event of Default has occurred as a result of any demand for payment of any Senior Lien Obligations, or in the event of an insolvency or liquidation event of the Company or any Restricted Subsidiary, the trustee or any holder may also make demands, file the necessary notice(s) under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or any other applicable insolvency legislation, in respect of the indenture, notes and guarantees, and file a proof of claim in any insolvency, bankruptcy or restructuring proceeding of the Company or any Restricted Subsidiary or otherwise participate in the insolvency, bankruptcy or restructuring.

The trustee or any holder shall be entitled to exercise the voting rights attributable to the full amount of the indenture, the notes and the guarantees owed to the trustee or any holder, as the trustee or any holder may determine in their sole discretion and without liability to any Senior Lienholder, subject to certain restrictions in the Intercreditor Agreement. Such restrictions include that neither the trustee nor any holder shall vote in favor of any plan of reorganization unless such plan provides for the payment in full in cash of all of the Senior Lien Obligations or such plan is otherwise supported by the Senior Lienholders.

Release of Collateral upon Sale or Other Disposition. Upon the sale or disposition of any assets constituting collateral in connection with the enforcement by the Senior Lien Agent of its remedies after an Event of Default under any Senior Lien Agreement, then (whether or not any insolvency or liquidation proceeding is pending at the time), the Liens of the trustee upon such assets will be released and the trustee will promptly execute and deliver an instrument confirming such release on customary terms reasonably acceptable to the Senior Lien Agent provided that:

• such release shall not extend to or otherwise affect any of the rights of the trustee or the holders with respect to the proceeds from any such sale or other disposition of such assets;

• the Senior Lienholders shall promptly apply such proceeds to the Senior Lien Obligations; and

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• if any such sale or disposition results in a surplus after application of the proceeds to the Senior Lien Obligations, such surplus shall be paid to the trustee and the holders or as otherwise required by law.

Agent for Perfection. Each of the trustee and the Senior Lien Agent shall hold any Pledged Collateral in its possession or control, or in the possession or control of its agents or bailees, as agent for the others solely for the purpose of perfecting the security interest granted in such collateral pursuant to the security documents, subject to the terms and conditions of the Intercreditor Agreement. “Pledged Collateral” means any collateral with respect to which a secured creditor may perfect or enhance its perfection in the collateral by having possession or control in the collateral.

Pursuant to the Intercreditor Agreement:

• the trustee, on behalf of itself and the holders, will waive, to the fullest extent permitted by law, any claim against any Senior Lienholder in connection with any actions they may take in good faith under the Senior Lien Agreements or with respect to the collateral, and agree that no Senior Lienholder will have any duty to them in respect of the maintenance or preservation of any assets constituting collateral; and

• the Senior Lien Agent, on behalf of itself and the other Senior Lienholders, will waive, to the fullest extent permitted by law, any claim against the trustee or the holders in connection with any actions they may take in good faith under the indenture or with respect to the collateral not in violation of the terms of the Intercreditor Agreement, and agree that neither the trustee nor the holders will have any duties to them in respect of the maintenance or preservation of the collateral.

Option to Purchase Senior Lien Obligations. Upon the occurrence and during the continuance of (1) an acceleration of the obligations under the Credit Agreement or (2) the commencement of a bankruptcy or insolvency proceeding, in respect of any Senior Lien Obligations: any or all holders will have the right (without any obligation) to purchase at par, in the manner and during the period set forth in the Intercreditor Agreement, all, but not less than all, of the principal of and interest on all Indebtedness outstanding under the Credit Agreement and the Swap Agreements at the time of purchase and all other obligations then outstanding, together with all Liens and all guarantees and other supporting obligations relating to such obligations.

Guarantees

The Guarantors jointly and severally guarantee the Company’s obligations under the indenture and the notes on a senior secured basis. Each guarantee ranks equally in right of payment to all other existing and future unsubordinated Indebtedness of the Guarantor. The guarantee of each Guarantor is effectively subordinated to any Indebtedness under the Senior Lien Agreements and senior to all Indebtedness of such Guarantor that is expressly subordinated to such guarantee. The obligations of each Guarantor under its guarantee are limited as necessary, to prevent the guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law or otherwise as may be required to comply with financial assistance restrictions under applicable Canadian corporate laws. See “Risk Factors—Risks Related to the Notes and Our Other Indebtedness.”

Each Guarantor may amalgamate or consolidate with or merge into or sell its assets to the Company or another Guarantor that is a Wholly Owned Restricted Subsidiary of the Company without limitation, or amalgamate, consolidate, merge or sell its assets to other Persons upon the terms and conditions set forth in the indenture. See “Certain Covenants—Merger, Consolidation and Sale of Assets.” In the event all of the Capital Stock of a Guarantor is sold by the Company and the sale complies with the provisions set forth in “Certain Covenants—Limitation on Asset Sales,” the guarantee of such Guarantor and the Liens on its assets in favor of the trustee will be released will be released. In addition, if the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the provisions of the indenture, the guarantee of such Guarantor and the Liens on its assets in favor of the trustee will be released.

Separate financial statements of the Guarantors are not included here because such Guarantors are jointly and severally liable with respect to the Company’s obligations pursuant to the notes, and the aggregate net assets,

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earnings and equity of the Guarantors and the Company are substantially equivalent to the net assets, earnings and equity of the Company on a consolidated basis.

As of the date of the indenture, all of the Company’s Subsidiaries were Restricted Subsidiaries and none was an Immaterial Subsidiary.

Redemption

Optional Redemption. Except as described below, the notes are not redeemable before June 1, 2008. Thereafter, the Company may redeem the notes at its option, in whole or in part, upon not less than 30 nor more than 60 days’ notice, during any period set forth below at the redemption price (expressed as a percentage of the principal amount) set forth opposite such period:

Year	Percentage
On or after June 1, 2008 and prior to June 1, 2009	104.50	%
On or after June 1, 2009 and prior to June 1, 2010	102.25	%
On June 1, 2010	100.00	%

In addition, the Company must pay accrued and unpaid interest on the notes redeemed to the applicable redemption date.

Optional Redemption Upon Public Equity Offerings. At any time, or from time to time, on or before June 1, 2007 the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings, to redeem up to 35% of the principal amount of the notes at a redemption equal to 109.0% of the principal amount of the notes redeemedplus accrued and unpaid interest, if any, to the date of redemption; provided that:

• at least 65% of the principal amount of notes remains outstanding immediately after any such redemption; and

• the Company makes such redemption within 90 days after the closing of any such Public Equity Offering.

Selection and Notice of Redemption

If less than all of the notes, are to be redeemed at any time, selection of the notes for redemption will be made by the trustee either:

• in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed; or,

• on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate.

No notes of a principal amount of US$1,000 or less shall be redeemed in part. If a partial redemption is made with the proceeds of a Public Equity Offering, the trustee will select the notes to be redeemed only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to DTC procedures). Notice of redemption will be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. If any note is to be redeemed in part only, then the notice of redemption that relates to such note must state the portion of the principal amount to be redeemed. A new note in a principal amount equal to the unredeemed portion will be issued in the name of the holder upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption as long as the Company has deposited with the paying agent funds in satisfaction of the applicable redemption price.

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Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Company is not required to make any mandatory redemption or sinking fund payments with respect to the notes. However, under certain circumstances, the Company may be required to offer to purchase the notes as described under the captions “Change of Control” and “Certain Covenants—Limitation on Asset Sales.” The Company may at any time and from time to time purchase notes in the open market or otherwise.

Change of Control

If a Change of Control occurs, the Company will be required to offer to purchase all or a portion of each holder’s notes, at a purchase price in cash equal to 101% of the principal amount of notes repurchased plus accrued interest to the date of purchase.

Within 30 days following any Change of Control, the Company must send by first class mail a notice to each holder containing the terms of the Change of Control Offer. The notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 45 days from the date such notice is mailed, other than as may be required by law, referred to as the “Change of Control Payment Date.” holders electing to have a note purchased pursuant to a Change of Control Offer will be required to surrender the note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the note completed, to the paying agent at the address specified in the notice prior to the close of business on the third business day prior to the Change of Control Payment Date.

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

If a Change of Control Offer is made, we cannot assure you that the Company will have available funds sufficient to pay the Change of Control purchase price for all the notes that might be delivered by holders seeking to accept the Change of Control Offer. The Credit Agreement contains and future Indebtedness that we may incur may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such Indebtedness upon a Change of Control. Moreover, the exercise by the holders of their right to require us to repurchase the notes could cause a default under such Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on us. In addition, we cannot assure you that in the event of a Change of Control the Company will be able to obtain the consents necessary to consummate a Change of Control Offer from the lenders under agreements governing outstanding Indebtedness that may prohibit the offer. If the Company is required to purchase outstanding notes pursuant to a Change of Control Offer, the Company expects that it would seek third party financing to the extent it does not have available funds to meet its purchase obligations. There can be no assurance, however, that the Company would be able to obtain such financing. See “Risk Factors— Risks Related to the Notes and Our Other Indebtedness—We may be prevented from financing, or may not have the ability to raise funds necessary to finance, the change of control offer required by the indenture.”

Neither the board of directors of the Company nor the trustee may waive the covenant relating to the obligation to make a Change of Control Offer. Restrictions in the indenture on the ability of the Company and its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on its property, to make Restricted Payments and to make Asset Sales may make more difficult or discourage a takeover of the Company or NACG Holdings Inc., whether favored or opposed by management of the Company or NACG Holdings Inc. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the notes, and there can be no assurance that the Company or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of NACG Holdings Inc., the Company or any of its Subsidiaries by management. While such restrictions cover a wide variety of arrangements which have traditionally been used to effect highly leveraged transactions, the indenture may not afford the holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction.

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The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Company and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of the holder of notes to require the Company to repurchase the notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another person or group may be uncertain.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the “Change of Control” provisions of the indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the “Change of Control” provisions of the indenture by virtue of complying with such laws and regulations.

Redemption for Taxation Reasons

The Company may at any time, upon not less than 30 nor more than 60 days’ notice, redeem in whole but not in part the outstanding notes at a redemption price of 100% of the principal amount thereof plus accrued interest to the date of redemption if the Company has become or would become obligated to pay any Additional Amounts, as defined below, in respect of the notes or the guarantees as a result of:

• any change in or amendment to the laws, or regulations promulgated under such laws, of Canada, or any of its political subdivisions or taxing authorities, or

• any change in or amendment to any published administrative position regarding the application or interpretation of such laws or regulations,

which change or amendment is announced or is effective on or after the Issue Date and such obligation to pay Additional Amounts cannot be avoided by the Company or such Guarantor taking reasonable measures available to it. See “Additional Amounts.”

Additional Amounts

All payments made by the Company or any Guarantor under or with respect to the notes or the guarantees will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, interest, assessment or other governmental charge imposed or levied by or on behalf of the Government of Canada or any of its provinces or territories or by any of their taxing authorities or agencies referred to as “Taxes,” unless the Company or such Guarantor is required to withhold or deduct Taxes under Canadian law or by the interpretation or administration of Canadian law. If, after the Issue Date, the Company or any Guarantor is so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with the respect to the notes or the guarantees, the Company or the Guarantor, as the case may be, will pay as additional interest to each holder of notes that are outstanding on the date of the required payments, such additional amounts, referred to as “Additional Amounts” as may be necessary so that the net amount received by such holder, including the Additional Amounts, after such withholding or deduction will not be less than the amounts such holder would have received if such Taxes had not been withheld or deducted; provided that no Additional Amounts will be payable with respect to a payment made in respect of a beneficial owner of a note, an “Excluded Holder”:

• with which the Company or any Guarantor does not deal at arm’s length within the meaning of the Income Tax Act (Canada) at the time of making such payment;

• that is subject to such Taxes by reason of its being connected with Canada or any province or territory otherwise than by the mere holding of the notes or the receipt of payments thereunder;

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• that, despite being required by law, failed to comply with a timely request of the Company or the holder to provide information concerning such beneficial owner’s nationality, residence, entitlement to treaty benefits, identity or connection with Canada or any of its political subdivisions or authorities, if and to the extent that due and timely compliance with such request would have reduced or eliminated any Taxes as to which Additional Amounts would have otherwise been payable in respect of such beneficial owner but for this clause; provided, that no request will be considered timely if delivered less than 60 days prior to the date on which the Company was required to receive such information in order to reduce or eliminate such Taxes; or

• any combination of the above clauses.

The Company or any Guarantor will also:

• make such withholding or deduction; and

• remit the full amount deducted or withheld to the relevant authority in accordance with applicable law.

The Company will furnish, within 30 days after the date the payment of any Taxes is due pursuant to applicable law, to the holders of notes that are outstanding on the date of the required payment, copies of tax receipts, if any, evidencing such payment has been made by the Company or any Guarantor, as the case may be. The Company or the Guarantor that, as the case may be, will indemnify and hold harmless each holder of notes that are outstanding on the date of the required payment (other than an Excluded Holder) and upon written request reimburse each such holder for the amount of:

• any Taxes so levied or imposed and paid by such holder as a result of payments made under or with respect to the notes or the guarantee;

• any liability (including, without limitation, penalties, interest and expense) arising therefrom or with respect thereto;

• any expenses incurred by the holder in connection with the payment of any Taxes by such holder that were levied or imposed as a result of payments made under or with respect to the notes or the guarantee; and

• any Taxes imposed with respect to any reimbursement under any of the three preceding bullet points, but excluding any such Taxes on such holders’ net income.

At least 30 days prior to each date on which any payment under or with respect to the notes or the guarantees is due and payable, if the Company or any Guarantor becomes obligated to pay Additional Amounts with respect to such payment, the Company or such Guarantor, as applicable, will deliver to the trustee an officers’ certificate stating the fact that such Additional Amounts will be payable, the amount so payable and such other information as is necessary to enable the trustee to pay such Additional Amounts to the holders of the notes on the payment date. Whenever in the indenture there is mentioned, in any context:

• the payment of principal (and premium, if any);

• purchase prices in connection with a repurchase of notes;

• interest and liquidated damages to be paid on the notes as more fully described under “The Exchange Offer”; or

• any other amount payable on or with respect to any of the notes or the guarantees,

such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this section to the extent, that, in such context, Additional Amounts are, were or would be payable in respect thereof.

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Certain Covenants

Limitation on Incurrence of Additional Indebtedness. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness, other than Permitted Indebtedness unless:

• no Default or Event of Default shall occur as a consequence of the incurrence of any such Indebtedness, and

• the Company or any of its Restricted Subsidiaries that is or, upon such incurrence, becomes a Guarantor may incur Indebtedness (including, without limitation, Acquired Indebtedness) and any Restricted Subsidiary of the Company that is not or will not, upon such incurrence become a Guarantor may incur Acquired Indebtedness, in each case if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.

The preceding provisions do not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):

(1) Indebtedness under the notes and the related guarantees;

(2) Indebtedness incurred pursuant to (a) the term loan facilities of the Credit Agreement in an aggregate principal amount at any time outstanding not to exceed the excess of (i) the greater of (x) $50.0 million and (y) the Borrowing Base; minus (ii) the aggregate amount of permanent reductions to the revolving commitments resulting from the receipt of Net Cash Proceeds of Asset Sales as provided in the “Limitation on Asset Sales” covenant;

(3) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereon;

(4) Interest Swap Obligations of the Company or any Restricted Subsidiary of the Company covering Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that such Interest Swap Obligations are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on its outstanding Indebtedness to the extent the notional principal amount of such Interest Swap Obligation does not, at the time of the incurrence of such obligation, exceed the principal amount of the Indebtedness to which such Interest Swap Obligation relates;

(5) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Agreements;

(6) Indebtedness of a Restricted Subsidiary of the Company to the Company or to a Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement), in each case subject to no Lien held by a person other than the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clause (17), such Permitted Lien secures a Swap Agreement); provided that if as of any date any person other than the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement) owns or holds any such

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Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause (6) by the issuer of such Indebtedness in the amount of the Indebtedness no longer so held;

(7) Indebtedness of the Company to a Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement), in each case subject to no Lien other than a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement); provided that (a) any Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor is unsecured and subordinated, pursuant to a written agreement, to the Company’s obligations under the notes and (b) if as of any date any Person other than a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement) owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause (7) by the Company in the amount of the Indebtedness no longer so held;

(8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days of incurrence;

(9) Indebtedness of the Company or any of its Restricted Subsidiaries (including Indebtedness in respect of standby letters of credit) in respect of bid or performance bonds, completion guarantees, performance guarantees, workers’ compensation claims, surety or appeal bonds, and payment obligations in connection with self-insurance or similar obligations, in the ordinary course of business;

(10) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries incurred in the ordinary course of business not to exceed $20.0 million at any one time outstanding;

(11) Refinancing Indebtedness of Indebtedness incurred under clauses (1) and (3) above and this clause (11) and the first paragraph of this “Limitation on Incurrence of Additional Indebtedness” covenant;

(12) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under the indenture;

(13) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition; and

(14) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount (or the accreted value, if applicable) not to exceed $5.0 million at any one time outstanding.

For purposes of determining compliance with this “Limitation on Incurrence of Additional Indebtedness” covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (14) above or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such covenant, the Company will be permitted to classify (or later reclassify) such item of Indebtedness in any manner that complies with this covenant and such Indebtedness shall be treated as incurred only once. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of

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dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this “Limitation on Incurrence of Additional Indebtedness” covenant. Indebtedness under the Credit Agreement outstanding on the Issue Date will be deemed incurred for purposes of this covenant under clause (2).

Limitation on Layering. The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the notes or the guarantee of such Guarantor, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Company or such Guarantor, as the case may be.

Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment, unless, at the time of and after giving effect to such Restricted Payment:

(1) no Default or Event of Default shall have occurred and be continuing; and

(2) the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with the “Limitation on Incurrence of Additional Indebtedness” covenant; and

(3) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made after the Issue Date shall not exceed the sum of:

(a) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company for the period commencing with the first full fiscal quarter after the Issue Date to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available; plus

(b) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale after the Issue Date of Qualified Capital Stock of the Company or warrants, options or other rights to acquire Qualified Capital Stock of the Company (but excluding any debt security that is convertible into, or exchangeable for, Qualified Capital Stock) and 100% of the principal amount of any Indebtedness of the Company or any Restricted Subsidiary (other than Indebtedness that by its terms is subordinated to the notes) that has been converted into or exchanged for Qualified Capital Stock of the Company or NACG Holdings Inc., (other than to the extent of any Qualified Capital Stock issued to any Restricted Subsidiary of the Company); plus

(c) without duplication of any amounts included in clause (3)(b) above, 100% of the aggregate net cash proceeds of any equity contribution (or the fair market value of an equity contribution made in the form of Capital Stock of NACG Holdings Inc., so long as such Capital Stock is used as consideration paid in an Asset Acquisition or to repay Indebtedness) received by the Company from a holder of the Company’s Capital Stock after to the Issue Date (excluding, in the case of clauses (3)(b) and (c), any net cash proceeds from a Public Equity Offering to the extent used to redeem the notes in compliance with the provisions set forth under “Redemption—Optional Redemption Upon Public Equity Offerings”); plus

(d) without duplication, the sum of:

• the aggregate amount of the return to capital with respect to any Investment (other than a Permitted Investment) made after the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments;

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• the net cash proceeds received by the Company or any of its Restricted Subsidiaries from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company); and

• upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary;

provided, however, that the sum of clauses (1), (2) and (3) above shall not exceed the aggregate amount of all such Investments made after the Issue Date.

Notwithstanding the preceding and without duplication, the Company will not be permitted to include the first $7.5 million of aggregate cash proceeds received by the Company from the issuance and sale of the Sponsor Preferred Stock on or before or subsequent to the Issue Date that would otherwise be permitted to be included in clause (3)(b) above.

The preceding provisions do not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration of such dividend or distribution if the dividend or distribution would have been permitted on the date of declaration;

(2) the redemption, repurchase, or other acquisition or retirement for value of any shares of Capital Stock of the Company or NACG Holdings Inc., either

(a) solely in exchange for shares of Qualified Capital Stock of the Company or NACG Holdings Inc., or

(b) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or NACG Holdings Inc.;

(3) the defeasance, redemption, repurchase or other acquisition of any Indebtedness that by its terms is subordinated to the notes either

(a) solely in exchange for shares of Qualified Capital Stock of the Company,

(b) or through the application of net proceeds of

• a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or NACG Holdings Inc., or

• Refinancing Indebtedness, or

(c) with the substantially concurrent receipt of a cash capital contribution from a direct or indirect holder of the Company’s Capital Stock to defease, redeem, repurchase or otherwise acquire such Indebtedness;

(4) if no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, or other acquisition or retirement for value by the Company of Common Stock of the Company or NACG Holdings Inc., from current or former officers, directors and employees of the Company or any of its Subsidiaries at any time or from their authorized representatives upon the death, disability or termination of employment of such employees or termination of their seat on the board of the Company, in an aggregate amount not to exceed $2.0 million in any calendar year;

(5) the repurchase of Common Stock deemed to occur upon the exercise of stock options to the extent such Common Stock represents a portion of the exercise price of such stock options;

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(6) payments to NACG Preferred Corp. to pay its or NACG Holdings Inc.’s, operating and administrative expenses including, without limitation, directors fees, employee salaries and other compensation, legal, accounting and audit expenses, compliance expenses and similar Canadian compliance expenses and corporate franchise and other taxes, whether similar or dissimilar, in each case arising from NACG Preferred Corp.’s ownership of the Company, NACG Holdings Inc.’s ownership of NACG Preferred Corp. or the Company’s businesses of the type permitted by the covenant described under “—Conduct of Business,” in an amount not to exceed $1.0 million per fiscal year;

(7) if NACG Preferred Corp. files a consolidated or combined return on behalf of itself and the Company and/or any Restricted Subsidiary of the Company following an enabling change in the Income Tax Act (Canada), payments to NACG Preferred Corp. pursuant to any reasonable tax sharing agreement or arrangement but only to the extent that amounts payable from time to time by the Company under any such agreement do not exceed the corresponding tax payments that the Company would have been required to make to any relevant taxing authority had the Company not joined in such consolidated or combined return, but instead had filed returns including only the Company;

(8) payments by the Company in an amount not to exceed, in the aggregate, in any calendar year, the sum of $1.0 million to the Equity Investors pursuant to the Advisory Services Agreement for advisory services and transactions fees; and

(9) Restricted Payments not to exceed the sum of $8.5 million in the aggregate.

In determining the aggregate amount of Restricted Payments made after the Issue Date in accordance with clause (3) of the first paragraph of this covenant, amounts expended pursuant to clauses (1), (2)(b), (4), (7), (8) and (9) of the second paragraph of this covenant shall be included in such calculation. The amount of any non-cash Restricted Payment shall be its fair market value at the date of the making of such Restricted Payment.

Limitation on Asset Sales. The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1) the Company or the applicable Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of;

(2) at least 75% of the consideration received by the Company or the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash, Cash Equivalents and/or Replacement Assets, as defined below; provided that for purposes of the provision, each of the following will be deemed to be cash:

(a) the amount of any liabilities, as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet, of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the notes or any guarantee of a Guarantor) that are expressly assumed by the transferee of any such assets and as long as the documents governing such liabilities provide that there is no further recourse to the Company or any of its Subsidiaries with respect to such liabilities; and

(b) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted, by sale or other disposition, by the Company or such Restricted Subsidiary into cash or Cash Equivalents within 180 days of such Asset Sale, to the extent of the cash or Cash Equivalents received in that conversion; and

(3) the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 180 days of receipt of such proceeds either:

(a) to (i) permanently reduce the commitments under the Credit Agreement and to the extent that the aggregate amount of revolving loans and letters of credit exceed the amount of the commitments under the Credit Agreement as so reduced, repay such revolving loans and/or cash collateralize such letters of

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credit in an aggregate amount equal to such excess and/or (ii) permanently prepay the term loans or other non-revolving funded debt, if any, under the Credit Agreement;

(b) to make an investment in property, plant, equipment or other non-current assets that replace the properties and assets that were the subject of such Asset Sale or in property, plant, equipment or other non-current assets that will be used or useful in (or all of the Capital Stock of an entity that becomes a Wholly Owned Restricted Subsidiary and is engaged in) the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses that are the same, similar, ancillary or reasonably related thereto or are reasonable extensions thereof (Replacement Assets); and/or

(c) a combination of prepayment and investment permitted by the preceding clauses (3)(a) and (3)(b).

Pending the final application of such Net Cash Proceeds, the Company may temporarily reduce borrowings under the Credit Agreement or invest such Net Cash Proceeds in Cash Equivalents. On the 181st day after an Asset Sale or such earlier date, if any, as the board of directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) or (3)(c) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), any portion of the Net Cash Proceeds that have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) or (3)(c) of the preceding paragraph (each a “Net Proceeds Offer Amount”) shall be subsequently applied by the Company or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all holders and all holders of other Applicable Indebtedness (other than Indebtedness under the Credit Agreement) containing provisions similar to those set forth in this “Limitation on Asset Sales” covenant on a pro rata basis, the maximum principal amount of notes and such other Applicable Indebtedness that may be purchased with the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, including Additional Interest, if any, to the date of purchase. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the amount of cash received (other than such interest) shall constitute Net Cash Proceeds thereof shall be applied in accordance with this covenant.

The Company may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date, at which time the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this covenant.

If substantially all, but not all, of the property and assets of the Company and its Restricted Subsidiaries as an entirety is transferred to a Person in a transaction permitted under “Merger, Consolidation and Sale of Assets”, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.

Each notice of a Net Proceeds Offer will be mailed by first-class mail to the holders as shown on the register of holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the trustee, and shall comply with the procedures set forth in the indenture. Upon receiving notice of the Net Proceeds Offer, holders may elect to tender their notes in whole or in part in integral multiples of US$1,000 in exchange for cash. To the extent holders properly tender notes in an amount exceeding the Net Proceeds Offer Amount, the trustee will select the notes to be purchased on a pro rata basis. A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. If any Net Cash Proceeds remain after the consummation of any Net

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Proceeds Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by the indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash Proceeds will be reset at zero.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the “Asset Sale” provisions of the indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the “Asset Sale” provisions of the indenture by virtue of complying with such laws and regulations.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to:

(1) pay dividends or make any other distributions on or in respect of its Capital Stock;

(2) make loans or advances to the Company or any other Restricted Subsidiary or to pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary of the Company; or

(3) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, except in each case for such encumbrances or restrictions existing under or by reason of:

(a) applicable law, rule, regulation or order;

(b) the indenture, the notes, the guarantees and the Collateral Agreements;

(c) customary non-assignment provisions of any contract or of any lease governing a leasehold interest of, or any license held by, any Restricted Subsidiary of the Company;

(d) any instrument governing Capital Stock of a Person acquired by the Company or by any Restricted Subsidiary of the Company or governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;

(e) (i) the 8-3/4% Senior Notes Indenture or any other indenture governing debt securities that are permitted to be incurred under the indenture and are no more restrictive, taken as a whole, with respect to dividend and other payment restrictions affecting Restricted Subsidiaries than those contained in the 8-3/4% Senior Notes Indenture or (ii) any other agreement existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date;

(f) the Credit Agreement;

(g) restrictions on the transfer of assets subject to any Lien permitted under the indenture imposed by the holder of such Lien;

(h) restrictions imposed by any agreement to sell or dispose of assets or Capital Stock, which sale or disposition is permitted under the indenture, pending the closing of such sale or disposition;

(i) customary provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) or in licenses or leases or in asset or stock sale agreements or agreements similar to any of the preceding entered into in the ordinary course of business;

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(j) restrictions on net worth or on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business;

(k) mortgages, purchase money obligations for property acquired in the ordinary course of business or Capitalized Lease Obligations that impose restrictions of the nature described in clause (3) of the preceding paragraph on the property acquired with such Indebtedness; and

(l) an agreement amending, supplementing, modifying, restating, renewing, replacing, substituting, refinancing, increasing, refunding, extending, deferring or restructuring an agreement referred to in clauses (b), (d), (e) and (g) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such agreement are no less favorable to the Company in any material respect as determined by the board of directors of the Company in its reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clauses (b), (d), (e) and (g).

Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries. The Company will not permit or cause any of its Restricted Subsidiaries that are not Guarantors to issue or sell any Capital Stock, other than to the Company or to a Wholly Owned Restricted Subsidiary of the Company, or permit any Person, other than the Company or a Wholly Owned Restricted Subsidiary of the Company, to own or hold any Capital Stock of any Restricted Subsidiary of the Company or any Lien or security interest therein (other than as required by applicable law or any Permitted Lien); provided, however, that this provision shall not prohibit:

• any issuance or sale if, immediately after giving effect thereto, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under the “Limitation on Restricted Payments” covenant if made on the date of such issuance or sale or

• the sale of all of the Capital Stock of a Restricted Subsidiary in compliance with the provisions of the “Limitation on Asset Sales” covenant.

Limitation on Liens. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind, other than Permitted Liens, against or upon any property or assets of the Company or any of its Restricted Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom, other than in respect of Permitted Liens.

Merger, Consolidation and Sale of Assets. The Company will not, in a single transaction or series of related transactions, amalgamate, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company’s assets (determined on a consolidated basis for the Company and the Company’s Restricted Subsidiaries) to any Person unless:

(1) either:

(a) the Company shall be the surviving or continuing corporation; or

(b) the Person (if other than the Company) formed by such amalgamation or consolidation or into which the Company is merged or the Person that acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company’s Restricted Subsidiaries substantially as an entirety referred to as the “Surviving Entity”:

(x) shall be a corporation organized and validly existing under the laws of Canada or any province or territory thereof, the United States or any State thereof or the District of Columbia; and

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(y) shall expressly assume, (i) by supplemental indenture (in form and substance reasonably satisfactory to the trustee), executed and delivered to the trustee, the due and punctual payment of the principal of, and premium, if any, and interest (including Additional Interest, if any) on all of the notes and the performance of every covenant of the notes, the indenture and the Registration Rights Agreement on the part of the Company to be performed or observed thereunder including, without limitation, the Company’s obligation to pay any Additional Amounts and (ii) by amendment, supplement or other instrument, in form and substance reasonably satisfactory to the truste), executed and delivered to the trustee, all obligations of the Company under the Collateral Agreements, and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Agreements on the collateral owned by or transferred to the Surviving Entity;

(2) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall

(a) have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction, after excluding the effect of reasonable expenses incurred or anticipated to be incurred in connection with such transaction, and

(b) be able to incur at least $1.00 of additional Indebtedness, other than Permitted Indebtedness, pursuant to the “Limitation on Incurrence of Additional Indebtedness” covenant;

(3) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and

(4) the Company or the Surviving Entity shall have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that such amalgamation, consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with the applicable provisions of the indenture and that all conditions precedent in the indenture relating to such transaction have been satisfied.

For purposes of the preceding, the transfer, by lease, assignment, sale or otherwise, in a single transaction or series of related transactions, of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

Upon any amalgamation, consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with the preceding in which the Company is not the surviving or continuing corporation, the successor Person formed by such amalgamation or consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the indenture and the notes with the same effect as if such surviving entity had been named as such.

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Each Guarantor (other than any Guarantor whose guarantee is to be released in accordance with the terms of the guarantee and the indenture in connection with any transaction complying with the provisions of this covenant and the “Limitation on Asset Sales” covenant) will not, and the Company will not cause or permit any Guarantor to, amalgamate or consolidate with or merge with or into any Person other than the Company or any other Guarantor unless:

(1) the entity formed by or surviving any such amalgamation, consolidation or merger, if other than the Guarantor, or to which such sale, lease, conveyance or other disposition shall have been made is a corporation organized and existing under the laws of Canada, any province or territory thereof, the United States or any State thereof or the District of Columbia;

(2) such entity assumes (a) by supplemental indenture (in form and substance reasonably satisfactory to the trustee), executed and delivered to the trustee, all of the obligations of the Guarantor on the guarantee and the performance of every covenant of the guarantee, the indenture and the Registration Rights Agreement on the part of the Guarantor to be performed or observed under the indenture and the Registration Rughts Agreement and (ii) by amendment, supplement or other instrument (in form and substance reasonably satisfactory to the trustee), executed and delivered to the trustee, all obligations of the Guarantor under the Collateral Agreements, and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Agreements on the collateral owned by or transferred to the Surviving Entity;

(3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(4) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, the Company could satisfy the provisions of clause (2) of the first paragraph of this covenant.

Any amalgamation, merger or consolidation of a Guarantor with and into the Company (with, in the case of a merger or consolidation, the Company being the surviving entity) or another Guarantor that is a Wholly Owned Restricted Subsidiary of the Company need only comply with clause (4) of the first paragraph of this covenant.

Limitations on Sale and Leaseback Transactions. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

• the Company or such Restricted Subsidiary could have (a) incurred the Indebtedness attributable to such Sale and Leaseback Transaction pursuant to the covenant described under “—Limitation on Incurrence of Additional Indebtedness” and (b) granted a Lien to secure such Indebtedness pursuant to the covenant described under “—Limitation on Liens”;

• the consideration received in connection with such Sale and Leaseback Transaction is at least equal to the fair market value of the asset that is the subject of such Sale and Leaseback Transaction; and

• the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Company or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, the covenant described under “—Limitation on Asset Sales.”

Limitations on Transactions with Affiliates.

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each, an “Affiliate Transaction”), other than (x) Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate Transactions on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a person that is not an Affiliate of the Company or such Restricted Subsidiary.

All Affiliate Transactions (and each series of related Affiliate Transactions that are part of a common plan) involving aggregate payments or other property with a fair market value in excess of $5.0 million shall be

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approved by a majority of members of the board of directors of the Company or such Restricted Subsidiary (including a majority of the disinterested members thereof), as the case may be, such approval to be evidenced by a board resolution stating that such board of directors has determined that such transaction complies with the foregoing provisions. If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions as part of a common plan) that involves an aggregate fair market value of more than $10.0 million, the Company or such Restricted Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an independent financial advisor.

(b) The following items will not be deemed to be Affiliate Transactions, and therefore will not be subject to the restrictions set forth in paragraph (a) of this covenant:

(1) reasonable and customary directors’ fees, indemnification and similar arrangements, employees’ salaries, bonuses or employment agreements, compensation or employee benefit arrangements and incentive arrangements with any officer, director or employee of the Company or any Restricted Subsidiary entered into in the ordinary course of business and payments under any indemnification arrangements permitted by applicable law, as determined in good faith by the Company’s board of directors;

(2) transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries; provided that such transactions are not otherwise prohibited by the indenture;

(3) any agreement as in effect as of the Issue Date or any amendment, supplement, modification, restatement, renewal, replacement, refinancing, increase, refunding, extension, substitution or restructuring of or to such agreement or any transaction contemplated by any of the preceding, so long as any such amendment, supplement, modification, restatement, renewal, replacement, refinancing, increase, refunding, extension, substitution or restructuring is not more disadvantageous to the holders in any material respect than the original agreement as in effect on the Issue Date;

(4) payments to permit payments for NACG Preferred Corp. or NACG Holdings Inc., employees and officers and directors similar to those provided in clause (1) above and payments by the Company in an amount not to exceed, in the aggregate, in any calendar year the sum of $1.0 million to the Equity Investors pursuant to the Advisory Services Agreement for advisory services and transactions fees;

(5) loans or advances to directors, officers or employees in the ordinary course of business in an amount not to exceed $1.0 million per fiscal year;

(6) Restricted Payments, Permitted Investments described in clause (6), (11), (12), (13) or (16) of the definition of Permitted Investments and intercompany Indebtedness described in clause (6) or (7) of the definition of the term “Permitted Indebtedness”;

(7) any transaction with an Affiliate where the only consideration paid by the Company or any Restricted Subsidiary is Qualified Capital Stock of the Company or NACG Holdings Inc.;

(8) sales of Capital Stock (other than Disqualified Capital Stock) of the Company or any such Capital Stock of NACG Holdings Inc., that has been contributed to the Company, in each case, to Affiliates of the Company; and

(9) if NACG Preferred Corp. files a consolidated or combined return on behalf of itself and the Company and/or any Restricted Subsidiary of the Company following an enabling change in the Income Tax Act (Canada), payments to or other transactions with NACG Preferred Corp. pursuant to any tax sharing agreement approved by the board of directors of the Company or the relevant Restricted Subsidiary between the Company (or any Restricted Subsidiary) and any other Person with which the Company

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(or Restricted Subsidiary) files a consolidated tax return or with which the Company (or Restricted Subsidiary) is part of a consolidated group for tax purposes, but only to the extent that amounts payable from time to time by the Company under any such agreement do not exceed the corresponding tax payments that the Company would have been required to make to any relevant taxing authority had the Company not joined in such consolidated or combined return, but instead had filed returns including only the Company.

Limitation on Designation of Unrestricted Subsidiaries. The Company may designate any Subsidiary of the Company as an “Unrestricted Subsidiary” only if:

• no Default shall have occurred and be continuing at the time of or after giving effect to such Designation;

• the Company would be permitted to make, at the time of such designation, an Investment pursuant to the first paragraph of “—Limitation on Restricted Payments” above in an amount (the “Designation Amount”) equal to the fair market value of the Company’s proportionate interest in such Subsidiary on such date; and

• such Subsidiary does not own any Capital Stock of, or own or hold any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated.

No Subsidiary shall be designated as an “Unrestricted Subsidiary” unless such Subsidiary:

• has no Indebtedness other than Non-Recourse Debt;

• is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to the Company or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates; and

• is a Person with respect to which neither the Company nor any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Capital Stock or (b) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results.

If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such date and, if the Indebtedness is not permitted to be incurred under the covenant described under “—Limitation on Incurrence of Additional Indebtedness” or the Lien is not permitted under the covenant described under “—Limitation on Liens,” the Company shall be in default of the applicable covenant.

The Company may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary only if:

• no Default shall have occurred and be continuing at the time of and after giving effect to such redesignation; and

• all Liens or Indebtedness of such Unrestricted Subsidiary outstanding immediately following such redesignation would, if incurred or made at such time, be permitted to be incurred or made under the indenture.

All designations and redesignations of Subsidiaries must be evidenced by a resolution of the Company’s board of directors certifying compliance with the preceding provisions.

On the Issue Date, all of the Company’s Subsidiaries were Restricted Subsidiaries.

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Additional Subsidiary Guarantees. If (x) the Company or any of its Restricted Subsidiaries shall organize, acquire or otherwise invest in another Restricted Subsidiary (other than an Immaterial Subsidiary) or (y) any Restricted Subsidiary of the Company that was an Immaterial Subsidiary no longer satisfies the definition thereof, then

(1) in the case of the occurrence of any event described in clause (x) above, the Company and each applicable Restricted Subsidiary of the Company shall (a) execute and deliver to the trustee such amendments to the Collateral Agreements as may be necessary or as the trustee reasonably determines to be advisable to grant to the trustee, for the benefit of itself and the holders, a perfected security interest in the Capital Stock of such new Restricted Subsidiary and any debt securities of such new Restricted Subsidiary held by the Company or any of its Restricted Subsidiaries, subject to the Permitted Liens, which are owned by the Company or such Restricted Subsidiary and required to be pledged pursuant to the Collateral Agreements, (b) subject to the Intercreditor Agreement, deliver to the trustee any certificates representing such Capital Stock and debt securities, together with (i) in the case of such Capital Stock, undated stock powers or instruments of transfer, as applicable, endorsed in blank, and (ii) in the case of such debt securities, endorsed in blank, in each case executed and delivered by an Officer of the Company or such Restricted Subsidiary, as the case may be; and

(2) in the case of the occurrence of any event described in clause (x) or (y) above, such other Restricted Subsidiary shall:

(a) execute and deliver to the trustee a supplemental indenture in form reasonably satisfactory to the trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee on a senior secured basis all of the Company’s obligations under the notes and the indenture on the terms set forth in the indenture;

(b) take such actions as may be necessary or as the trustee reasonably determines to be advisable to grant to the trustee, for the benefit of itself and the holders, a perfected security interest in the assets of such other Restricted Subsidiary, subject to the Permitted Liens and the Intercreditor Agreement, including the filing of Personal Property Security Act financing statements and any other applicable Personal property security filings or registrations in such jurisdictions as may be required by the Collateral Agreements or by law or as may be reasonably requested by the trustee;

(c) take such further action and execute and deliver such other documents specified in the indenture, the Collateral Agreements or otherwise reasonably requested by the trustee to effectuate the foregoing; and

(d) deliver to the trustee an opinion of counsel to the effect that such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Restricted Subsidiary and constitute legal, valid, binding and enforceable obligations of such Restricted Subsidiary and such other opinions regarding the perfection of such Liens in the assets, Capital Stock and debt securities of such Restricted Subsidiary, subject to customary exceptions.

Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of the indenture.

Impairment of Security Interest. Subject to the Intercreditor Agreement, neither the Company nor any of its Restricted Subsidiaries will take or omit to take any action which would adversely affect or impair in any material respect the Liens in favor of the trustee with respect to the collateral. Neither the Company nor any of its Restricted Subsidiaries shall grant to any Person, other than the trustee, or permit any Person, other than the trustee, to retain any interest whatsoever in the collateral other than holders of Permitted Liens. Neither the Company nor any of its Restricted Subsidiaries will enter into any agreement that requires the proceeds received from any sale of collateral to be applied to repay, redeem, defease or otherwise acquire or retire any Indebtedness of any Person, other than as permitted by the indenture, the notes, the Intercreditor Agreement and the Collateral Agreements. The Company shall, and shall cause each Restricted Subsidiary to, at its sole cost and expense, execute and deliver all such agreements and instruments as the trustee shall reasonably request to more fully or accurately describe the property intended to be collateral or the obligations intended to be secured by the Collateral Agreements. The Company shall, and shall cause each Restricted Subsidiary to, at their sole cost and expense, file or register any such notice

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filings or other agreements or instruments as may be necessary or desirable under applicable law to perfect the Liens created by the Collateral Agreements at such times and at such places as the trustee may reasonably request.

Real Estate Mortgages and Filings. With respect to any fee interest in any real property, referred to individually and collectively as the “Premises”, (a) owned by the Company or a Restricted Subsidiary on the Issue Date or (b) acquired by the Company or a Restricted Subsidiary after the Issue Date, with (i) a purchase price or (ii) as of the Issue Date, a fair market value, of greater than $500,000, on the Issue Date in the case of clause (a) and within 90 days of the acquisition thereof in the case of clause (b):

• the Company shall deliver to the trustee, as mortgagee, fully executed counterparts of a Debenture, or an amendment to an existing Debenture, if applicable, or, if requested by the trustee, separate Mortgages, duly executed by the Company or such Restricted Subsidiary, together with evidence of the completion, or satisfactory arrangements for the completion, of all recordings and filings of such Debenture, amendment or Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the properties purported to be covered thereby;

• the Company shall deliver to the trustee a customary title opinion in respect of the covered Premises in favor of the trustee from legal counsel and in form and substance reasonably satisfactory to the trustee; and

• the Company shall deliver to the trustee, with respect to each of the covered Premises, the most recent survey of such Premises, together with either (i) an updated survey certification in favor of the trustee from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit from an officer of the Company or such Restricted Subsidiary stating that there has been no change to the facts depicted in the survey.

Leasehold Mortgages and Filings. The Company and each of its Restricted Subsidiaries shall use its reasonable efforts to deliver a Debenture, or an amendment to an existing Debenture, if applicable, or, if requested by the trustee, separate Mortgages with respect to the Company’s or any such Restricted Subsidiaries’ leasehold interests in the premises, the “Leased Premises”, occupied by the Company or such Restricted Subsidiary pursuant to leases, collectively, the “Leases,” and individually, a “Lease”, together with evidence of registration of such Debenture, amendment or Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the properties purported to be covered thereby.

(i) Prior to the effective date of any Lease to be entered into following the Issue Date and (ii) within 90 days of the Issue Date with respect to any Lease outstanding on the Issue Date, the Company and such Restricted Subsidiaries shall use its reasonable efforts to provide to the trustee all of the items described in clauses (2) and (3) of “—Real Estate Mortgages and Filings” above with respect to the leasehold interest and in addition shall use their respective reasonable commercial efforts to obtain an agreement executed by the lessor under the Lease, whereby the lessor consents to the Debenture, amendment to the Debenture or Mortgage, as the case may be, and agrees to provide notice of default to the trustee and an opportunity for trustee to cure such default and such other customary terms as the trustee may reasonably request (whether granted by the instrument creating the leasehold estate or by applicable law), if any, and which shall be entered into by the trustee.

Landlord, Bailee and Consignee Waivers. Each of the Company and each of its Restricted Subsidiaries that is a lessee of, or becomes a lessee of, real property on or in which it will maintain, store, hold or locate all or any of its assets having an aggregate fair market value of at least $50,000, is, and will be, required to use its reasonable best efforts to deliver to the trustee a landlord waiver, substantially in the form of the exhibit form thereof to be attached to the indenture, executed by the lessor of such real property; provided that in the case where such lease is a lease in existence on the Issue Date or the lessee thereof that is a Restricted Subsidiary of the Company was not a Restricted Subsidiary of the Company on the Issue Date, the Company or such Restricted Subsidiary that is the lessee thereunder shall have 90 days from the Issue Date or the date it became a Restricted Subsidiary after the Issue Date, as the case may be, to satisfy, on a reasonable best efforts basis, such requirement; provided further, that no such waiver need be obtained with respect to any leased real property, if such leased real property is the subject of a Mortgage that has been delivered pursuant to the “Leasehold Mortgages and Filings” covenant. Each of the

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Company and each of its Restricted Subsidiaries that provides any of its assets having an aggregate fair market value of at least $50,000 to a bailee or consignee agrees to be bound by the terms of the immediately preceding sentence (other than the second proviso thereto), mutatis mutandis; provided, that (i) the terms “landlord”, “lessee” and “lease” shall be replaced, respectively, with the terms “bailee” or “consignee”, as applicable, “bailor” or “consignor”, as applicable, and the “applicable agreement” and (ii) the condition that the lessee maintain, store, hold or locate all or any of its assets having an aggregate fair market value of at least $50,000 shall instead be replaced with the condition that the fair market value of the assets subject to the applicable bailment or consignment have a fair market value of at least $50,000. In addition, each of the Company and each such Restricted Subsidiary shall, to the extent it delivers a landlord, bailee or consignee waiver to any Senior Lienholder and has not already delivered such a waiver mutatis mutandis under this covenant, concurrently with such delivery, deliver a comparable waiver from the applicable landlord, bailee or consignee to the trustee.

Conduct of Business. The Company and its Restricted Subsidiaries will not engage in any businesses that are not the same, similar, ancillary or reasonably related to, or reasonable extensions of, as determined in good faith by the board of directors of the Company, businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date.

Payments for Consent. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture, the notes, any Collateral Agreement, the Registration Rights Agreement or the Intercreditor Agreement unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports to Holders. For so long as any notes remain outstanding, the Company will furnish to the holders of the notes the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Whether or not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, the Company shall file with the Securities and Exchange Commission and furnish to the holders of the notes and the trustee, within the time periods required for filing such forms and reports as specified in the Securities and Exchange Commission’s rules and regulations:

• annual reports on Form 40-F or Form 20-F, as applicable, or any successor form, and

• quarterly reports on Form 10-Q or Form 6-K, as applicable, or any successor form,

which, regardless of applicable requirements, shall contain, at a minimum, (i) a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries, (ii) the financial statements required by the Commission’s Regulation S-X, including without limitation, Rule 3-10 thereunder, (iii) with respect to the annual financial statements only, a report thereon by the Company’s independent chartered accountants, and (iv) a reconciliation to U.S. GAAP as permitted by the Commission for foreign private issuers.

In addition, following the consummation of the Exchange Offer, whether or not required by the rules and regulations of the Securities and Exchange Commission, the Company will file a copy of all such information and reports with the Securities and Exchange Commission for public availability within the time periods specified in the Securities and Exchange Commission’s rules and regulations; provided, however, that the Company shall not be obligated to file such reports with the Securities and Exchange Commission if it does not permit such filings.

Events of Default

The following events are defined in the indenture as “Events of Default”:

(1) the failure to pay interest, including Additional Interest, on any notes when the same becomes due and payable and the default continues for a period of 30 days;

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(2) the failure to pay the principal of or premium, if any, on any notes, when such principal or premium becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);

(3) failure to make a Change of Control Offer as described under “Change of Control,” failure to make a Net Proceeds Offer as described under “Certain Covenants—Limitation on Asset Sales,” or a default in the observance or performance of the covenants described under “Certain Covenants—Limitation on Restricted Payments” or “—Limitation on Incurrence of Additional Indebtedness” or “—Merger, Consolidation and Sale of Assets,” which failure or default continues for a period of 30 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the trustee or the holders of at least 25% of the outstanding principal amount of the notes (except with respect to the “Merger, Consolidation and Sale of Assets” covenant, which will constitute an Event of Default with such notice requirement but without such passage of time requirement);

(4) the failure to comply with any other covenant or agreement contained in the indenture or any Collateral Agreement which default continues for a period of 45 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the trustee or the holders of at least 25% of the outstanding principal amount of the notes;

(5) the failure to pay at final maturity (giving effect to any applicable grace periods and any extensions thereof) the stated principal amount of any Indebtedness of the Company or any Restricted Subsidiary of the Company, or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at final stated maturity or which has been accelerated, in each case with respect to which the 20-day period described above has elapsed, aggregates $10.0 million or more at any time;

(6) one or more judgments in an aggregate amount in excess of $10.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged coverage in writing) shall have been rendered against the Company or any of its Restricted Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable;

(7) certain events of bankruptcy affecting the Company or any of its Significant Subsidiaries described in the indenture;

(8) any guarantee of a Significant Subsidiary ceases to be in full force and effect or any guarantee of a Significant Subsidiary is declared to be null and void and unenforceable or any guarantee of a Significant Subsidiary is found to be invalid or any Guarantor that is a Significant Subsidiary denies its liability under its guarantee (other than by reason of termination of the indenture or release of a Guarantor from its guarantee in accordance with the terms of the indenture);

(9) any Collateral Agreement at any time for any reason shall cease to be in full force and effect in all material respects, or ceases to give the trustee the Liens, rights, powers and privileges purported to be created thereby, superior to and prior to the rights of all third Persons other than the holders of Permitted Liens and subject to no other Liens except as expressly permitted by the applicable Collateral Agreement; or

(10) the Company or any of the Guarantors, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of any Collateral Agreement.

If an Event of Default (other than an Event of Default specified in clause (7) above with respect to the Company) shall occur and be continuing, the trustee or the holders of at least 25% in principal amount of outstanding notes may declare the principal of and premium, if any and accrued interest, including Additional Interest, if any, on all the notes to be due and payable by notice in writing to the Company and the trustee specifying

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the respective Event of Default and that it is a “notice of acceleration” (the “Acceleration Notice”), and the same shall become immediately due and payable.

If an Event of Default specified in clause (7) above with respect to the Company occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest, including Additional Interest, if any, on all of the outstanding notes shall automatically become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder.

At any time after a declaration of acceleration with respect to the notes as described in the preceding paragraphs, the holders of a majority in principal amount of the notes may rescind and cancel such declaration and its consequences:

• if the rescission would not conflict with any judgment or decree;

• if all existing Events of Default have been cured or waived except nonpayment of principal, premium, if any, or interest, including Additional Interest, if any, that has become due solely because of the acceleration;

• to the extent the payment of such interest is lawful, interest on overdue installments of interest, including Additional Interest, if any, and overdue principal and premium, if any, which has become due otherwise than by such declaration of acceleration, has been paid;

• if the Company has paid the trustee its reasonable compensation and reimbursed the trustee for its reasonable expenses, disbursements and its advances; and

• in the event of the cure or waiver of an Event of Default of the type described in clause (7) of the description above of Events of Default, the trustee shall have received an officers’ certificate and an opinion of counsel that such Event of Default has been cured or waived.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

The holders of a majority in principal amount of the notes may waive any existing Default or Event of Default under the indenture, and its consequences, except a default in the payment of the principal of or premium, if any, or interest, including Additional Interest, if any, on any notes.

Holders of the notes may not enforce the indenture, the Collateral Agreements, the Intercreditor Agreement or the notes except as provided in the indenture, under the Trust Indenture Act and in the Intercreditor Agreement. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is under no obligation to exercise any of its rights or powers under the indenture or any Collateral Agreement at the request, order or direction of any of the holders, unless such holders have offered to the trustee reasonable indemnity. Subject to all provisions of the indenture, the Intercreditor Agreement and applicable law, the holders of a majority in aggregate principal amount of the then outstanding notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.

The Company is required to provide an officers’ certificate to the trustee promptly upon any such officer obtaining knowledge of any Default or Event of Default (provided that such officers shall provide such certification at least annually whether or not they know of any Default or Event of Default) that has occurred and, if applicable, describe such Default or Event of Default and the status thereof. If a Default occurs and is continuing and is known to the trustee, the trustee must mail to each holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any note, including payments pursuant to the redemption provisions of such note, the trustee may withhold notice if and so long as it determines in good faith that withholding notice is in the interests of the holders.

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No Personal Liability of Directors, Officers, Employees, Incorporators and Stockholders

No directors, officers, employees, incorporators or stockholders of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the notes or the indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have its obligations and the obligations of the Guarantors discharged with respect to the outstanding notes, referred to as “Legal Defeasance”. Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding notes, except for:

• the rights of holders to receive payments in respect of the principal of, premium, if any, and interest, including Additional Interest, if any, on the notes when such payments are due;

• the Company’s obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payments;

• the rights, powers, trusts, duties and immunities of the trustee and the Company’s obligations in connection therewith; and

• the Legal Defeasance provisions of the indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the indenture, referred to as “Covenant Defeasance” and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under “Events of Default” will no longer constitute an Event of Default with respect to the notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the trustee, in trust, for the benefit of the holders cash in U.S. dollars, non-callable U.S. government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest, including Additional Interest, if any, on the notes on the stated date for payment thereof or on the applicable redemption date, as the case may be;

(2) in the case of Legal Defeasance, the Company shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that:

(a) the Company has received from, or there has been published by, the Internal Revenue Service or the Canada Revenue Agency, as the case may be, a ruling; or

(b) since the date of the indenture, there has been a change in the applicable Canadian or U.S. federal income tax law,

in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders will not recognize income, gain or loss for Canadian or U.S. federal income tax purposes or become subject to Canadian non-resident withholding tax as a result of such Legal Defeasance and will be subject to Canadian or U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

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(3) in the case of Covenant Defeasance, the Company shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders will not recognize income, gain or loss for Canadian or U.S. federal income tax purposes or become subject to Canadian non-resident withholding tax as a result of such Covenant Defeasance and will be subject to Canadian or U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or insofar as Defaults or Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the indenture (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(6) the Company shall have delivered to the trustee an officers’ certificate stating that the deposit was not made by the Company with the intent of preferring the holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;

(7) the Company shall have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and

(8) the Company shall have delivered to the trustee an opinion of counsel to the effect that assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the date of deposit, after the 91st day following the date of deposit, the funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally.

Notwithstanding the preceding, the opinion of counsel required by clause (2) above with respect to a Legal Defeasance need not be delivered if all notes not delivered to the trustee for cancellation (A) have become due and payable or (B) will become due and payable on the maturity date within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Company.

The Company may exercise its Legal Defeasance option notwithstanding its prior exercise of its Covenant Defeasance option.

Satisfaction and Discharge

The indenture (and all Liens on collateral in connection with the issuance of the notes) will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the notes, as expressly provided for in the indenture) as to all outstanding notes when:

• either:

(a) all the notes authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the trustee for cancellation; or

(b) all notes not delivered to the trustee for cancellation (1) have become due and payable, (2) will become due and payable at their stated maturity within one year, or (3) are to be called for redemption within

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one year, under arrangements reasonably satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the notes not delivered to the trustee for cancellation, for principal of, premium, if any, and interest, including Additional Interest, if any, on the notes to the date of maturity or redemption, as the case may be, together with irrevocable instructions from the Company directing the trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

• the Company has paid all other sums payable under the indenture and the Collateral Agreements by the Company; and

• the Company has delivered to the trustee an officers’ certificate and an opinion of counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with.

Modification of the Indenture

From time to time, the Company, the Guarantors and the trustee, without the consent of the holders, may amend the indenture, the notes, the guarantees, the Collateral Agreements and the Intercreditor Agreement:

• to cure any ambiguity, omission, defect or inconsistency contained therein;

• to provide for the assumption of the Company’s or a Guarantor’s obligations to the holders of the notes in accordance with the covenant described under “Certain Covenants—Merger, Consolidation and Sale of Assets;”

• to comply with the requirements of the Commission in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;

• to make any change that would provide any additional rights or benefits to the holders of the notes or that does not adversely affect the rights of any holder of the notes under the indenture, the notes, the guarantees, the Collateral Agreements or the Intercreditor Agreement in any material respect;

• to allow any Subsidiary or any other Person to guarantee the notes;

• to evidence or provide for a successor trustee in accordance with the terms of the indenture;

• to provide for uncertificated notes in addition to or in place of certificated notes;

• to release a Guarantor and the Liens granted by such Guarantor in favor of the trustee as permitted by the indenture and the relevant guarantee; or

• if necessary, in connection with any addition or release of collateral permitted under the terms of the indenture, the Intercreditor Agreement or Collateral Agreements,

so long as such amendment does not, in the opinion of the trustee, adversely affect the rights of any of the holders in any material respect. In formulating its opinion on such matters, the trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an opinion of counsel.

Other modifications and amendments of the indenture, the notes, the guarantees, the Collateral Agreements and the Intercreditor Agreement may be made with the consent of the holders of a majority in principal amount of the then outstanding notes issued under the indenture, including consents obtained in connection with a tender offer or exchange offer for the notes, except that, without the consent of each holder affected thereby, no modification or amendment may:

• reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver of any provision of the indenture, the notes, the guarantees, the Collateral Agreements or the Intercreditor Agreement;

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• reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest or Additional Interest, if any, on any notes;

• reduce the principal of or change or have the effect of changing the fixed maturity of any notes, or change the date on which any notes may be subject to redemption or reduce the redemption price therefor;

• make any notes payable in money other than that stated in the notes;

• make any change in provisions of the indenture relating to the right of each holder to receive payment of principal of or premium, if any, or interest, including Additional Interest, if any, on such note on or after the due date thereof or to bring suit to enforce such payment, or permitting holders of a majority in principal amount of notes to waive Defaults or Events of Default;

• after the Company’s obligation to purchase notes arises thereunder, amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect to any Asset Sale that has been consummated or, after such Change of Control has occurred or such Asset Sale has been consummated, modify any of the provisions or definitions with respect thereto;

• modify or change any provision of the indenture or the related definitions affecting the ranking of the notes or any guarantee or any Lien created under any Collateral Agreement in a manner that adversely affects the holders;

• release any Guarantor that is a Significant Subsidiary from any of its obligations under its guarantee or the indenture otherwise than in accordance with the terms of the indenture or the Intercreditor Agreement;

• release all or substantially all of the collateral other than in accordance with the terms of the indenture and the Collateral Agreements or the Intercreditor Agreement; or

• modify or change the provisions of the indenture relating to the eligibility to receive, or the computation of, Additional Amounts in a manner that adversely affects the rights of any holder.

Governing Law

The indenture, the notes and the guarantees will be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby.

Enforceability of Judgments

Because substantially all of the assets of the Company are outside of the United States, any judgment obtained in the United States against the Company, including judgments with respect to the payment of principal, interest or redemption price, may not be collectible within the United States.

The Company and the Guarantors have been informed by their Canadian counsel, Borden Ladner Gervais LLP, that the laws of the Province of Alberta permit an action to be brought before a court of competent jurisdiction in the Province of Alberta to recognize and enforce a final, conclusive and subsisting judgment in personam against the Company or any Guarantor, called the “judgment debtor”) of any United States federal or state court located in the Borough of Manhattan in The City of New York, referred to as a “New York Court”, that is not impeachable as void or voidable under the laws of the State of New York for a sum certain, without a reconsideration of the merits, if:

• the New York Court rendering such judgment had jurisdiction over the judgment debtor, as recognized by the courts of the Province of Alberta (and submission by the Company and the Guarantors in the indenture to the non-exclusive jurisdiction of the New York Court will be sufficient for that purpose) and the judgment debtor was properly served in the action leading to such judgment;

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• such judgment was not obtained by fraud or in a manner contrary to natural justice and the enforcement thereof would not be inconsistent with laws of mandatory application or with public policy, as such term is understood under the laws of the Province of Alberta, or contrary to any order made by the Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or by the Competition Tribunal under the Competition Act (Canada);

• the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue, expropriation or penal laws or other similar laws; and

• the action to enforce such judgment is commenced within the applicable limitation period.

The Trustee

Except during the continuance of an Event of Default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an Event of Default, the trustee will exercise such rights and powers vested in it by the indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

The indenture and the provisions of the Trust Indenture Act contain certain limitations on the rights of the trustee, should it become a creditor of the Company, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the Trust Indenture Act, the trustee will be permitted to engage in other transactions; provided that if the trustee acquires any conflicting interest as described in the Trust Indenture Act, it must eliminate such conflict or resign.

Certain Definitions

Set forth are certain of the defined terms used in the indenture. Reference is made to the indenture for the full definition of all such terms, as well as any other initially capitalized terms used in this description of the notes for which no definition is provided.

“8-3/4% Senior Notes Indenture” means the indenture, dated as of November 26, 2003, among the Company, the guarantors parties thereto and Wells Fargo Bank, N.A., as trustee.

“Acquired Indebtedness” means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with or into the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation and which Indebtedness is without recourse to the Company or any of its Subsidiaries or to any of their respective properties or assets other than the Person or the assets to which such Indebtedness related prior to the time such Person became a Restricted Subsidiary of the Company or the time of such acquisition, merger or consolidation.

“Administrative Agent” has the meaning set forth in the definition of the term “Credit Agreement.”

“Advisory Services Agreement” means that certain letter agreement dated October 31, 2003, among the Company, NACG Preferred Corp., NACG Holdings Inc., and the Equity Investors.

“Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the

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management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the preceding.

“Applicable Indebtedness” means:

(1) in respect of any asset that is the subject of an Asset Sale at a time when such asset constitutes collateral, Indebtedness that is pari passu with the notes and secured at such time by such asset; or

(2) in respect of any other asset, Indebtedness that is pari passu with the notes.

“Asset Acquisition” means (1) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company, or (2) the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any Person (other than a Restricted Subsidiary of the Company) that constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.

“Asset Sale” means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company of: (1) any Capital Stock (other than directors’ qualifying shares) of any Restricted Subsidiary of the Company; or (2) any other property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall not include: (a) a transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive aggregate consideration of less than $5.0 million; (b) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted under “Certain Covenants—Merger, Consolidation and Sale of Assets;” (c) any Restricted Payment permitted by the “Limitation on Restricted Payments” covenant or that constitutes a Permitted Investment; (d) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business; (e) disposals or replacements of damaged, obsolete or worn out equipment; and (f) dispositions in connection with Permitted Liens.

“Borrowing Base” means, as at any date of determination, the lesser of:

(1) the sum of:

(a) 10% of Consolidated PP&E; and

(b) 100% of the value of accounts receivable of the Company and its Restricted Subsidiaries on a consolidated basis arising in the ordinary course of business net of any reserves or write-offs in respect thereof as determined in accordance with GAAP; and

(2) $55.0 million.

“Capital Stock” means:

(1) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person, and all options, warrants or other rights to purchase or acquire any of the preceding; and

(2) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person, and all options, warrants or other rights to purchase or acquire any of the preceding.

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“Capitalized Lease Obligation” means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.

“Cash Equivalents” means:

(1) obligations issued by, or unconditionally guaranteed by, the United States or Canadian government or issued by any agency thereof and backed by the full faith and credit of the United States or Canada, as the case may be, in each case maturing within one year from the date of acquisition thereof;

(2) commercial paper maturing no more than one year from its date of creation and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Ratings Group or at least P-1 from Moody’s Investors Services, Inc. or R-1 High by Dominion Bond Rating Service Limited;

(3) certificates of deposit, eurodollar time deposits or bankers’ acceptances maturing within one year from the date of acquisition thereof and overnight bank deposits, in each case issued by any bank organized under the laws of Canada or any province thereof or the United States of America or any state thereof or the District of Columbia or any U.S. or Canadian branch of a foreign bank having at the date of acquisition thereof combined net capital and surplus of not less than US$250.0 million;

(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (1) or (3) above entered into with any bank meeting the qualifications specified in clause (3) above; and

(5) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (4) above.

“Change of Control” means the occurrence of one or more of the following events:

(1) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets or properties of the Company and its Subsidiaries, taken as a whole, to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with the provisions of the indenture) other than to a Permitted Holder or to either of NACG Holdings Inc., or NACG Preferred Corp. provided that such sale, lease, exchange or other transfer is made in accordance with the covenant described under “Certain Covenants—Merger, Consolidation and Sale of Assets”;

(2) there is a report filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as the term “offeror” is defined in Section 89(1) of the Securities Act (Ontario) for the purpose of Section 101 of the Securities Act (Ontario), or any successor provision to either of the foregoing), other than the Company, any Restricted Subsidiary of the Company or any employee benefit plan of either the Company, any Restricted Subsidiary of the Company, or any Permitted Holder has acquired beneficial ownership (within the meaning of the Securities Act (Ontario)) of, or the power to exercise control or direction over, any Capital Stock or Securities convertible into, any Capital Stock of the Company, that together with such offeror’s securities (as the term “offeror’s securities” is defined in Section 89(1) of the Securities Act (Ontario) or any successor provision thereto in relation to the Capital Stock of the Company) would constitute Voting Stock of the Company representing more than 50% of the total voting power attached to all Voting Stock of the Company then outstanding;

(3) the approval by the holders of Capital Stock of NACG Holdings Inc., or the Company, as the case may be, of any plan or proposal for the liquidation or dissolution of NACG Holdings Inc., or the Company, as the case may be (whether or not otherwise in compliance with the provisions of the indenture);

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(4) any Person or Group (other than a Permitted Holder and any entity formed by a Permitted Holder solely for the purpose of owning Capital Stock of NACG Holdings Inc.,) shall become the beneficial owner, directly or indirectly (with beneficial ownership being as defined and calculated as set forth in Rules 13d-3 and 13d-5 under the Exchange Act), of shares representing more than 50% of the Capital Stock (measured by voting power rather than number of shares) that is at the time entitled to vote for the election of the board of directors of NACG Holdings Inc., or the Company; or

(5) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company or NACG Holdings Inc., (together with any new directors whose election by such board of directors or whose nomination for election by the shareholders of the Company or NACG Holdings Inc., as applicable, was approved by a vote of a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death) to constitute a majority of the board of directors then in office.

“Collateral” shall mean all real and Personal property of the Company or any Guarantor, whether now owned or hereafter acquired, upon which a Lien securing the Obligations under the indenture, the notes, any guarantee or any Collateral Agreement is granted or purported to be granted under any Collateral Agreement.

“Collateral Agent” has the meaning set forth in the definition of the term “Credit Agreement.”

“Collateral Agreements” means, as of the Issue Date, the Debentures, Mortgages, Pledge Agreements and Deposit Instruments granted by the Company or any Guarantor and thereafter, such documents, together with any other agreement or instrument granted to the trustee by the Company or any Guarantor from time under which it grants a Lien in any of its assets to secure the notes or its guarantee, respectively. “Collateral Agreement” shall mean any one of the foregoing.

“Common Stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock.

“Consolidated EBITDA” means, with respect to any Person, for any period, the sum (without duplication) of:

(1) Consolidated Net Income; and

(2) to the extent Consolidated Net Income has been reduced thereby:

(a) all income taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period;

(b) Consolidated Interest Expense; and

(c) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Income for such period,

all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.

“Consolidated Fixed Charge Coverage Ratio” means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the latest four full fiscal quarters (the “Four Quarter Period”) ending prior to the date of the transaction or event giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio for which financial statements are available (the “Transaction Date”) to Consolidated Fixed Charges of such Person for the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition and the definitions of such terms, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

(1) the incurrence or repayment, repurchase, defeasance, discharge or other retirement of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment, repurchase, defeasance, discharge or other retirement of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time after the last day of the Four Quarter Period and on or before the Transaction Date, as if such incurrence or repayment, repurchase, defeasance, discharge or other retirement, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and

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(2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA (including any pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Exchange Act) attributable to the assets which are the subject of the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period; provided that the Consolidated EBITDA of any Person acquired shall be included only to the extent includible pursuant to the definition of the term “Consolidated Net Income.” If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.

Furthermore, in calculating “Consolidated Fixed Charges” for purposes of determining the denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage Ratio”:

(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date (including Indebtedness actually incurred on the Transaction Date) and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and

(2) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

“Consolidated Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense; plus

(2) the product of (x) the amount of all dividend payments on any Disqualified Capital Stock of such Person and any series of Preferred Stock of such Person (other than dividends paid in Qualified Capital Stock) paid or accrued during such period times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, Canadian federal, state, provincial, territorial and local income tax rate of such Person, expressed as a decimal.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:

(1) the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, determined on a consolidated basis in accordance with GAAP, including without limitation: (a) any amortization of debt discount and amortization of deferred financing costs; (b) the net

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costs under Interest Swap Obligations; (c) all capitalized interest; and (d) the interest portion of any deferred payment obligation; and

(2) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person, for any period, the aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom:

(1) after-tax gains or losses from Asset Sales (without regard to the $5.0 million limitation set forth in the definition of Asset Sales) or abandonments or reserves relating thereto;

(2) after-tax items classified as extraordinary or nonrecurring gains or losses;

(3) the net income of any Person acquired in a “pooling of interests” transaction accrued before the date it becomes a Restricted Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Restricted Subsidiary of the referent Person;

(4) the net income (but not loss) of any Restricted Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted by a contract, operation of law or otherwise; provided, however, that such income shall be included in determining Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary to the Company or another Restricted Subsidiary as a dividend in compliance with such restriction;

(5) the net income of any Person, other than a Restricted Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Restricted Subsidiary of the referent Person by such Person;

(6) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date;

(7) income or loss attributable to discontinued operations, including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued;

(8) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person’s assets, any earnings of the successor corporation before such consolidation, merger or transfer of assets;

(9) all gains and losses realized on or because of the purchase or other acquisition by such Person or any of its Restricted Subsidiaries of any securities of such Person or any of its Restricted Subsidiaries;

(10) interest expense attributable to dividends on Qualified Capital Stock pursuant to Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” or comparable GAAP concept;

(11) non-cash charges resulting from the impairment of intangible assets; and

(12) the cumulative effect of a change in accounting principles.

“Consolidated Net Worth” of any Person means the consolidated stockholders’ equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person.

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“Consolidated Non-cash Charges” means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted reducing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charge that requires an accrual of or a reserve for cash charges for any future period).

“Consolidated PP&E” means, as at any date of determination, the assets (net of depreciation) of the Company and its Restricted Subsidiaries on a consolidated basis which may properly be classified as property, plant and equipment in conformity with GAAP, excluding any assets subject to a Lien that ranks pari passu with or ahead of the Liens created by the Collateral Agreements (other than Permitted Liens described in clause (1), (2), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement)), to the extent of the lesser of the fair market value of such asset and the amount secured by such Lien.

“Credit Agreement” means the Credit Agreement dated as of May 19, 2005, among the Company, the lenders party thereto (in such capacity, together with any successors thereto, the “Lenders”), BNP Paribas (Canada), as administrative agent (in such capacity, together with any successor thereto, the “Administrative Agent”) and an entity to act as the collateral agent (in such capacity, together with any successor thereto, the “collateral agent”), together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any deferrals, renewals, amendments and restatements thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, refunding, replacing or otherwise substituting, restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under clause (2) of the definition of the term “Permitted Indebtedness”) or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement or agreements and whether by the same or any other agent, lender, creditor or group of lenders or creditors.

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in currency values or exchange rates.

“Debenture” means an agreement which charges or purports to charge a Lien in Personal and real property of the Company or any Guarantor (including the Premises and the Leased Premises of the Company or any Guarantor), as well as any other collateral secured by and described therein, to secure the Obligations under the indenture, the notes, the guarantees or any other Collateral Agreement.

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

“Deposit Instrument” means a deposit instrument granted by the Company or a Guarantor, as applicable, to the trustee in conjunction with the granting of a Debenture under which the grantor deposits the Debenture with the trustee to secure the obligations under the notes or a guarantee, as the case may be.

“Designation Amount” has the meaning given to this term in the covenant described under “Certain Covenants—Limitation on Designation of Unrestricted Subsidiaries.”

“Disqualified Capital Stock” means that portion of any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event that would constitute (i) a Change of Control or (ii) an Asset Sale if the terms of such Capital Stock provide that the Company may not purchase or redeem such Capital Stock except in compliance with the Restricted Payments covenant contained herein), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of (i) a Change of Control or (ii) an Asset Sale if the terms of such Capital Stock provide that the Company may not purchase or redeem such Capital Stock except in compliance with the Restricted Payments covenant contained herein) on or prior to the first anniversary of the final maturity date of the notes for

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cash or is convertible into or exchangeable for debt securities of the Company or its Subsidiaries at any time prior to such anniversary.

“Equity Investors” means, collectively, The Sterling Group, L.P., Genstar Capital, L.P., investment funds managed by Perry Corp. and Stephens Group, Inc.

“Exchange Offer” means an exchange offer that may be made by the Company, pursuant to the Registration Rights Agreement, to exchange for any and all of the notes a like aggregate principal amount of notes having substantially identical terms to the notes registered under the Securities Act.

“GAAP” means generally accepted accounting principles set forth in Canada, consistently applied, as in effect from time to time.

“guarantee” means a direct or indirect guarantee (other than by endorsement of negotiable instruments in the ordinary course of business) by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.

“Guarantor” means: (1) each of the Company’s Subsidiaries existing on the Issue Date and named as such in the indenture; and (2) each of the Company’s Restricted Subsidiaries that in the future executes a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of the indenture as a Guarantor; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective guarantee is released in accordance with the terms of the indenture.

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary of the Company that has (1) assets with a fair market value or book value (whichever is greater) less than $100,000 and (2) revenues not exceeding $10,000 during the 365-day period ending on such date.

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

(1) all obligations of such Person for borrowed money;

(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all Capitalized Lease Obligations of such Person;

(4) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);

(5) all obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction, whether or not then due;

(6) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below;

(7) all obligations of any other Person of the type referred to in clauses (1) through (6) that are secured by any Lien on any property or asset of such Person, the amount of any such obligation being deemed to be the lesser of the fair market value of such property or asset and the amount of the obligation so secured;

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(8) net obligations under Currency Agreements and Interest Swap Obligations of such Person; and

(9) Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.

The “maximum fixed repurchase price” of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such price shall be the fair market value thereof.

The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness;

“Initial Purchaser” means Jefferies & Company, Inc.

“Interest Swap Obligations” means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall also include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.

“Investment” means, with respect to any Person, any direct or indirect investment in any other Person in the form of loans, advances or other extensions of credit (including, without limitation, a guarantee) or capital contributions to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for consideration by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. “Investment” shall exclude extensions of trade credit by the Company and its Restricted Subsidiaries in the ordinary course of business. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Common Stock of such Restricted Subsidiary not sold or disposed of. Except as otherwise provided for herein, the amount of an Investment shall be its fair market value at the time such Investment is made and without giving effect to subsequent changes in value.

“Issue Date” means the date of original issuance of the notes.

“Lenders” has the meaning set forth in the definition of the term “Credit Agreement.”

“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).

“Mortgages” means the mortgages, deeds of trust, deeds to secure Obligations under the indenture, the notes, any guarantee or any Collateral Agreement or other similar documents securing Liens on the Premises and/or the Leased Premises, as well as the other collateral secured by and described in the mortgages, deeds of trust, deeds to secure such Obligations or other similar documents.

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“Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of:

(1) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions and other direct costs of sale);

(2) taxes paid or estimated by the Company in good faith to be payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements;

(3) repayment of Indebtedness that is secured by a Lien on the property or assets that are the subject of such Asset Sale and is required to be repaid in connection with such Asset Sale; and

(4) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.

Further, with respect to an Asset Sale by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Net Cash Proceeds shall be reduced pro rata for the portion of the equity of such Subsidiary that is not owned by the Company.

“Non-Recourse Debt” means Indebtedness of a Subsidiary:

(1) as to which neither the Company nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise or (c) constitutes the lender;

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any Indebtedness (other than the notes) of the Company or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

(3) as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Company or any Restricted Subsidiary.

“Permitted Holders” means The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc. and Stephens Group, Inc. and their respective Affiliates (in each case, other than portfolio companies thereof).

“Permitted Investments” means:

(1) Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or will become immediately after such Investment a Restricted Subsidiary of the Company or that will merge or consolidate into the Company or a Restricted Subsidiary of the Company;

(2) Investments in the Company by any Restricted Subsidiary of the Company; provided that any Indebtedness evidencing such Investment and held by a Restricted Subsidiary that is not a Guarantor is unsecured and subordinated, pursuant to a written agreement, to the Company’s obligations under the notes and the indenture;

(3) Investments in cash and Cash Equivalents;

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(4) Currency Agreements and Interest Swap Obligations entered into by the Company or its Restricted Subsidiaries and otherwise in compliance with the indenture;

(5) additional Investments not to exceed $15.0 million at any one time outstanding;

(6) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in good faith settlement of delinquent obligations of such trade creditors or customers;

(7) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(8) Investments in prepaid expenses, negotiable instruments held for collection or deposit and lease, utility and workers compensation, performance and similar deposits entered into in the ordinary course of business;

(9) Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the “Limitation on Asset Sales” covenant;

(10) Investments represented by guarantees that are otherwise permitted under the indenture;

(11) Investments the payment for which is Qualified Capital Stock of the Company or NACG Holdings Inc.;

(12) any assets acquired as a result of a foreclosure by the Company or any such Restricted Subsidiary with respect to any secured Permitted Investment or other transfer of title with respect to any secured Permitted Investment in default;

(13) Investments existing on of the Issue Date and any amendment, extension, substitution, renewal or modification thereof to the extent that any such amendment, extension, substitution, renewal or modification does not require the Company or any Restricted Subsidiary to make any additional cash or non-cash payments or provide additional services in connection therewith;

(14) Investments to support bonding arrangements in the ordinary course of business;

(15) Investments in Permitted Joint Ventures in an amount not to exceed $10.0 million at any time outstanding; and

(16) loans or advances to employees or customers in the ordinary course of business and guarantees or similar obligations with respect to the preceding in an amount not to exceed $1.0 million in each fiscal year.

“Permitted Joint Venture” means an entity characterized as a joint venture in which the Company or a Restricted Subsidiary (a) owns at least 30% of the ownership interest and (b) has the right to receive a percentage of the profits or distributions at least equal to the percentage of its ownership interest.

“Permitted Liens” means the following types of Liens:

(1) Liens existing as of the Issue Date and securing Indebtedness permitted to be outstanding under clause (3) of the definition of the term “Permitted Indebtedness” to the extent and in the manner such Liens are in effect on the Issue Date;

(2) Liens securing Indebtedness under the Credit Agreement to the extent such Indebtedness is permitted under clause (2) of the definition of the term “Permitted Indebtedness” and interest, fees and other obligations thereunder not constituting Indebtedness;

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(3) Liens securing the indenture, the notes and the guarantees;

(4) Liens of the Company or a Wholly Owned Restricted Subsidiary of the Company on assets of any Restricted Subsidiary of the Company;

(5) Liens securing Refinancing Indebtedness that is incurred in accordance with the provisions of the indenture to Refinance any Indebtedness that has been secured by a Lien permitted under the indenture; provided, however, that such Liens: (a) are no less favorable to the holders in any material respect and are not more favorable to the lienholders in any material respect with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (b) do not extend to or cover any property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced;

(6) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;

(7) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;

(8) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

(9) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(10) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

(11) any interest or title of a lessor under any Capitalized Lease Obligation incurred in accordance with the “Limitation on Incurrence of Additional Indebtedness” covenant; provided that (a) such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation and (b) the sum of (x) the aggregate amount of such Capitalized Lease Obligations and (y) the aggregate amount of Purchase Money Indebtedness secured pursuant to a Permitted Lien described in clause (12) below shall not exceed $30.0 million;

(12) Liens securing Purchase Money Indebtedness incurred in accordance with the “Limitation on Incurrence of Additional Indebtedness” covenant; provided that (a) such Purchase Money Indebtedness shall not exceed the purchase price or other cost of such property or equipment and shall not be secured by any property or equipment of the Company or any Restricted Subsidiary of the Company other than the property and equipment so acquired or constructed, (b) the Lien securing such Purchase Money Indebtedness shall be created within 90 days of such acquisition or construction and (c) the sum of (x) the aggregate amount of such Purchase Money Indebtedness and (y) the aggregate amount of Capitalized Lien Obligations secured pursuant to a Permitted Lien described in clause (11) above shall not exceed $30.0 million;

(13) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

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(14) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(15) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set off;

(16) Liens securing Interest Swap Obligations that relate to Indebtedness that is otherwise permitted under the indenture, including Indebtedness arising under any Swap Agreement described in clause (1) of the definition thereof;

(17) Liens securing Indebtedness under Currency Agreements permitted under the indenture (including Indebtedness arising under any Swap Agreement described in clause (2) of the definition thereof);

(18) Liens securing Acquired Indebtedness incurred in accordance with the “Limitation on Incurrence of Additional Indebtedness” covenant; provided that:

(a) such Liens secured such Acquired Indebtedness at the time of and before the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company; and

(b) such Liens do not extend to or cover any property or assets of the Company or of any of its Restricted Subsidiaries other than the property or assets that secured the Acquired Indebtedness before the time such Indebtedness became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company and are no more favorable to the lienholders than those securing the Acquired Indebtedness before the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company;

(19) leases, subleases, licenses and sublicenses granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries;

(20) banker’s liens, rights of setoff and similar statutory or common law liens with respect to cash and Cash Equivalents on deposit in one or more bank accounts in the ordinary course of business;

(21) Liens arising from filing financing statements under the Personal Property Security Act (Alberta) or other applicable Personal property security laws regarding operating leases; and

(22) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods.

“Person” means an individual, partnership (general or limited), corporation, limited liability company, unincorporated organization, association, joint stock company, trust or joint venture, or a governmental agency or political subdivision thereof.

“Pledge Agreement” means an agreement which charges or purports to charge a Lien in the Capital Stock of any Person held by the Company or any Guarantor, as well as any other collateral secured by and described therein, to secure the Obligations under the indenture, the notes, the guarantees or any other Collateral Agreement.

“Preferred Stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

“Public Equity Offering” means an underwritten primary public offering of Qualified Capital Stock of NACG Holdings Inc., or the Company pursuant to an effective registration statement filed with the Commission in accordance with the Securities Act (excluding registration statements filed on Form S-8) or a prospectus filed with

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the applicable Canadian securities regulators in accordance with applicable Canadian securities laws; provided that, in the event of a Public Equity Offering by NACG Holdings Inc., NACG will contributes to the capital of the Company the portion of the net cash proceeds of such Public Equity Offering necessary to pay the aggregate redemption price (plus accrued interest to the redemption date) of the notes to be redeemed as described under “Redemption—Optional Redemption Upon Public Equity Offerings”.

“Purchase Money Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries incurred for the purpose of financing all or any part of the purchase price, or the cost of installation, construction or improvement, of property, equipment or a business; provided, that the aggregate principal amount of such Indebtedness at the time of incurrence does not exceed the lesser of the fair market value of such property or such purchase price or cost.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

“Refinance” means, in respect of any security or Indebtedness, to refinance, restructure, defer, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means any Indebtedness of the Company or a Restricted Subsidiary issued in exchange for, or the proceeds from the issuance and sale or disbursement of which are used substantially concurrently to Refinance in whole or in part, any Indebtedness of the Company or any Restricted Subsidiary, in each case that does not:

(1) result in an increase in the aggregate principal amount (or accreted value, if applicable) of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable fees and expenses incurred by the Company or any Restricted Subsidiary in connection with such Refinancing); or

(2) create Indebtedness with: (a) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced; or (b) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness solely of the Company (and is not otherwise guaranteed by a Restricted Subsidiary of the Company), then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the notes or any guarantee, then such Refinancing Indebtedness shall be subordinate to the notes or such guarantee, as the case may be, at least to the same extent and in the same manner as the Indebtedness being Refinanced.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Issue Date, among the Company, the Guarantors and the Initial Purchaser, as the same may be amended or modified from time to time in accordance with the terms thereof.

“Restricted Payment” means any of the following:

(1) the declaration or payment of any dividend or making any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company and dividends and distributions payable to the Company or another Restricted Subsidiary that is a Wholly Owned Restricted Subsidiary) on or in respect of shares of the Company’s Capital Stock to the direct or indirect holders of such Capital Stock;

(2) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or its Restricted Subsidiaries (other than any such Capital Stock held by the Company or any Restricted Subsidiary);

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(3) the making of any principal payment on, or the purchase, defeasance, redemption, prepayment, decreasing or other acquisition or retirement for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness that by its terms is subordinated to the notes or a guarantee (other than such Indebtedness that is held by the Company or any Restricted Subsidiary);

(4) making of any Investment (other than Permitted Investments); or

(5) the declaration or payment of any cash dividend or making any cash distribution on or in respect to the Sponsor Preferred Stock to the direct or indirect holders of such Sponsor Preferred Stock and the making of any cash payment on, or the purchase, redemption, prepayment, decreasing or other acquisition or retirement for value in cash of the Sponsor Preferred Stock.

“Restricted Subsidiary” of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary.

“Sale and Leaseback Transaction” means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of any property, whether owned by the Company or any Restricted Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such Property.

“Senior Lien Agreements” means, collectively, the Credit Agreement and the Swap Agreements.

“Senior Lien Obligations” means the Obligations arising under or evidenced by the Senior Lien Agreements.

“Senior Lienholders” means, collectively, the Senior Lien Agent, the collateral agent, the Administrative Agent, the Lenders and the counterparties to the Swap Agreements.

“Significant Subsidiary” means any Restricted Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

“Sponsor Preferred Stock” means the aggregate of 7,500 shares of senior preferred stock issued on May 19, 2005 by the Company to certain shareholders of NACG Holdings Inc., plus any shares of the Sponsor Preferred Stock paid as a dividend on the Sponsor Preferred Stock.

“Subsidiary”, with respect to any Person, means:

(1) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or

(2) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

“Swap Agreements” means

(1) each agreement relating to Interest Swap Obligations entered into by the Company or any of its Restricted Subsidiaries pursuant to clause (4) of the definition of the term “Permitted Indebtedness” and

(2) each Currency Agreement entered into by the Company or any of its Restricted Subsidiaries pursuant to clause (5) of the definition of the term “Permitted Indebtedness”, in each case, existing on the Issue Date or with a counterparty that is (or at the time such Swap Agreement was entered into, was) a Lender or an Affiliate of a Lender.

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“Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the board of directors of the Company in accordance with the covenant described under “Certain Covenants—Limitation on Designation of Unrestricted Subsidiaries” and (2) any Subsidiary of an Unrestricted Subsidiary.

“Voting Stock” means, with respect to any Person, securities of any class or classes of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors (or equivalent governing body) of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

“Wholly Owned Restricted Subsidiary” of any Person means any Wholly Owned Subsidiary of such Person which at the time of determination is a Restricted Subsidiary of such Person.

“Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than directors’ qualifying shares or an immaterial amount of shares owned by other Persons) are owned by such Person or any Wholly Owned Subsidiary of such Person.

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BOOK-ENTRY; DELIVERY AND FORM

Generally, the original notes were, and the exchange notes will be, issued in the form of global notes registered in the name of The Depository Trust Company, called DTC, or its nominee.

Beneficial interests in the global notes may not be exchanged for notes in certificated form except in the limited circumstances described below. Payment of the principal of and interest on certificated notes is subject to the indenture and will be made at the corporate trust office of the trustee or such other office or agency as may be designated by it for such purpose in New York City. Payment of interest on certificated notes will be made to the person in whose name such note is registered at the close of business on the applicable record date. All other terms of the certificated notes are governed by the indenture. Outstanding notes issued in certificated form may be exchanged in the exchange offer for new notes in certificated form.

Except as described below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee.

Initially, the trustee will act as paying agent and registrar for the notes.

Depositary Procedures

DTC is a limited-purpose trust company created to hold securities for its participating organizations and to facilitate the clearance and settlement of transactions in those securities between participants through electronic book-entry changes in accounts of participants. The participants include securities brokers and dealers, including the initial purchaser, banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the participants and indirect participants.

Pursuant to DTC’s procedures, (a) upon deposit of the global notes, DTC will credit the accounts of participants designated by the initial purchaser with portions of the principal amount of global notes and (b) ownership of such interests in the global notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to participants, or by participants and the indirect participants, with respect to other owners of beneficial interests in the global notes.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interest in a global note to such persons may be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in a global note to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of physical certificates evidencing such interest. For certain other restrictions on the transferability of the notes, see “—Certificated Notes.”

Under the terms of the indenture, we and the trustee will treat the persons in whose names the notes, including the global notes, are registered as the owners thereof for the purpose of receiving payments of principal, and premium and additional interest, if any, and interest for any and all other purposes whatsoever. Payments in respect of the principal, premium and additional interest, if any, and interest on a global note registered in the name of DTC or its nominee will be payable by the trustee to DTC or its nominee in its capacity as the registered holder under the indenture. Consequently, none of us, the trustee nor any of our agents or the trustee’s agents has or will have any responsibility or liability for (a) any aspect of DTC’s records or any participant’s or indirect participant’s records relating to or payments made on account of beneficial ownership interests in the global notes, or for maintaining, supervising or reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership interests in the global notes or (b) any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

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DTC’s current practices for payments of principal, interest, additional interest and the like with respect to securities such as the notes are to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the global notes as shown on the records of DTC. Payments by participants and the indirect participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the trustee or us. Neither we nor the trustee will be liable for any delay by DTC or its participants in identifying the beneficial owners of the notes, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the notes for all purposes.

The global notes will trade in DTC’s Same-Day Funds Settlement System and, therefore, transfers between participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in immediately available funds. Transfers between indirect participants who hold an interest through a participant will be effected in accordance with the procedures of such participant but generally will settle in immediately available funds.

DTC will take any action permitted to be taken by a holder of notes only at the direction of one or more participants to whose account interests in the global notes are credited and only in respect of such portion of the aggregate principal amount of the notes to which such participant or participants has or have given direction. However, if there is an event of default under the notes, DTC reserves the right to exchange global notes, without the direction of one or more of its participants, for legended notes in certificated form, and to distribute such certificated forms of notes to its participants.

Although DTC has agreed to the preceding procedures to facilitate transfers of interests notes among participants, it is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee shall have any responsibility for the performance by DTC or its participants and indirect participants of their respective obligations under the rules and procedures governing any of their operations.

Certificated Notes. Subject to certain conditions, any person having a beneficial interest in the global note may, upon request to the trustee, exchange such beneficial interest for notes in the form of certificated notes. Upon any such issuance, the trustee is required to register such certificated notes in the name of, and cause the same to be delivered to, such person or persons, or the nominee of any of such person or persons. In addition, if

• we notify the trustee in writing that DTC is no longer willing or able to act as a depositary and we are unable to locate a qualified successor within 90 days,

• we, at our option, notify the trustee in writing that we elect to cause the issuance of notes in the form of certificated notes under the indenture, or

• DTC will not continue to hold the book-entry interests related to the global notes or is no longer a clearing agency registered under the Exchange Act and we do not replace DTC within 120 days,

then, upon surrender by the global note holder of its global note, notes in such form will be issued to each person that the global note holder and DTC identify as being the beneficial owner of the related notes.

Neither we nor the trustee will be liable for any delay by the global note holder or DTC in identifying the beneficial owners of notes and we and the trustee may conclusively rely on, and will be protected in relying on, instructions from the global note holder or DTC for all purposes.

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INCOME TAX CONSIDERATIONS

Material U.S. Federal Income Tax Considerations

The following discussion summarizes the material United States federal income tax consequences of the exchange of original notes for exchange notes. This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended, applicable Treasury Regulations promulgated and proposed thereunder, judicial authority and administrative interpretations, as of the date hereof, all of which are subject to change, possibly with retroactive effect, or are subject to different interpretations. We cannot assure you that the Internal Revenue Service will not challenge one or more of the tax consequences described in this section, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the United States federal tax consequences of the exchange of original notes for exchange notes.

In this discussion, we do not purport to address all tax considerations that may be important to a particular holder in light of the holder’s circumstances, or to certain categories of investors that may be subject to special rules, such as financial institutions, insurance companies, regulated investment companies, tax exempt organizations, dealers in securities or currencies, persons whose functional currency is not the U.S. dollar, U.S. expatriates, persons subject to the alternative minimum tax or persons who hold the notes as part of a hedge, conversion transaction, straddle or other risk reduction transaction. This discussion is limited to holders who purchased the original notes for cash at the original offering price and who hold the notes as capital assets within the meaning of section 1221 of the Internal Revenue Code. If a partnership holds notes, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. This discussion also does not address the tax considerations arising under the laws of any foreign, state, local or other jurisdiction.

We encourage holders of original notes to consult their own tax advisors regarding the application of the U.S. federal income tax laws to them of the exchange offer and the applicability and effect of state, local or foreign tax laws and tax treaties.

Treatment of Exchanges under the Exchange Offer. The exchange of original notes for exchange notes under the terms of the exchange offer will not constitute a taxable exchange. As a result,

• a holder will not recognize taxable gain or loss as a result of exchanging original notes for exchange notes under the terms of the exchange offer,

• the holding period of the exchange notes will include the holding period of the original notes exchanged for the exchange notes, and

• the adjusted tax basis for the exchange notes will be the same as the adjusted tax basis, immediately before the exchange, of the original notes exchanged for the exchange notes.

Information Reporting and Backup Withholding. We will, where required, report to the holders of the notes and the Internal Revenue Service the amount of any interest paid on the notes in each calendar year and the amounts of federal income tax withheld, if any, with respect to payments. A noncorporate noteholder may be subject to information reporting and to backup withholding with respect to payments of principal, premium, if any, and interest made on the notes, or on proceeds of the disposition of the notes before maturity, unless the noteholder provides a correct taxpayer identification number or proof of an applicable exemption, and otherwise complies with applicable requirements of the information and backup withholding rules.

Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules will be refunded or credited against the noteholder’s federal income tax liability, provided that the required information is furnished to the Internal Revenue Service.

Material Canadian Income Tax Considerations

The following summarizes the main Canadian federal income tax consequences applicable to a holder that acquires exchange notes pursuant to the exchange offer and that acquired the original notes exchanged therefor

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pursuant to our offering memorandum dated November 21, 2003 and that, at all times for purposes of the Income Tax Act (Canada), referred to in this section as the “Act,” is the beneficial owner of an original note or exchange note, deals at arm’s length with us, is not a resident and is not deemed to be a resident of Canada during any taxation year in which it owns the original notes or exchange notes, and does not use or hold, and is not deemed to use or hold the original notes or exchange notes in the course of carrying on a business in Canada, called a “non-resident holder.” Special rules, which are not discussed in this summary, may apply to a non-resident that is an insurer carrying on business in Canada and elsewhere.

This summary is based on the relevant provisions of the Act and the regulations thereunder, called the “Regulations,” and our Canadian counsel’s understanding of the published administrative and assessing practices of the Canada Customs and Revenue Agency as of the date of this prospectus. It also takes into account specific proposals to amend the Act and the Regulations publicly announced by the Minister of Finance (Canada) prior to the date hereof but there is no certainty that such proposals will be enacted in the form proposed, if at all. This summary does not otherwise take into account or anticipate any changes in law, whether by way of legislative, judicial or governmental action or interpretation, nor does it address any provincial, territorial or foreign income tax considerations.

In this summary, we do not purport to address all tax considerations that may be important to a particular non-resident holder, in light of the holder’s circumstances, concerning the consequences of acquiring, holding or disposing of original notes or exchange notes. We encourage non-resident holders of original notes or exchange notes to consult their own tax advisors having regard to their particular circumstances.

Exchange. A non-resident holder will not be subject to tax as a consequence of the exchange of its original notes for exchange notes pursuant to the terms of the exchange offer.

Interest Payments. A non-resident holder will not be subject to tax, including withholding tax, under the Act on interest, principal or premium on the original notes or exchange notes.

Dispositions. Gains realized on the disposition or deemed disposition of an original note or exchange note by a non-resident holder will not be subject to tax under the Act.

132

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” or similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our services, the expansion of our business, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve risks and uncertainties, which could cause actual results that differ materially from those contained in any forward-looking statement. Many of these risks and uncertainties are beyond our ability to control or predict and the occurrence of any such risk or uncertainty could be material. Such factors include, but are not limited to, those discussed in the section entitled “Risk Factors,” which include the following:

• the effectiveness of our internal controls;

• our ability to comply with the terms of the agreements governing our indebtedness;

• our ability to obtain surety bonds as required by some of our customers;

• changes in oil and gas prices;

• decreases in outsourcing work by our customers;

• shut-downs or cutbacks at major businesses that use our services;

• changes in laws or regulations, third party relations and approvals, and decisions of courts, regulators and governmental bodies that may adversely affect our business or the business of the customers we serve;

• our ability to hire and retain a skilled labor force;

• our ability to bid successfully on new projects and accurately forecast costs associated with unit price or fixed price contracts;

• our ability to purchase or lease equipment;

• provincial, regional and local economic, competitive and regulatory conditions and developments;

• technological developments;

• capital markets conditions;

• inflation rates;

• foreign currency exchange rates;

133

• interest rates;

• weather conditions;

• the timing and success of business development efforts; and

• our ability to successfully identify and acquire new businesses and assets and integrate them into our existing operations.

We believe the forward-looking statements in this prospectus are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on our current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

VALIDITY OF THE EXCHANGE NOTES

The validity of the exchange notes being offered pursuant to this prospectus will be passed upon for us by Bracewell & Giuliani LLP, Houston, Texas. Bracewell & Giuliani LLP will rely upon Borden Ladner Gervais LLP, Toronto, Ontario with respect to matters of Canadian law. Certain members of Bracewell & Giuliani LLP own beneficially less than 1% of the common shares of NACG Holdings Inc. and the preferred stock of North American Energy Partners Inc.

EXPERTS

The consolidated balance sheets of North American Energy Partners Inc. as at March 31, 2004 and Norama Ltd. as at March 31, 2003, 2002 and 2001 and the consolidated statements of operations, retained earnings and cash flows of North American Energy Partners Inc. for the period November 26, 2003 to March 31, 2004 and Norama Ltd. for the period April 1, 2003 to November 25, 2003 and the years ended March 31, 2003, 2002 and 2001 included in this prospectus have been audited by KPMG LLP, independent registered public accounting firm, as stated in their reports appearing in this prospectus.

ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS

We are a corporation incorporated under the Canada Business Corporations Act and are governed by all applicable provincial and federal laws of Canada. Several of our directors and officers and others named in this prospectus reside principally in Canada. Because these persons are located outside the United States, it may not be possible for you to effect service of process within the United States upon those persons. Furthermore, it may not be possible for you to enforce against us or them, in the United States, judgments obtained in U.S. courts, because substantially all of our assets and the assets of these persons are located outside the United States. We have been advised that there is doubt as to the enforceability, in original actions in Canadian courts, of liabilities based upon the U.S. federal securities laws and as to the enforceability in Canadian courts of judgments of U.S. courts obtained in actions based upon the civil liability provisions of the U.S. federal securities laws. Therefore, it may not be possible to enforce those actions against us, our directors and officers or other persons named in this prospectus.

WHERE YOU CAN FIND MORE INFORMATION

We file various reports and other information with the SEC. These reports and other information are available for reading and copying at the SEC Public Reference Room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room and the SEC’s copying charges. The SEC also maintains an Internet site at http://www.sec.gov that contains the reports and other information that we file electronically with the SEC. However, we are not incorporating such documents by reference in this prospectus. You should only rely on the information contained in this prospectus in making a decision to exchange original notes for exchange notes.

134

As a foreign private issuer, we are exempt from the rule under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Because we are a foreign private issuer, we, our directors and our officers are also exempt from the short swing profit recovery provisions of Section 16 of the Exchange Act.

The indenture pursuant to which the notes are issued provides that we, whether or not we are subject to Section 13(a) or 15(d) of the Exchange Act, must provide the indenture trustee and holders of notes annual reports on Form 20-F or 40-F, as applicable, and reports on Form 10-Q or reports on Form 6-K which, regardless of applicable requirements, shall, at a minimum, contain a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and, with respect to any such reports, a reconciliation to U.S. GAAP as permitted by the SEC for foreign private issuers; provided, however, that we shall not be obligated to file such reports with the SEC if the SEC does not permit such filings.

In the event we are no longer required to file reports with the SEC, we may discontinue filing them with the SEC at any time. During the period in which we are not a reporting issuer under the Exchange Act, we have agreed that, for so long as any notes remain outstanding and are “restricted securities” within the meaning of Rule 144 under the Securities Act, we will furnish to the holders of such notes and prospective purchasers of such notes, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Any such request should be directed to North American Energy Partners Inc., Vice President, Finance, Zone 3, Acheson Industrial Area, 2-53016 Highway 60, Acheson, Alberta T7X 5A7. Our telephone number is (780) 960-7171.

GLOSSARY

The following are abbreviations and definitions of certain terms commonly used in our industry and this prospectus.

“Alberta oil sands,” or “oil sands,” means crude deposits that are substantially heavier, or more viscous, than other crude oils. Oil sands consist of sand, bitumen, mineral rich clays and water. The oil sands are located in three Alberta regions: Athabasca, Cold Lake and Peace River.

“Albian” means Albian Sands Energy Inc., the company that operates the Muskeg River Mine. The Muskeg River Mine and the Scotford Upgrader together comprise the Athabasca oil sands project.

“Athabasca oil sands project” means a joint venture of Shell Canada Limited, Chevron Canada Limited (a wholly-owned subsidiary of ChevronTexaco Corp.) and Western Oil Sands Inc. and consists of two main components:

• The Muskeg River Mine, which is located 75 kilometers north of Fort McMurray, Alberta, Canada.

• The Scotford Upgrader, which is adjacent to Shell’s Scotford Refinery in Fort Saskatchewan, Alberta, Canada.

“Basin” means a segment of the earth’s crust that has been downwarped or downfaulted and in which thick layers of sediments have accumulated over a long period of time.

“Bitumen” means the molasses-like substance that comprises up to 18% of oil sand. Alberta Energy and Utilities Board defines bitumen as heavy oil, below 15 degrees API.

“Canadian Natural Resources Limited,” or “CNRL,” means a senior independent oil and natural gas exploration, development and production company based in Calgary, Alberta. CNRL’s operations are focused in western Canada, the North Sea and offshore West Africa.

“Compounded annual growth rate” means the year-over-year growth rate over a specified period of time.

“Cost plus” means, when referring to customer contracts, cost of services plus a pre-arranged fixed or variable fee that represents profit.

135

“Crude oil” means the oil that is produced from a reservoir after any associated gas has been removed.

“EnCana” means EnCana Corporation, one of North America’s leading independent oil and gas companies.

“Extraction” means the process of separating the bitumen from the oil sand.

“Fixed price” means, when referring to customer contracts, a defined price to complete a fixed scope of work and includes all costs for labor, equipment, materials, subcontractors, overhead and fees; the contractor assumes the risk except for changes to the scope of work which are made by the customer.

“FOM” means a fully operated and maintained contract where our equipment and personnel are utilized by the customer for a full range of services.

“Grande Cache Coal” means Grande Cache Coal Corporation, an Alberta based metallurgical coal mining company that is developing a long-term mining operation to produce metallurgical coal from Grande Cache’s coal leases in the Smoky River Coalfield located in west-central Alberta.

“HDPE” means high density polyethylene, a commonly used piping material.

“Muskeg” means a swamp or bog formed by an accumulation of sphagnum moss, leaves and decayed matter resembling peat.

“Noramac” means Noramac Ventures Inc., a joint venture between North American Construction Group Inc., our wholly-owned subsidiary, and Fort McKay Construction Ltd.

“Overburden” means the layer of rocky, clay-like material that covers the oil sands.

“PVC” means polyvinyl chloride, a commonly used piping material.

“Suncor” means Suncor Energy Inc., a mining and extracting crude oil company that develops the oil sands deposits of northern Alberta. Suncor also explores for, develops and markets natural gas and operates a refining and marketing business in Ontario under the Sunoco brand.

“Syncrude” means Syncrude Canada Ltd., the company that operates the Syncrude Project.

“Syncrude Project” means a joint venture of Canadian Oil Sands Limited, Conoco Phillips Oilsands Partnership II, Imperial Oil Resources, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Inc., Petro-Canada Oil and Gas, and Canadian Oil Sands Limited Partnership.

“Synthetic crude oil” means crude oil produced by upgrading bitumen. It is considered synthetic because its original hydrocarbon mark has been altered in the upgrading process.

“Time-and-materials” means, when referring to customer contracts, predefined labor and equipment rates without a cap on labor and equipment hours; materials and subcontractors’ costs are marked-up.

“Unit price” means, when referring to customer contracts, for every unit of work performed, the contractor is paid a specified amount.

“Upgrading” means the conversion of heavy bitumen into a lighter crude oil by increasing the hydrogen to carbon ratio, either through the removal of carbon (coking) or the addition of hydrogen (hydroprocessing).

136

Some common units of measure:

1.0 barrel (oil) = 42 gallons

1.0 ton (short ton) = 2,000 pounds

1.0 gallon = 3.79 liter = 0.833 imperial gallon

1.0 kilometer = 0.6214 miles

1.0 hectare = 10,000 square meters (an area 100 m x 100 m, or 328 ft x 328 ft) = 2.47 acres

1.0 square kilometer = 100 hectares = 247 acres = 0.3861 square miles

1.0 meter = 3.28 feet

137

I NDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements of North American Energy Partners Inc.
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Retained Earnings	F-4
Consolidated Statements of Cash Flows	F-5
Notes to Consolidated Financial Statements	F-6
Audited Consolidated Financial Statements of Norama Ltd.
Auditors’ Report	F-27
Consolidated Balance Sheets	F-28
Consolidated Statements of Earnings and Retained Earnings	F-29
Consolidated Statements of Cash Flows	F-30
Notes to Consolidated Financial Statements	F-31
Unaudited Interim Consolidated Financial Statements of North American Energy Partners Inc.
Interim Consolidated Balance Sheets	F-44
Interim Consolidated Statements of Operations and Retained Earnings (Deficit)	F-45
Interim Consolidated Statements of Cash Flows	F-46
Notes to Interim Consolidated Financial Statements	F-47

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors of North American Energy Partners Inc.

We have audited the consolidated balance sheet of North American Energy Partners Inc. as at March 31, 2004 and the consolidated balance sheet of Norama Ltd. (the “Predecessor Company”) as at March 31, 2003 and the consolidated statements of operations and retained earnings and cash flows of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004, and of the Predecessor Company for the period April 1, 2003 to November 25, 2003 and each of the years in the two-year period ended March 31, 2003 and 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the North American Energy Partners Inc. as at March 31, 2004 and the Predecessor Company as at March 31, 2003 and the results of operations and cash flows of North American Energy Partners Inc. for the period from November 26, 2003 to March 31, 2004, and of the Predecessor Company for the period April 1, 2003 to November 25, 2003 and each of the years in the two-year period ended March 31, 2003 and 2002, in accordance with Canadian generally accepted accounting principles.

Canadian generally accepted accounting principles vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in note 19 to the consolidated financial statements.

Signed “KPMG LLP”

Chartered Accountants

Edmonton, Canada

June 8, 2004

F-2

NORTH AMERICAN ENERGY PARTNERS INC.

Consolidated Balance Sheets

(in thousands of Canadian dollars)

	March 31, 2004			Predecessor Company (note 2(a)) March 31, 2003
Assets
Current assets:
Cash and cash equivalents	$	36,595		$	—
Accounts receivable (note 11(a))		33,647			56,622
Unbilled revenue		27,676			24,777
Inventory		1,609			—
Prepaid expenses		1,272			300
		100,799			81,699
Capital assets (note 4)		167,905			76,234
Goodwill (note 3)		198,549			—
Intangible assets, net of accumulated amortization of $12,928 (notes 3 and 5)		4,870			—
Deferred financing costs, net of accumulated amortization of $814 (note 3)		17,266			—
	$	489,389		$	157,933
Liabilities and Shareholder’s Equity
Current liabilities:
Cheques issued in excess of cash deposits	$	—		$	2,496
Revolving credit facility (note 6(a))		—			—
Operating line of credit (note 6(b))		—			516
Accounts payable (note 11(b))		23,187			28,820
Accrued liabilities		20,808			10,423
Current portion of term credit facility (note 6(a))		7,250			14,601
Current portion of capital lease obligations (note 7)		787			4,842
Future income taxes (note 9)		5,260			12,300
Current portion of advances from Norama Inc. (note 13(c))		—			3,100
		57,292			77,098
Term credit facility (note 6(a))		41,250			7,525
Capital lease obligations (note 7)		2,251			3,943
Senior notes (note 8)		262,260			—
Derivative financial instruments (note 14(c))		740			—
Future income taxes (note 9)		2,515			10,675
Advances from Norama Inc. (note 13(c))		—			28,874
Shareholder’s equity:
Share capital (note 10)		127,500			1
Contributed surplus (note 17)		137			—
Retained earnings (deficit)		(4,556	)		29,817
		123,081			29,818
Commitments (note 15)
United States generally accepted accounting principles (note 19)
	$	489,389		$	157,933

See accompanying notes to consolidated financial statements.

F-3

NORTH AMERICAN ENERGY PARTNERS INC.

Consolidated Statements of Operations and Retained Earnings

(in thousands of Canadian dollars)

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Revenue	$	127,614		$	250,919		$	344,186		$	249,351
Project costs		83,208			156,835			219,979			127,996
Equipment costs		15,116			53,986			72,228			77,289
Depreciation		6,674			6,566			10,974			11,299
		104,998			217,387			303,181			216,584
Gross profit		22,616			33,532			41,005			32,767
General and administrative		6,113			7,924			12,233			12,794
Loss (gain) on disposal of capital assets		131			(49	)		(2,265	)		(218	)
Amortization of intangible assets		12,928			—			—			—
Operating income		3,444			25,657			31,037			20,191
Management fees (note 13(c))		—			41,070			8,000			14,400
Interest expense, net (note 11(c))		10,791			2,357			4,162			3,510
Foreign exchange (gain) loss (note 14(d))		79			(7	)		(234	)		(17	)
		10,870			43,420			11,928			17,893
Income (loss) before income taxes		(7,426	)		(17,763	)		19,109			2,298
Income taxes (note 9):
Current income taxes		1,178			218			245			239
Future income taxes		(4,048	)		(6,840	)		6,375			450
		(2,870	)		(6,622	)		6,620			689
Net income (loss)		(4,556	)		(11,141	)		12,489			1,609
Dividends		—			—			(50	)		(1,000	)
Retained earnings, beginning of period		—			29,817			17,378			16,769
Retained earnings (deficit), end of period	$	(4,556	)	$	18,676		$	29,817		$	17,378

See accompanying notes to consolidated financial statements.

F-4

NORTH AMERICAN ENERGY PARTNERS INC.

Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Cash provided by (used in):
Operating activities:
Net income (loss)	$	(4,556	)	$	(11,141	)	$	12,489		$	1,609
Items not affecting cash:
Depreciation		6,674			6,566			10,974			11,299
Amortization of intangible assets		12,928			—			—			—
Amortization of deferred financing costs		814			—			—			—
Loss (gain) on disposal of capital assets		131			(49	)		(2,265	)		(218	)
Increase (decrease) in allowance for doubtful accounts		(60	)		141			142			274
Stock-based compensation expense		137			—			—			—
Future income taxes		(4,048	)		(6,840	)		6,375			450
Net changes in non-cash working capital (note 11(e))		3,457			13,832			(11,432	)		(9,239	)
		15,477			2,509			16,283			4,175
Investing activities:
Acquisition (note 3)		(367,778	)		—			—			—
Purchase of capital assets		(2,501	)		(5,234	)		(22,932	)		(8,668	)
Proceeds on disposal of capital assets		5,765			609			4,187			2,204
		(364,514	)		(4,625	)		(18,745	)		(6,464	)
Financing activities:
Issuance of share capital		92,500			—			—			—
Issuance of senior notes		263,000			—			—			—
Proceeds from term credit facility		50,000			—			13,500			8,003
Financing costs		(18,080	)		—			—			—
Increase (decrease) in operating line of credit		—			(516	)		(232	)		748
Repayment of term credit facility		(1,500	)		(4,428	)		(5,280	)		(5,614	)
Repayment of capital lease obligations		(288	)		(3,289	)		(3,058	)		(1,250	)
Increase (decrease) in cheques issued in excess of cash deposits		—			(2,496	)		(1,313	)		3,809
Advances from Norama Inc.		—			17,696			(1,105	)		(6,428	)
Dividends paid		—			—			(50	)		(1,000	)
		385,632			6,967			2,462			(1,732	)
Increase (decrease) in cash and cash equivalents		36,595			4,851			—			(4,021	)
Cash and cash equivalents, beginning of period		—			—			—			4,021
Cash and cash equivalents, end of period	$	36,595		$	4,851		$	—		$	—

See accompanying notes to consolidated financial statements.

F-5

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

1. Nature of operations

North American Energy Partners Inc. (the “Company”) was incorporated under the Canada Business Corporations Act on October 17, 2003. The Company had no operations prior to November 26, 2003. After giving effect to the acquisition described in note 3, the Company completes all forms of civil projects including contract mining, industrial and commercial site development, pipeline and piling installations. The Company is a wholly-owned subsidiary of NACG Preferred Corp. which in turn is a wholly-owned subsidiary of NACG Holdings Inc.

2. Significant accounting policies

a) Basis of presentation:

These consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). Material inter-company transactions and balances are eliminated on consolidation. Material items that could give rise to measurement differences to these consolidated financial statements under United States GAAP are outlined in note 19.

These consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, NACG Finance LLC and North American Construction Group Inc. (“NACGI”), and the following subsidiaries of NACGI:

• North American Caisson Ltd

• North American Construction Ltd

• North American Engineering Ltd

• North American Enterprises Ltd

• North American Industries Inc

• North American Mining Inc

• North American Maintenance Ltd

• North American Pipeline Inc

• North American Road Inc

• North American Services Inc

• North American Site Development Ltd

• North American Site Services Inc

• Griffiths Pile Driving Inc

In preparation for the acquisition described in note 3, effective July 31, 2003, all of the issued common shares of NACGI and North American Equipment Ltd. (“NAEL”) were transferred from Norama Inc. to its new wholly-owned subsidiary, Norama Ltd. (the “Predecessor Company”). The consolidated financial statements of Norama Ltd. are depicted in these financial statements as the Predecessor Company and have been prepared using the continuity of interest method of accounting to reflect the combined carrying values of the assets, liabilities and shareholder’s equity as well as the combined operating results of NAEL and NACGI for all comparative periods presented. The consolidated financial statements for periods ended before November 26, 2003 are not comparable in all respects to the consolidated financial statements for periods ending after November 25, 2003.

The Predecessor Company has been operating continuously in Western Canada since 1953.

F-6

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

b) Use of estimates:

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosures reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

c) Revenue recognition:

The Company performs the majority of its projects under the following types of contracts: time-and-materials; cost-plus-fixed-fee; unit-price; and fixed-price or lump-sum. For time-and-materials and cost-plus-fixed-fee contracts, revenue is recognized as costs are incurred. Revenue from unit-price contracts is recognized based on quantities of units performed and delivered. Revenue on lump-sum contracts is recognized on the percentage-of-completion method, measured by the ratio of costs incurred to date to estimated total costs.

The length of the Company’s contracts varies, but is typically less than one year. Contract project costs include all direct labour, material, subcontractors and equipment costs and those indirect costs related to contract performance such as indirect labour, supplies, and tool costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which such adjustments are determined. Profit incentives are included in revenue when their realization is reasonably assured. Claims are included in revenue when awarded or received.

The asset entitled “unbilled revenue” represents revenue recognized in advance of amounts invoiced.

d) Cash and cash equivalents:

Cash and cash equivalents include cash on hand, bank balances and short-term liquid investments with maturities of three months or less, net of outstanding cheques.

e) Allowance for doubtful accounts:

The Company evaluates the probability of collection of accounts receivable and records an allowance for doubtful accounts, which reduces the receivables to the amount management reasonably believes will be collected. In determining the amount of the allowance, the following factors are considered: the length of time the receivable has been outstanding, specific knowledge of each customer’s financial condition and historical experience.

F-7

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

f) Inventory:

Inventory is carried at the lower of cost, on a first-in, first-out basis, and replacement cost, and primarily consists of job materials and spare component parts.

g) Capital assets:

Capital assets are recorded at cost. Major components of heavy construction equipment in use such as engines, transmissions, and undercarriages are recorded separately as capital assets. Equipment under capital lease is recorded at the present value of minimum lease payments at the inception of the lease. Depreciation is not recorded until an asset is put into service. Depreciation for each category of assets is calculated based on the cost, net of the estimated residual value, over the estimated useful life of the assets on the following bases and annual rates:

Asset	Basis	Rate
Heavy equipment	Straight-line	Operating hours
Major component parts in use	Straight-line	Operating hours
Spare component parts	N/A	N/A
Other equipment	Straight-line	10-20%
Licensed motor vehicles	Declining balance	30%
Office and computer equipment	Straight-line	25%

The cost of period repairs and maintenance is expensed to the extent that the expenditure serves only to restore the asset to its original condition. Any gain or loss resulting from the sale or retirement of capital assets is charged to income in the current period.

h) Goodwill:

Goodwill represents the excess purchase price paid by the Company over the fair value of the tangible and identifiable intangible assets and liabilities acquired. Goodwill is not amortized but instead is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit, including goodwill, is compared with its fair value. When the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered to be impaired and the second step of the impairment test is unnecessary. The second step is carried out when the carrying amount of a reporting unit exceeds its fair value, in which case, the implied fair value of the reporting unit’s goodwill, determined in the same manner as the value of goodwill is determined in a business combination, is compared with its carrying amount to measure the amount of the impairment loss, if any. As of March 31, 2004, no impairment of goodwill has occurred.

i) Intangible assets:

Intangible assets acquired include: customer contracts in progress, which are being amortized based on the net present value of the estimated period cash flows over the remaining lives of the related contracts; trade names, which are being amortized on a straight-line basis over the estimated useful life of 10 years; a non-competition agreement, which is being amortized on a straight-line basis over the five-year term of the agreement; and employee arrangements, which are being amortized on a straight-line basis over the three-year term of the arrangement.

F-8

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

j) Deferred financing costs:

Costs relating to the issuance of the senior notes and the senior secured credit facility have been deferred and are being amortized on a straight-line basis over the terms of the related debt, which are eight years and five years, respectively.

k) Impairment of long-lived assets:

Effective April 1, 2003, the Company has adopted the new recommendations of the CICA Handbook Section 3063, “Impairment or Disposal of Long-Lived Assets” with respect to the measurement and disclosure of the impairment of long-lived assets. This standard requires the recognition of an impairment loss for a long-lived asset to be held and used when changes in circumstances cause its carrying value to exceed the total undiscounted cash flows expected from its use. An impairment loss, if any, is determined as the excess of the carrying value of the assets over its fair value.

l) Foreign currency translation and hedging:

The functional currency of the Company is Canadian dollars. Transactions denominated in foreign currencies are recorded at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities, including long-term debt denominated in U.S. dollars, are translated into Canadian dollars at the rate of exchange prevailing at the balance sheet date.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet. The Company also formally assesses, both at the hedge’s inception and at the end of each quarter, whether the derivatives that are used in hedged transactions are effective in offsetting changes in cash flows of hedged items. Foreign exchange translation gains and losses on foreign currency contracts used to hedge foreign-currency denominated amounts are accrued on the balance sheet as assets or liabilities and are recognized currently in the income statement, offsetting the respective translation gains or losses on the foreign-currency denominated amounts. Realized and unrealized gains or losses associated with derivative instruments, which have been terminated or cease to be effective prior to maturity, are deferred under other current, or non-current, assets or liabilities on the balance sheet and recognized in income in the period in which the underlying hedged transaction is recognized. In the event a designated hedged item is sold, extinguished or matures prior to the termination of the related derivative instrument, any realized or unrealized gain or loss on such derivative instrument is recognized in income.

Derivative financial instruments are utilized by the Company in the management of its foreign currency exposure. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. Derivative financial instruments are subject to standard credit terms and conditions, financial controls, management and risk monitoring procedures.

m) Income taxes:

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.

F-9

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

n) Stock–based compensation plan:

Effective November 26, 2003, the Company adopted the revised CICA Handbook Section 3870, “Stock-Based Compensation” which requires that a fair value method of accounting be applied to all stock-based compensation payments. Under a fair value method (Black-Scholes method), compensation cost is measured at the fair value at the grant date and is expensed over the award’s vesting period.

o) Recent Canadian accounting pronouncements:

(i) Hedging relationships:

In November 2001, the CICA issued Accounting Guideline 13, “Hedging Relationships” (“AcG-13”), and in November 2002, the CICA amended the effective date of the guideline which establishes new criteria for hedge accounting and will apply to all hedging relationships in effect on or after April 1, 2004. To qualify for hedge accounting, the hedging relationship must be appropriately documented at the inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high correlation of changes in fair values or cash flows between the hedged item and the hedging item. The Company has reviewed the requirements of AcG-13 and has determined that all of its current hedges qualify for hedge accounting under the new guideline.

(ii) Consolidation of variable interest entities:

In June 2003, the CICA issued Accounting Guideline 15 “Consolidation of Variable Interest Entities” (“VIEs”) (“AcG-15”). VIEs are entities that have insufficient equity at risk to finance their operations without additional subordinated financial support and/or entities whose equity investors lack one or more of the specified essential characteristics of a controlling financial interest. AcG-15 provides specific guidance for determining when an entity is a VIE and who, if anyone, should consolidate the VIE. The standard is effective on a prospective basis for the Company’s 2005 fiscal year. The adoption of this standard is not expected to have a material impact on the consolidated financial statements.

(iii) Generally accepted accounting principles:

Effective November 26, 2003, the Company adopted CICA Handbook Section 1100, “Generally Accepted Accounting Principles,” which establishes standards for financial reporting in accordance with Canadian GAAP, and describes what constitutes Canadian GAAP and its sources. This section also provides guidance on sources to consult when selecting accounting policies and determining appropriate disclosures when the primary sources of Canadian GAAP are silent. The adoption of this standard is not expected to have a material impact on the consolidated financial statements.

(iv) Revenue recognition:

In December 2003, the Emerging Issues Committee released EIC-141, “Revenue Recognition” which is effective on a prospective basis for the Company’s 2005 fiscal year. EIC-141 incorporates the principles and guidance under U.S. GAAP for revenue recognition. The adoption of this standard is not expected to have a material impact on the consolidated financial statements.

3. Acquisition

On November 26, 2003, NACG Preferred Corp., the parent company, and NACG Acquisition Inc. (“Acquisition”), a wholly-owned subsidiary of the Company, acquired from Norama Ltd. (the “Predecessor Company”) all of the outstanding common shares of North American Construction Group Inc. (“NACGI”). The

F-10

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

Predecessor Company sold 30 shares of NACGI to NACG Preferred Corp. in exchange for $35.0 million of NACG Preferred Corp.’s Series A Preferred Shares. NACG Preferred Corp. then contributed the 30 shares of NACGI to the Company in exchange for common shares. The Company then contributed the 30 shares of NACGI to Acquisition in exchange for common shares. The Predecessor Company sold the remaining 170 shares of NACGI to Acquisition in exchange for approximately $195.5 million in cash including the impact of various post-closing adjustments. In addition, Acquisition acquired substantially all of the capital assets, prepaid expenses and accounts payable of North American Equipment Ltd. (“NAEL”) for $175.0 million in cash. Acquisition and NACGI amalgamated on the same day and the successor company continued as NACGI.

The total purchase price was approximately $230.0 million for the common shares of NACGI and $175.0 million for the capital assets, prepaid expenses and accounts payable of NAEL. The purchase price was subject to an adjustment of $0.5 million based on the closing working capital of NACGI at November 25, 2003 which has been accounted for as increased goodwill. The total consideration payable by NACG Preferred Corp. and Acquisition to the sellers was approximately $405.5 million including the impact of certain post-closing adjustments. Of the cash consideration, $92.5 million came from the cash contribution to Acquisition by the Company that originated from NACG Holdings Inc.’s sale of its equity.

The Company accounted for the acquisition as a business combination using the purchase method. The results of NACGI’s operations have been included in the consolidated financial statements of the Company since November 26, 2003. The following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition:

Current assets, including cash of $19,642	$	83,910
Capital assets, including capital leases of $2,131		176,779
Intangible assets		17,798
Goodwill		198,549
Total assets acquired		477,036
Current liabilities		(40,662	)
Future income taxes		(11,823	)
Capital lease obligations		(2,131	)
Total liabilities assumed		(54,616	)
Net assets acquired	$	422,420

The acquisition was financed as follows:

Proceeds from issuance of senior notes	$	263,000
Proceeds from issuance of share capital		127,500
Proceeds from initial borrowing under the new:
Term credit facility		50,000
Revolving credit facility		—
Less: deferred financing costs		(18,080	)
	$	422,420

F-11

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

The net cash cost of the acquisition is:

Net assets acquired	$	422,420
Less: non-cash portion of share capital		(35,000	)
Less: cash acquired from acquisition and financing		(19,642	)
	$	367,778

The intangible assets relate to customer contracts in progress and related relationships, trade names, a non-competition agreement and employee arrangements and are subject to amortization.

The goodwill was assigned to mining and site preparation, piling and pipeline segments in the amounts of $125,447, $40,349, and $32,753, respectively. None of the goodwill is expected to be deductible for income tax purposes.

Transaction costs of $25.1 million were incurred on the acquisition, $7.0 million of which have been accounted for as increased goodwill and $18.1 million of which have been recorded as deferred financing costs. The deferred financing costs were subject to amortization of $814 during the period ended March 31, 2004.

An amount of $2.9 million payable to the vendors related to the purchase price is included in accounts payable at March 31, 2004.

The current assets include $19,642 in cash acquired, of which $15,623 was surplus cash from the financing. Common shares valued at $35 million were issued in exchange for the NACGI shares acquired from NACG Preferred Corp.

4. Capital assets

March 31, 2004	Cost		Accumulated depreciation		Net book value
Heavy equipment	$	149,704	$	4,444	$	145,260
Major component parts in use		2,260		374		1,886
Spare component parts		395		—		395
Other equipment		10,160		605		9,555
Licensed motor vehicles		10,561		1,049		9,512
Office and computer equipment		1,491		194		1,297
	$	174,571	$	6,666	$	167,905
Predecessor Company March 31, 2003	Cost		Accumulated depreciation		Net book value
Heavy equipment	$	119,006	$	51,726	$	67,280
Major component parts in use		—		—		—
Spare component parts		—		—		—
Other equipment		10,722		4,486		6,236
Licensed motor vehicles		7,371		6,082		1,289
Office and computer equipment		2,865		1,436		1,429
	$	139,964	$	63,730	$	76,234

F-12

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

The above amounts include $3,328 (March 31, 2003 – $12,559) of assets under capital lease and accumulated depreciation of $320 (March 31, 2003 – $1,571) related thereto. During the period November 26, 2003 to March 31, 2004, capital asset additions included $1,195 of assets that were acquired by means of capital leases (April 1, 2003 – November 25, 2003 – $nil; 2003 – $9,439; 2002 – $nil). Depreciation of equipment under capital leases of $320 (April 1, 2003 – November 25, 2003 – $677; 2003 – $765; 2002 – $530) is included in depreciation expense. As at March 31, 2004, capital assets reflect the effects of applying push down accounting due to the acquisition described in note 3.

5. Intangible assets

At March 31, 2004, identifiable intangible assets purchased in the acquisition described in note 3 consisted of the following:

Identifiable intangible assets	Cost		Accumulated amortization		Net book value
Customer contracts in progress and related relationships	$	15,323	$	12,684	$	2,639
Trade names		350		12		338
Non-competition agreement		100		7		93
Employee arrangements		2,025		225		1,800
Balance, March 31, 2004	$	17,798	$	12,928	$	4,870

6. Senior secured credit facility

a) Credit facility:

On November 26, 2003, the Company secured a $120 million senior credit facility with a syndicate of lenders. The facility is comprised of a $70 million revolving credit facility, subject to borrowing base limitations, and a $50 million term credit facility, both of which bear interest at the Canadian prime rate plus 2% or Canadian bankers’ acceptances rate plus 3%. The credit facility is secured by a first priority lien on the Company’s capital stock and the capital stock of its subsidiaries and on substantially all the assets of the Company and its subsidiaries. Concurrent with the acquisition on November 26, 2003 (note 3), a letter of credit in the amount of $10 million was issued to support bonding requirements associated with the Company’s customer contracts. Except for the letter of credit, no amounts were drawn down on the revolving credit facility.

	March 31, 2004		Predecessor Company March 31, 2003
Term credit facility, due November 26, 2008	$	48,500		—
4.5% term debt, due September 2004		—		9,625
Term debt, with maturity dates between July, 2003 and September, 2007, prime plus 0.25%		—		12,501
		48,500		22,126
Less: current portion		7,250		14,601
	$	41,250	$	7,525

F-13

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

The term portion of the credit facility is repayable in quarterly installments over the next five fiscal years as set out below:

2005	$	7,250
2006		11,000
2007		11,000
2008		11,000
2009		8,250
	$	48,500

b) Operating line of credit:

The Predecessor Company had an operating line of credit, authorized to a maximum of $20 million, which was due on demand and bore interest at the lender’s prime rate. The loan was secured by a general security agreement covering all present and after-acquired property held by NACGI and its subsidiaries and the postponement of $2 million advances from Norama Inc. supported by a promissory note. On the date of acquisition described in note 3, the Predecessor Company’s operating line of credit had a balance of nil.

The term bank loans were secured by general security agreements providing a first charge on specific heavy equipment with a carrying value of $27,764 assignment of insurance proceeds and subordination of the advances from the shareholder.

All of the Predecessor Company’s term debt was repaid on the date of acquisition described in note 3.

7. Capital lease obligations

The Company leases a portion of its licensed motor vehicles for which the minimum lease payments due in each of the next four fiscal years are summarized as follows:

	March 31, 2004
2005	$	886
2006		820
2007		778
2008		831
		3,315
Less: amount representing interest—average rate of 5.3%		277
Present value of minimum capital lease payments		3,038
Less: current portion		787
	$	2,251

F-14

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

The Predecessor Company leased a portion of its heavy equipment for which the minimum lease payments due in each of the next three fiscal years would have been as follows:

	Predecessor Company March 31, 2003
2004	$	5,154
2005		3,240
2006		823
		9,217
Less: amount representing interest – prime to prime plus 0.25%		432
Present value of minimum capital lease payments		8,785
Less: current portion		4,842
	$	3,943

8. Senior notes

The senior notes were issued on November 26, 2003 in the amount of US$200 million. These notes mature on December 1, 2011 and bear interest at 8.75% payable semi-annually on June 1 and December 1 of each year. By way of swap agreements, the notes have an effective interest rate of 9.765% for the duration for which the senior notes are outstanding.

The notes are unsecured senior obligations and rank equally with all other existing and future unsecured and unsubordinated debt and senior to all subordinated debt of the Company. The notes are effectively subordinated to all secured debt, including debt under the secured credit facility (note 6(a)), to the extent of the value of the assets securing such debt.

The senior notes are redeemable at the option of the Company, in whole or in part, at any time on or after: December 1, 2007 at 104.375% of the principal amount; December 1, 2008 at 102.188% of the principal amount; December 1, 2009 at 100.00% of the principal amount; plus, in each case, interest accrued to the redemption date.

The foreign exchange exposure relating to the senior notes has been hedged – see note 14(c).

F-15

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

9. Income taxes

Income tax expense (recovery) differs from the amount that would be computed by applying the Federal and provincial statutory income tax rates to income from continuing operations. The reasons for the differences are as follows:

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Statutory rate		35.2	%		36.6	%		38.6	%		41.1	%
Expected provision (recovery) at statutory rate	$	(2,614	)	$	(6,501	)	$	7,377		$	944
Change in future income tax liability, resulting from reduction in future statutory income tax rates		(342	)		(669	)		(700	)		(506	)
Large corporations tax		319			137			245			239
Other		(233	)		411			(302	)		12
Income tax provision (recovery) for current period	$	(2,870	)	$	(6,622	)	$	6,620		$	689

The tax effects of temporary differences that give rise to future income tax liabilities are presented below:

	March 31, 2004			Predecessor Company March 31, 2003
Unbilled revenue and uncertified revenue included in accounts receivable	$	27,906		$	30,900
Accounts receivable – holdbacks		3,838			4,671
Non-capital losses carried forward		(16,649	)		(2,031	)
Difference between tax and carrying basis of capital assets		2,179			29,548
Difference between tax and carrying basis of deferred financing costs		440			(34	)
Intangible assets		4,870			—
Other		550			(271	)
Net temporary differences		23,134			62,783
Tax rate expected to apply		33.6	%		36.6	%
Net future tax liability		7,775			22,975
Less: current portion		5,260			12,300
	$	2,515		$	10,675

F-16

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

10. Share capital

Authorized:

Unlimited number of common voting shares.

Issued:

	Number of Shares	Amount
Outstanding at November 26, 2003	—	$	—
Issued	100		127,500
Redeemed	—		—
Outstanding at March 31, 2004	100	$	127,500

The common shares were issued to NACG Preferred Corp. for cash consideration of $92.5 million and for NACGI shares valued at $35.0 million.

11. Other information

a) Accounts receivable:

	March 31, 2004			Predecessor Company March 31, 2003
Accounts receivable – trade	$	29,991		$	51,328
Accounts receivable – holdbacks		3,838			4,671
Accounts receivable – other		51			775
Allowance for doubtful accounts		(233	)		(152	)
	$	33,647		$	56,622

Reflective of its normal business, a majority of the Company’s accounts receivable is due from large companies operating in the resource sector. The Company regularly monitors the activity and balances in these accounts to manage its credit risk and provides an allowance for any doubtful accounts.

At March 31, 2004, the following customers represented 10% or more of accounts receivable and unbilled revenue:

	March 31, 2004		Predecessor Company March 31, 2003
Customer A	28.7	%	50.1	%
Customer B	43.6	%	25.1	%

F-17

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

“Accounts receivable – holdbacks” represent amounts up to 10% of billing that some of our customers have withheld, as part of common industry practice, until completion of the project. The customer is obligated to retain this amount in a lien fund to ensure that subcontractors are paid and to ensure that any remedial or warranty work is performed.

b) Accounts payable:

	March 31, 2004		Predecessor Company March 31, 2003
Accounts payable – trade	$	23,187	$	28,777
Accounts payable – holdbacks		—		43
	$	23,187	$	28,820

c) Interest expense, net:

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Interest on senior notes	$	9,035		$	—		$	—		$	—
Interest on senior secured credit facility		1,089			599			971			798
Interest on capital lease obligations		56			294			196			15
Interest on advances from Norama Inc.		—			1,468			2,223			2,756
Interest on long-term debt		10,180			2,361			3,390			3,569
Amortization of deferred financing costs		814			—			—			—
Other interest		24			96			783			217
Interest income		(227	)		(100	)		(11	)		(276	)
	$	10,791		$	2,357		$	4,162		$	3,510

F-18

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

d) Supplemental cash flow information:

	For the period November 26, 2003 to March 31, 2004		Predecessor Company
			For the period April 1, 2003 to November 25, 2003		For the year ended March 31, 2003		For the year ended March 31, 2002
Cash paid during the period for
Interest	$	1,736	$	2,431	$	966	$	635
Income taxes		269		325		202		278
Cash received during the period for
Interest		177		100		—		74
Income taxes		18		—		—		—

e) Net change in non-cash working capital:

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Accounts receivable	$	19,556		$	3,338		$	(6,730	)	$	(16,584	)
Unbilled revenue		(17,528	)		15,289			(12,054	)		10,252
Inventory		(1,609	)		—			—			—
Prepaid expenses		(295	)		(544	)		179			(274	)
Accounts payable		(2,839	)		(2,794	)		4,605			7,549
Accrued liabilities		6,172			(1,457	)		2,568			(10,182	)
	$	3,457		$	13,832		$	(11,432	)	$	(9,239	)

12. Segmented information

a) General overview:

The Company conducts business in three business segments: Mining and Site Preparation, Piling and Pipeline.

• Mining and Site Preparation:

The Mining and Site Preparation segment provides mining and site preparation services, including overburden removal and reclamation services, project management and underground utility construction, to a variety of customers throughout Western Canada.

F-19

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

• Piling:

The Piling segment provides deep foundation construction and design build services to a variety of industrial and commercial customers throughout Western Canada.

• Pipeline:

The Pipeline segment provides both small and large diameter pipeline construction and installation services to energy and industrial clients throughout Western Canada.

b) Results by business segment:

For the period November 26, 2003 to March 31, 2004	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	53,407	$	9,565	$	64,642	$	127,614
Depreciation of capital assets		3,116		465		383		3,964
Segment profits		8,154		2,501		12,892		23,547
Segment assets		264,822		76,896		68,751		410,469
Expenditures for segment capital assets		61		30		1,671		1,762
Predecessor Company For the period April 1, 2003 to November 25, 2003	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	182,685	$	39,368	$	28,866	$	250,919
Depreciation of capital assets		3,590		1,256		158		5,004
Segment profits		27,801		8,318		5,054		41,173
Segment assets		78,564		31,792		15,904		126,260
Expenditures for segment capital assets		2,458		417		—		2,875
Predecessor Company For the year ended March 31, 2003	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	245,235	$	61,006	$	37,945	$	344,186
Depreciation of capital assets		5,631		2,111		184		7,926
Segment profits		31,415		12,483		6,300		50,198
Segment assets		89,501		29,289		24,670		143,460
Expenditures for segment capital assets		26,546		4,422		—		30,968
Predecessor Company For the year ended March 31, 2002	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	186,141	$	35,132	$	28,078	$	249,351
Depreciation of capital assets		7,355		1,568		136		9,059
Segment profits		30,921		8,108		6,111		45,140
Segment assets		65,271		26,771		15,386		107,428
Expenditures for segment capital assets		5,386		74		—		5,460

F-20

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

c) Reconciliations:

(i) Income (loss) before income taxes:

	For the period November 26, 2003 to March 31, 2004			Predecessor Company
				For the period April 1, 2003 to November 25, 2003			For the year ended March 31, 2003			For the year ended March 31, 2002
Total profit for reportable segments	$	23,547		$	41,173		$	50,198		$	45,140
Unallocated corporate expenses		(29,911	)		(51,344	)		(24,559	)		(30,999	)
Unallocated equipment costs		(1,062	)		(7,592	)		(6,530	)		(11,843	)
Income (loss) before income taxes	$	(7,426	)	$	(17,763	)	$	19,109		$	2,298

(ii) Total assets:

	March 31, 2004		Predecessor Company March 31, 2003
Total assets for reportable segments	$	410,469	$	143,460
Corporate assets		78,920		14,473
Total assets	$	489,389	$	157,933

All of the Company’s assets are located in Western Canada and the activities are carried out throughout the year.

d) Customers:

The following customers accounted for 10% or more of total revenues:

	For the period November 26, 2003 to March 31, 2004		Predecessor Company
			For the period April 1, 2003 to November 25, 2003		For the year ended March 31, 2003		For the year ended March 31, 2002
Customer A	50.8	%	11.5	%	11.0	%	11.2	%
Customer B	10.7	%	9.1	%	14.6	%	22.7	%
Customer C	—		0.2	%	1.0	%	13.6	%
Customer D	27.0	%	64.4	%	64.1	%	37.6	%

F-21

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

This revenue by major customer was earned in all three business segments: mining and site preparation, pipeline and piling.

13. Related party transactions

All related party transactions described below are measured at the exchange amount of consideration established and agreed to by the related parties; all transactions are in the normal course of operations.

a) Transactions with Sponsors:

On November 21, 2003, The Sterling Group, L.P. (“Sterling”), Genstar Capital, L.P., Perry Strategic Capital Inc., and Stephens Group, Inc., (the “Sponsors”), entered into an agreement with NACG Holdings Inc. and certain of its subsidiaries, including the Company. Pursuant to this agreement, the Sponsors provided consulting and advisory services with respect to the organization of the companies, the structuring of the acquisition described in note 3, employee benefit and compensation arrangements and other matters. The agreement also provides that each of the companies, jointly and severally, will indemnify the Sponsors against liabilities relating to their services. As compensation for these services, the Company paid, at the closing of the transactions, a one-time transaction fee of US$3.0 million to Sterling and a one-time transaction fee of US$3.0 million that was shared among the Sponsors and BNP Paribas Private Capital Group on a pro rata basis in accordance with their respective equity commitments to NACG Holdings Inc. In addition, the Company paid US$486,000 to reimburse the Sponsors and BNP Paribas Private Capital Group for their travel and other expenses incurred in connection with the transactions. In accordance with the terms of the agreement, at the closing of the transactions, the Company paid to the Sponsors a pro-rated advisory fee for the period from closing until March 31, 2004 totaling $133. In addition, as compensation for the services provided by the Sponsors after the closing of the transactions, the agreement provides that on each June 30 through June 30, 2013, the Company will pay the Sponsors whose services have not terminated in accordance with the agreement, as a group, an annual advisory fee in cash totaling the greater of $400 and 0.5% of the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the previous twelve month period ended March 31 as defined in the agreement.

b) Office rent:

Pursuant to several office lease agreements, for the period from November 26, 2003 to March 31, 2004 the Company paid $231 (April 1, 2003 – November 25, 2003 – $427; 2003 – $513; 2002 – $480) to a company owned, indirectly and in part, by one of the Directors. The office lease agreements were in effect prior to the acquisition described in note 3.

c) Predecessor company transactions:

Norama Inc., the parent company of Norama Ltd., charged a fee for management services provided to NACGI. The management fee was paid in reference to taxable income. The advances from Norama Inc. were interest bearing at prime plus 2% without any fixed terms of repayment.

14. Financial instruments

The Company is exposed to market risks related to interest rate and foreign currency fluctuations. To mitigate these risks, the Company uses derivative financial instruments such as foreign currency swap contracts.

a) Fair value:

The fair values of the Company’s cash and cash equivalents, accounts receivable, outstanding cheques and accounts payable and accrued liabilities approximate their carrying amounts.

F-22

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

The fair value of the senior credit facility, senior notes and capital lease obligations (collectively “the debt”) are based on management estimates which are determined by discounting cash flows required under the debt at the interest rate currently estimated to be available for loans with similar terms. Based on these estimates, the fair value of the Company’s debt as at March 31, 2004 is not significantly different than its carrying value.

b) Interest rate risk:

The Company is subject to interest rate risk on the senior credit facility and capital lease obligations. At March 31, 2004, for each 1% annual fluctuation in the interest rate, the annual cost of financing will change by approximately $470.

The Company also leases equipment (as described in note 15) with a variable lease payment component that is tied to prime rates. At March 31, 2004, for each 1% annual fluctuation in these rates, annual lease expense will change by approximately $88.

c) Foreign currency risk and derivative financial instruments:

The Company has senior notes denominated in U.S. dollars in the amount of US$200 million. In order to reduce its exposure to changes in the U.S. to Canadian dollar exchange rate, the Company, concurrent with the closing of the acquisition on November 26, 2003, entered into a cross currency swap agreement to hedge this foreign currency exposure and buy U.S. dollars for both the principal balance due on December 1, 2011 as well as the semi-annual interest payments through the whole period beginning from the issuance date to the maturity date. As part of the cross currency swap agreement, the Company also entered into a U.S. dollar interest rate swap and a Canadian dollar interest rate swap with the net effect of converting the 8.75% rate payable on the senior notes into a fixed rate of 9.765% for the duration that the senior notes are outstanding. Each period, an amount equal to the gain or loss resulting on the remeasurement of the hedged item at spot rates is recorded as an offset to the foreign currency gains or losses otherwise recorded.

The carrying amount and fair value of the Company’s derivative financial instruments as at March 31, 2004 are as follows:

	Carrying amount		Fair value
Cross currency and interest rate swaps—liability	$	740	$	11,266

At March 31, 2004, the notional principal amount of the cross-currency swap was US$200 million. The notional principal amounts of the interest rate swaps were US$200 million.

d) Operating leases:

The Company is subject to foreign currency risk on U.S. dollar operating lease commitments as the Company has not entered into a cross currency swap agreement to hedge this foreign currency exposure.

F-23

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

15. Commitments

The future minimum lease payments in respect of operating leases amount to approximately $4,960. Annual payments in the next five fiscal years are:

2005	$	2,977
2006		847
2007		665
2008		463
2009		8
	$	4,960

16. Employee contribution plans

The Company and its subsidiaries match voluntary contributions made by the employees to their Registered Retirement Savings Plans to a maximum of 3% of base salary for each employee. Contributions made by the Company during the period November 26, 2003 to March 31, 2004 were $68 (April 1, 2003 – November 2003 – $122; 2003 – $166; 2002 – $123).

17. Stock-based compensation plan

Under the 2004 Share Option Plan, Directors, Officers, employees and service providers to the Company are eligible to receive stock options to acquire common shares in NACG Holdings Inc. The stock options expire in ten years or on termination of employment. Options may be exercised at a price determined at the time the option is awarded, and vest as follows: no options vest on the award date and twenty per cent vest on each of the five following award date anniversaries. The maximum number of common shares issuable under this plan may not exceed 92,500, of which 38,370 are still available for issue as at March 31, 2004. On January 28, 2004, NACG Holdings Inc. granted options to purchase 54,130 common shares. As at March 31, 2004, none of these stock options were exercisable. No stock options were granted by the Predecessor Company.

The fair value of each option granted by NACG Holdings Inc. was estimated using the Black-Scholes option-pricing model assuming: a dividend yield of nil%; a risk-free interest rate of 4.79%; volatility of nil%; and an expected option life of 10 years.

The stock options outstanding at March 31, 2004 are as follows:

	Number of options	Weighted average exercise price $ per share
Outstanding at November 26, 2003	—
Granted	54,130	100.00
Exercised	—
Forfeited	—
Outstanding at March 31, 2004	54,130	100.00

The Company recorded $137 of compensation expense related to the stock options in 2004 (2003 – $nil) with such amount being credited to contributed surplus.

F-24

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

18. Comparative figures

Certain of the comparative figures have been reclassified to be consistent with the current period’s presentation.

19. United States generally accepted accounting principles

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”) which differ in certain respects from accounting principles generally accepted in the United States (“U.S. GAAP”). For the periods presented herein, material issues that could give rise to measurement differences in the consolidated financial statements are as follows:

During the period ended March 31, 2004 the Company entered into a series of derivatives that have been designated as a hedge of the risk of changes in cash flows resulting from the impact of changes in the U.S. to Canadian dollar exchange rate applicable to the payments of interest and principal on the senior notes. In accordance with the provisions of SFAS 133 “Accounting for Derivatives and Hedging Activities,” all derivatives are recognized as assets and liabilities on the balance sheet and measured at fair value. As of March 31, 2004, the fair value of the derivatives was $11,266. The Company has elected to measure and assess effectiveness based on total changes in the cash flows generated by hedging instruments. Each period, an amount equal to the gain or loss resulting on the remeasurement of the hedged item at spot rates is reclassified from Other Comprehensive Income and recorded as an offset to the foreign currency gains or losses otherwise recorded. In addition, the Company reclassifies an amount to reflect the cost element of the hedging instrument. During the period ended March 31, 2004, $1,132 (net of tax of $573) was reclassified from Other Comprehensive Income and included in income.

Consolidated Statement of Other Comprehensive Income:

Net loss in accordance with Canadian and U.S. GAAP	$	(4,556	)
Net loss on cash flow hedges, net of tax of $3,785		(7,481	)
Less: reclassification adjustments, net of tax of $573		1,132
Comprehensive loss in accordance with U.S. GAAP	$	(10,905	)

Recent United States accounting pronouncements:

In December 2003, the U.S. Financial Accounting Standards Board, or FASB issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“VIE”), which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46R”), which was issued in January 2003. The Company is required to apply FIN 46R to variable interests in Variable Interest Entities, or VIEs created after December 31, 2003. With respect to entities that do not qualify to be assessed for consolidation based on voting interests, FIN 46R generally requires a company that has a variable interest(s) that will absorb a majority of the VIE’s expected losses if they occur, receive a majority of the entity’s expected residual returns if they occur, or both, to consolidate that VIE. For variable interests in VIEs created before January 1, 2004, the Interpretation will be applied beginning on January 1, 2005. For any VIEs that must be consolidated under FIN 46R that were created before January 1, 2004, the assets, liabilities and noncontrolling interests of the VIE initially would be measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46R first applies may be used to measure the assets, liabilities and noncontrolling interest of the VIE. The adoption of this standard did not have a material impact on these financial statements.

F-25

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Consolidated Financial Statements

For the period November 26, 2003 to March 31, 2004

(Amounts in thousands of Canadian dollars unless otherwise specified)

FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, was issued in May 2003. This Statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The Statement also includes required disclosures for financial instruments within its scope. For the Company, the Statement will be effective as of January 1, 2004, except for mandatorily redeemable financial instruments. For certain mandatorily redeemable financial instruments, the Statement will be effective for the Company on January 1, 2005. The effective date has been deferred indefinitely for certain other types of mandatorily redeemable financial instruments. The Company currently does not have any financial instruments that are within the scope of this Statement.

20. Supplemental Guarantor Information

In connection with the acquisition (note 3), the Company issued U.S.$200 million in senior unsecured notes due on December 1, 2011. The Company has not presented separate financial statements and other disclosures concerning the guarantor subsidiaries because the Company has no independent assets or operations and all of the Company’s wholly owned subsidiaries fully and unconditionally guarantee the senior notes on a joint and several basis.

F-26

AUDITORS’ REPORT

To The Board of Directors of Norama Ltd.

We have audited the consolidated balance sheets of Norama Ltd. as at March 31, 2002 and 2003 and the consolidated statements of earnings and retained earnings and cash flows for each of the years in the three-year period ended March 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and United States generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2002 and 2003 and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2003 in accordance with Canadian generally accepted accounting principles.

Accounting principles generally accepted in Canada vary in certain significant respects from accounting principles generally accepted in the United States. Application of accounting principles generally accepted in the United States would have affected the Company’s financial statements for the years ended March 31, 2001, 2002 and 2003 to the extent summarized in note 18 to the consolidated financial statements.

Signed “KPMG LLP”

Chartered Accountants

Edmonton, Canada

May 30, 2003, except as to notes 17 and 18 which are as of October 17, 2003.

F-27

NORAMA LTD.

CONSOLIDATED BALANCE SHEETS

	March 31,
	2002		2003
	(In thousands of Canadian dollars)
Assets
Current assets:
Cash and cash equivalents	$	436	$	651
Accounts receivable		50,034		56,622
Unbilled revenue		12,723		24,777
Prepaid expenses		479		300
		63,672		82,350
Capital assets (note 4)		56,759		76,234
	$	120,431	$	158,584
Liabilities and Shareholder’s Equity
Current liabilities:
Outstanding cheques	$	4,245	$	3,147
Operating loan (note 5)		748		516
Accounts payable		24,215		28,820
Accrued liabilities		7,855		10,423
Current portion of term bank loans (note 6)		13,906		14,601
Current portion of capital lease obligations (note 7)		1,514		4,842
Future income taxes (note 8)		7,100		12,300
Current portion of advances from Norama Inc. (note 9(b))		6,000		3,100
		65,583		77,749
Term bank loans (note 6)		—		7,525
Capital lease obligations (note 7)		890		3,943
Future income taxes (note 8)		9,500		10,675
Advances from Norama Inc. (note 9(b))		27,079		28,874
Shareholder’s equity:
Share capital (note 10)		1		1
Retained earnings		17,378		29,817
		17,379		29,818
Change in accounting policy (note 3)
Contingencies (note 11)
Commitments (note 15)
Subsequent event (note 17)
United States generally accepted accounting principles (note 18)
	$	120,431	$	158,584

See accompanying notes to consolidated financial statements.

F-28

NORAMA LTD.

CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

	Year ended March 31,
	2001			2002			2003
	(In thousands of Canadian dollars)
Revenue	$	247,267		$	249,351		$	344,186
Project costs		120,728			127,996			219,979
Equipment costs		71,518			77,289			72,228
Depreciation		10,409			11,299			10,974
		202,655			216,584			303,181
Gross Profit		44,612			32,767			41,005
General and administrative		9,582			12,794			12,233
Gain on sale of capital assets		(979	)		(218	)		(2,265	)
Operating income		36,009			20,191			31,037
Management fees		36,550			14,400			8,000
Interest expense, net		3,034			3,510			4,162
Foreign exchange (gain) loss		—			(17	)		(234	)
		39,584			17,893			11,928
Income (loss) before income taxes		(3,575	)		2,298			19,109
Income taxes (note 8):
Current income taxes		219			239			245
Future income taxes (recovery)		(3,886	)		450			6,375
		(3,667	)		689			6,620
Net earnings		92			1,609			12,489
Dividends paid		—			(1,000	)		(50	)
Retained earnings, beginning of period		16,677			16,769			17,378
Retained earnings, end of period	$	16,769		$	17,378		$	29,817

See accompanying notes to consolidated financial statements.

F-29

NORAMA LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended March 31,
	2001			2002			2003
	(In thousands of Canadian dollars)
Cash provided by (used in):
Operating activities (note 14):
Net earnings (loss)	$	92		$	1,609		$	12,489
Adjustments for:
Depreciation		10,409			11,299			10,974
Gain on sale of capital assets		(979	)		(218	)		(2,265	)
Future income taxes (recovery)		(3,886	)		450			6,375
Bad debt expense (recovery)		202			274			142
Net changes in non-cash operating working capital (note 12(d))		(5,293	)		(9,239	)		(11,432	)
		545			4,175			16,283
Investing activities:
Acquisition of capital assets		(18,547	)		(8,668	)		(22,932	)
Proceeds on disposal of capital assets		4,172			2,204			4,187
		(14,375	)		(6,464	)		(18,745	)
Financing activities:
Increase (decrease) in outstanding cheques		150			(2,981	)		(1,098	)
Advances of term bank loan		2,395			8,003			13,500
Repayment of term bank loans		(9,095	)		(5,614	)		(5,280	)
Net increase (decrease) in operating line of credit		—			748			(232	)
Repayments of capital lease obligations		(1,170	)		(1,250	)		(3,058	)
Advances from (to) Norama Inc.		30,873			(6,428	)		(1,105	)
Dividends paid		—			(1,000	)		(50	)
		23,153			(8,522	)		2,677
Increase (decrease) in cash		9,323			(10,811	)		215
Cash, beginning of period		1,924			11,247			436
Cash, end of period	$	11,247		$	436		$	651

See accompanying notes to consolidated financial statements.

F-30

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

1. Nature of operations:

Norama Ltd. has been operating continuously in western Canada since 1953. The Company completes all forms of earth works projects including contract mining, industrial and commercial site preparation, pipeline and piling installation, underground water and sewer installation and road building.

While most of the Company’s activities are carried out throughout the year, the pipeline sector is seasonal with most of its activity occurring mid-November to April.

2. Significant accounting policies:

(a) Basis of presentation:

Pursuant to a corporate reorganization, effective July 31, 2003, all the issued common shares of North American Equipment Ltd. (“NAEL”) and North American Construction Group Inc. (“NACGI”) were transferred from Norama Inc. to its new wholly-owned subsidiary, Norama Ltd. The financial statements of Norama Ltd. have been prepared using the continuity of interest method of accounting. Accordingly, the consolidated financial statements of Norama Ltd. reflect the combined carrying values of the assets, liabilities and shareholder’s equity, and the combined operating results of NAEL and NACGI for all periods presented.

The consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). Material items that could give rise to measurement differences to these consolidated financial statements under United States GAAP are outlined in note 18. The consolidated financial statements include the accounts of Norama Ltd. and its wholly-owned subsidiary companies, NACGI and NAEL. Material inter-company transactions and balances are eliminated on consolidation.

The subsidiaries of NACGI are as follows:

• North American Caisson Ltd.

• North American Construction Ltd.

• North American Engineering Inc.

• North American Enterprises Ltd.

• North American Industries Inc.

• North American Maintenance Ltd.

• North American Mining Inc.

• North American Pipeline Inc.

• North American Road Inc.

• North American Services Inc.

• North American Site Development Ltd.

• North American Site Services Inc.

• Griffiths Pile Driving Inc.

(b) Use of estimates:

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities.

F-31

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

(c) Capital assets:

Capital assets are recorded at cost. Property under capital lease is initially recorded at the present value of minimum lease payments at the inception of the lease. Depreciation is not recorded until the equipment is put into service. Depreciation for each category of assets is calculated on the following basis and annual rates:

Asset	Basis	Rate
Heavy equipment, including those under capital lease	Straight-line	Operating hours
Other equipment	Declining balance	20	%
Licensed motor vehicles	Declining balance	30	%
Office and computer equipment	Straight-line	25	%

The cost of period repair and maintenance is expensed to the extent that the expenditure serves only to restore the asset to its original condition.

(d) Revenue recognition:

The Company performs the majority of its projects either on a time-and-materials, cost plus a fixed fee, or on a unit price basis. For time-and-materials and cost plus a fixed fee contracts, revenue is recognized as costs are incurred. Revenue from unit price contracts is recognized as earned based on quantities completed. Revenue on lump-sum contracts is recognized on the percentage-of-completion method, measured by the ratio of costs incurred to date to estimated total costs.

The length of the Company’s contracts varies, but is typically less than one year. Contract costs include all direct material, subcontractors, labour, and equipment costs and those indirect costs related to contract performance such as indirect labour, supplies, and tool costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which such adjustments are determined. Profit incentives are included in revenue when their realization is reasonably assured. Claims are included in revenue when awarded or received.

The asset entitled “unbilled revenue” represents revenue recognized in advance of amounts invoiced.

(e) Income taxes:

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.

(f) Impairment of long-lived assets:

Effective April 1, 2003, the Company has prospectively adopted the new recommendations of the CICA Handbook Section 3063, Impairment of Long-lived Assets, with respect to the measurement and disclosure of

F-32

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

the impairment of long-lived assets. This standard requires the recognition of an impairment loss for a long-lived asset to be held and used when changes in circumstances cause its carrying value to exceed the total undiscounted cash flows expected from its use. An impairment loss, if any, is determined as the excess of the carrying value of the assets over its fair value.

(g) Cash and cash equivalents:

Cash and cash equivalents include cash on account, demand deposits and short-term investments with original maturities of less than three months.

(h) Allowance for doubtful accounts:

The Company evaluates the collectibility of accounts receivable and records an allowance for doubtful accounts, which reduces receivables to the amount management reasonably believes will be collected. A specific allowance is recorded against customer receivables that are considered to be impaired based on the Company’s knowledge of the financial condition of its customers. In determining the amount of the allowance, the following factors are considered: the length of time the receivables have been outstanding, customer and industry concentrations, current business environment, and historical experience.

3. Change in accounting policy:

In December 2002, the Accounting Standards Board of the Canadian Institute of Chartered Accountants issued Handbook Section 3063, Impairment of Long-Lived Assets (“Section 3063”). Section 3063 supersedes the write-down and disposal provisions of Section 3061, Property, plant and equipment. Under Section 3063, long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the assets might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the asset (or asset group) is compared with its recoverable amount. The carrying amount of a long-lived asset is not recoverable if the carrying amount exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. The second step is carried out when the carrying amount of a long-lived asset is not recoverable, in which case the fair value of the long-lived asset is compared with its carrying amount to measure the amount of the impairment loss, if any. When an impairment loss is recognized, it is presented in income from operations in the income statement. When quoted market prices are not available, the fair value of the long-lived assets is determined using the discounted estimated future cash flow method.

The Company has adopted Section 3063, effective April 1, 2003. In accordance with the requirements of Section 3063, this change in accounting policy has been applied prospectively and the amounts presented for prior periods have not been restated for this change.

F-33

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

4. Capital assets:

March 31, 2002	Cost		Accumulated depreciation		Net book value
Heavy equipment	$	89,859	$	46,245	$	43,614
Heavy equipment under capital lease		5,136		1,662		3,474
Other equipment		10,026		3,583		6,443
Licensed motor vehicles		7,743		6,058		1,685
Office and computer equipment		2,546		1,003		1,543
	$	115,310	$	58,551	$	56,759
March 31, 2003	Cost		Accumulated depreciation		Net book value
Heavy equipment	$	106,447	$	50,155	$	56,292
Heavy equipment under capital lease		12,559		1,571		10,988
Other equipment		10,722		4,486		6,236
Licensed motor vehicles		7,371		6,082		1,289
Office and computer equipment		2,865		1,436		1,429
	$	139,964	$	63,730	$	76,234

During the year ended March 31, 2003, capital asset additions included $9,439 (all other periods—$nil) of assets which were acquired by means of capital leases.

5. Operating line of credit:

The operating line of credit, authorized to a maximum of $20 million, is due on demand and bears interest at the lender’s prime rate. The loan is secured by a general security agreement covering all present and after-acquired property held by NACGI and its subsidiaries and the postponement of $2 million in advances from shareholder supported by a promissory note.

F-34

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

6. Term bank loans:

		March 31,
Interest rate	Maturity dates	2002		2003
Prime plus 0.25%	May, 2002	$	87	$	—
Prime plus 0.25%	December, 2002		65		—
Prime plus 0.25%	January, 2003		181		—
Prime plus 0.25%	July, 2003		133		33
Prime plus 0.25%	October, 2003		119		44
Prime plus 0.25%	November 2003		183		73
Prime plus 0.25%	July, 2004		303		173
Fixed at 4.51%	September, 2004		—		9,625
Prime plus 0.25%	October, 2004		4,133		2,533
Prime plus 0.25%	April, 2005		370		250
Prime plus 0.25%	October, 2006		2,750		2,150
Prime plus 0.25%	November, 2006		4,584		3,583
Prime plus 0.25%	December, 2006		—		1,266
Prime plus 0.25%	August, 2007		998		883
Prime plus 0.25%	September, 2007		—		1,513
			13,906		22,126
Less current portion			13,906		14,601
		$	—	$	7,525

The term bank loans are secured by general security agreements providing a first charge on specific heavy equipment with a carrying value of $27,764 (2002—$8,809), assignment of insurance proceeds and subordination of the advances from the shareholder.

Of the loans, $12,501 is due on demand at March 31, 2003. Assuming the debt will not be demanded, principal repayment due in each of the next twelve-month periods are as follows:

	March 31, 2003
2004	$	7,251
2005		5,474
2006		5,301
2007		3,908
2008		192
	$	22,126

F-35

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

7. Capital lease obligations:

		March 31,
Interest rate	Maturity dates	2002		2003
Prime	February, 2003	$	565	$	—
Prime	March, 2003		602		—
Prime plus 0.25%	August, 2003		—		134
Prime plus 0.25%	August, 2003		—		125
Prime plus 0.25%	July, 2004		—		617
Prime plus 0.25%	August, 2004		—		983
Prime plus 0.25%	August, 2004		—		983
Prime plus 0.25%	September, 2004		—		1,051
Prime	February, 2005		1,237		889
Prime plus 0.25%	August, 2005		—		943
Prime plus 0.25%	September, 2005		—		3,060
			2,404		8,785
Less current portion			1,514		4,842
		$	890	$	3,943

Minimum lease payments due in each of the next twelve-month periods are as follows:

	March 31, 2003
2004	$	5,154
2005		3,240
2006		823
		9,217
Less amount representing interest		(432	)
Present value of minimum capital lease payments	$	8,785

8. Income taxes:

Income tax expense (recovery) differs from the amount that would be computed by applying the Federal and provincial statutory income tax rates to income from continuing operations. The reasons for the differences are as follows:

	Year ended March 31,
	2001			2002			2003
Statutory rate		44.4	%		41.1	%		38.6	%
Expected provision at statutory rate	$	(1,588	)	$	944		$	7,377
Change in future income tax liability, resulting from reduction in future statutory income tax rates		(2,302	)		(506	)		(700	)
Large corporations tax		219			239			245
Other		4			12			(302	)
Income tax provision for current period	$	(3,667	)	$	689		$	6,620

F-36

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

The tax effects of temporary differences that give rise to future income tax liabilities as at March 31 are presented below:

	March 31,
	2002			2003
Uncertified revenue included in accounts receivable	$	2,470		$	6,123
Unbilled revenue		12,723			24,777
Accounts receivable—holdbacks		4,343			4,671
Accounts payable—holdbacks		(936	)		(43	)
Net book value of capital assets		56,759			76,234
Undepreciated capital cost of capital assets		(31,326	)		(46,686	)
Cumulative eligible capital		(36	)		(33	)
Non-capital tax losses carried forward		(477	)		(2,031	)
Financing fees		—			(34	)
Other		—			(195	)
Net temporary differences		43,520			62,783
Tax rate expected to apply		38.1	%		36.6	%
Net future tax liability		16,600			22,975
Less current portion		7,100			12,300
	$	9,500		$	10,675

9. Related party transactions:

All related party transactions described below are measured at the exchange amount of consideration established and agreed to by the related parties and all transactions described below are in the normal course of operations.

(a) Office rent:

Pursuant to a five year lease agreement which expires in November, 2007, the Company paid office rent of $520 (2002—$480) to Norama Inc. This net amount is a component of general and administrative expenses.

(b) Advances from Norama Inc.:

The advances from Norama Inc. bear interest at prime plus 2%, are secured by a debenture and by a general security agreement (see also note 6) and are without fixed terms of repayment. The Company expects to repay $3,100 to Norama Inc. in fiscal 2004.

(c) Management services:

Norama Inc. charges a fee for management services provided to the Company and its subsidiaries. The management fee represents a distribution of profits to the shareholder with the net result that no current taxes are payable in the Company.

F-37

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

(d) Aviation services:

The Company paid Norama Air Inc., a company under common control, for aviation services amounting to $185 (2002—$nil).

10. Share capital:

Authorized:

Unlimited number of common voting shares

Issued:

	Number of shares	Amount
Balance, March 31, 2002 and 2003	100	$	1

11. Contingencies:

North American Enterprises Ltd. entered into an alliance partnership with a major customer in Northern Alberta. A portion of the fee earned on the contract may be repayable if the alliance does not meet certain project cost targets. The Company has completed approximately 90% of the project within its budgeted target costs and recognized revenues of $35,209 (2002—20%) with revenues of $7,546). Management does not believe that any amounts will have to be repaid.

12. Other information:

(a) Accounts receivable:

	March 31,
	2002			2003
Accounts receivable—trade	$	42,916		$	51,328
Accounts receivable—holdbacks		4,343			4,671
Accounts receivable—other		3,049			775
Allowance for doubtful accounts		(274	)		(152	)
	$	50,034		$	56,622

“Accounts receivable – holdbacks” represent amounts up to 10% of billing that some of our customers have withheld, as part of common industry practice, until completion of the project. The customer is obligated to retain this amount in a lien fund to ensure that subcontractors are paid and to ensure that any remedial or warranty work is performed.

F-38

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

(b) Accounts payable:

	March 31,
	2002		2003
Accounts payable—trade	$	23,279	$	28,777
Accounts payable—holdbacks		936		43
	$	24,215	$	28,820

(c) Reflective of its normal business, a majority of the Company’s accounts receivable are due from large companies operating in the resource sector. The Company regularly monitors the activity and balances in these accounts to manage its credit risk and provides an allowance for any doubtful accounts. At year end, one customer represented 50% (2002—47%), of accounts receivable and unbilled revenue.

(d) Net change in non-cash working capital:

	Year ended March 31,
	2001			2002			2003
Accounts receivable	$	(11,088	)	$	(16,584	)	$	(6,730	)
Unbilled revenue		(6,931	)		10,252			(12,054	)
Prepaid expenses		(205	)		(274	)		179
Accounts payable		7,302			7,549			4,605
Accrued liabilities		5,629			(10,182	)		2,568
	$	(5,293	)	$	(9,239	)	$	(11,432	)

13. Financial instruments:

(a) Fair value:

The fair values of the Company’s cash, accounts receivable, outstanding cheques and accounts payable and accrued liabilities approximate their carrying amounts.

The fair value of the operating loan, bank loans and capital lease obligations (collectively “the debt”) are based on management estimates which are determined by discounting cash flows required under the debt at the interest rate currently estimated to be available for loans with similar terms. Based on these estimates, the fair value of the Company’s debt as at March 31, 2003 is not significantly different than its carrying value.

The fair value of the advances from the shareholder is not determinable.

(b) Interest rate risk:

The Company is subject to interest rate risk on the operating loan, bank loans, capital lease obligations and the advances from the shareholder. For each 1% annual fluctuation in the interest rate, the cost of financing will change by approximately $634.

The Company also leases equipment (as described in note 15) with a variable lease payment component that is tied to prime rates. For each 1% annual fluctuation in these rates, lease expense will change by approximately $271.

F-39

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

14. Supplemental cash flow information:

	Year ended March 31,
	2001			2002			2003
Cash paid during the year for:
Interest	$	2,285		$	635		$	966
Income taxes		216			278			202
Interest received		(91	)		(74	)		—
	$	2,410		$	839		$	1,168

15. Commitments:

The future minimum lease payments in respect of heavy equipment operating leases amount to approximately $10,844 of which $7,899 is payable in 2004 with the balance payable 2005.

16. Segmented information:

(a) General overview:

The Company conducts business in three business segments: Mining and Site Preparation, Piling and Pipeline.

• Mining and Site Preparation:

The Mining and Site Preparation segment provides mining and site preparation services, including overburden removal and reclamation services, project management and underground utility construction, to a variety of customers throughout Western Canada.

• Piling:

The Piling segment provides deep foundation construction and design build services to a variety of industrial and commercial customers throughout Western Canada.

• Pipeline:

The Pipeline segment provides both small and large diameter pipeline construction and installation services to energy and industrial clients throughout Western Canada.

F-40

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

(b) Results by business segment:

Year ended March 31, 2001	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	153,152	$	36,709	$	57,406	$	247,267
Depreciation of capital assets		7,575		1,184		226		8,985
Segment profits		22,088		9,598		10,208		41,894
Segment assets		67,560		19,456		19,257		106,273
Expenditures for segment capital assets		5,248		10,925		23		16,196
Year ended March 31, 2002	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	186,141	$	35,132	$	28,078	$	249,351
Depreciation of capital assets		7,355		1,568		136		9,059
Segment profits		30,921		8,108		6,111		45,140
Segment assets		65,271		26,771		15,386		107,428
Expenditures for segment capital assets		5,386		74		—		5,460
Year ended March 31, 2003	Mining & Site Preparation		Piling		Pipeline		Total
Revenues from external customers	$	245,235	$	61,006	$	37,945	$	344,186
Depreciation of capital assets		5,631		2,111		184		7,926
Segment profits		31,415		12,483		6,300		50,198
Segment assets		89,501		29,289		24,670		143,460
Expenditures for segment capital assets		26,546		4,422		—		30,968

(c) Reconciliations:

(i) Income (loss) before taxes:

	Year ended March 31,
	2001			2002			2003
Total profit for reportable segments	$	41,894		$	45,140		$	50,198
Unallocated corporate expenses		(49,178	)		(30,999	)		(24,559	)
Unallocated equipment revenues (costs)		3,709			(11,843	)		(6,530	)
Income (loss) before income taxes	$	(3,575	)	$	2,298		$	19,109

F-41

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

(ii) Total assets:

	March 31,
	2002		2003
Total assets for reportable segments	$	107,428	$	143,460
Corporate assets		13,003		15,124
Total enterprise assets	$	120,431	$	158,584

All of the Company’s assets are located in Western Canada.

(d) The following customers accounted for 10% or more of total revenues:

	Year ended March 31,
	2001		2002		2003
Customer A	16.8	%	11.2	%	11.0	%
Customer B	26.9	%	22.7	%	14.6	%
Customer C	23.1	%	13.6	%	—
Customer D	16.1	%	37.6	%	64.1	%

This revenue by major customer was earned in all three business segments: Mining and Site Preparation, Pipeline and Piling.

17. Subsequent event:

Effective July 18, 2003, the Company’s beneficial shareholders entered into an agreement that will effectively result in the Company disposing of all of its assets and business. Proceeds on the sale are anticipated to exceed the carrying value of the Company’s net assets.

18. United States generally accepted accounting principles:

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”) which differ in certain respects from accounting principles generally accepted in the United States (“U.S. GAAP”). For the periods presented herein, the Company is not aware of any differences in the measurement of operations or the recognition of assets and liabilities under U.S. GAAP.

Recent United States accounting pronouncements:

In June 2001, the U.S. Financial Accounting Standards Board issued SFAS No. 143, “Accounting for Asset Retirement Obligations” (“SFAS 143”), which addresses financial accounting and reporting for obligations associated with the retirement of long-lived assets and the associated asset retirement costs. SFAS 143 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement. The Company was required to adopt the

F-42

NORAMA LTD.

Notes to Consolidated Financial Statements

For the years ended March 31, 2001, 2002, and 2003

(Amounts in thousands of Canadian dollars)

provisions of SFAS 143 effective January 1, 2002. The adoption of SFAS No. 143 did not have a material impact on the Company’s financial position or results of operations.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”), which is effective for exit or disposal activities that are initiated after December 31, 2002. SFAS 146 requires that a liability be recognized for exit or disposal costs only when the liability is incurred, as defined in the FASB’s conceptual framework rather than when a company commits to an exit plan, and that the liability be initially measured at fair value. The adoption of this standard did not have a material impact on the consolidated financial statements of the Company.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 requires the recognition of a liability by a guarantor at the inception of certain guarantees entered into or modified after December 31, 2002. FIN 45 requires the guarantor to recognize a liability for the non-contingent component of certain guarantees; that is, it requires the recognition of a liability for the obligation to stand ready to perform in the event that specified triggering events or conditions occur. The initial measurement of this liability is the fair value of the guarantee at inception. At March 31, 2003 and September 30, 2003, the Company has not provided any guarantees.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). Its consolidation provisions are applicable for all newly created entities created after January 31, 2003, and is applicable to existing variable interest entities as of the beginning of the Company’s second quarter beginning July 1, 2003. With respect to entities that do not qualify to be assessed for consolidation based on voting interests, FIN 46 generally requires a company that has a variable interest(s) that will absorb a majority of the variable interest entity’s expected losses if they occur, receive a majority of the entity’s expected residual returns if they occur, or both to consolidate that variable interest entity. For periods prior to FIN 46’s effective date, certain disclosures are required if it is reasonably possible that the Company will have a significant variable interest in or be the primary beneficiary of a variable interest entity when FIN 46 guidance is effective. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

F-43

NORTH AMERICAN ENERGY PARTNERS INC.

Interim Consolidated Balance Sheets

(in thousands of Canadian dollars)

	December 31, 2004			March 31, 2004
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,344		$	36,595
Accounts receivable		45,631			33,647
Unbilled revenue		24,713			27,676
Inventory		1,302			1,609
Prepaid expenses		1,862			1,272
		76,852			100,799
Capital assets		176,105			167,905
Goodwill		198,549			198,549
Intangible assets, net of accumulated amortization of $15,899		1,899			4,870
Deferred financing costs, net of accumulated amortization of $2,736		15,986			17,266
Future income taxes (note 8)		9,590			—
	$	478,981		$	489,389
Liabilities and Shareholder’s Equity
Current liabilities:
Revolving credit facility (note 7)	$	10,000		$	—
Accounts payable		45,563			29,301
Accrued liabilities		3,723			14,694
Current portion of term credit facility (note 7)		11,000			7,250
Current portion of capital lease obligations		1,474			787
Term credit facility scheduled repayments due beyond one year (note 7)		33,000			—
Future income taxes		9,590			5,260
		114,350			57,292
Term credit facility (note 7)		—			41,250
Capital lease obligations		4,405			2,251
Senior notes		240,400			262,260
Derivative financial instruments		22,600			740
Future income taxes (note 8)		—			2,515
Advances from parent company (note 9)		288			—
Shareholder’s equity:
Share capital (note 10)		127,500			127,500
Contributed surplus		444			137
Deficit		(31,006	)		(4,556	)
		96,938			123,081
Basis of presentation - future operations (note 1)
Subsequent event (note 7(b))
United States generally accepted accounting principles (note 11)
	$	478,981		$	489,389

See accompanying notes to interim consolidated financial statements.

F-44

NORTH AMERICAN ENERGY PARTNERS INC.

Interim Consolidated Statements of Operations and Retained Earnings (Deficit)

(in thousands of Canadian dollars)

(unaudited)

	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			Predecessor Company
										For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Revenue	$	80,992		$	234,532		$	25,203		$	54,639		$	250,652
Project costs		66,721			167,644			17,436			38,831			156,976
Equipment costs		14,644			39,741			3,564			11,081			53,986
Depreciation		5,286			14,946			1,364			1,177			6,566
		86,651			222,331			22,364			51,089			217,528
Gross profit (loss)		(5,659	)		12,201			2,839			3,550			33,124
General and administrative		5,354			15,349			1,065			1,956			7,783
Loss (gain) on disposal of capital assets		260			509			—			—			(49	)
Amortization of intangible assets		484			2,971			1,968			—			—
Operating income (loss)		(11,757	)		(6,628	)		(194	)		1,594			25,390
Management fees		—			—			—			17,870			41,070
Interest expense		8,284			24,811			3,099			441			2,457
Foreign exchange loss (gain)		18			516			12			(7	)		(7	)
Other income		(38	)		(261	)		(51	)		(31	)		(367	)
		8,264			25,066			3,060			18,273			43,153
Loss before income taxes		(20,021	)		(31,694	)		(3,254	)		(16,679	)		(17,763	)
Income taxes:
Current income taxes		888			2,531			264			13			218
Future income taxes		(2,050	)		(7,775	)		(1,699	)		(6,175	)		(6,840	)
		(1,162	)		(5,244	)		(1,435	)		(6,162	)		(6,622	)
Net loss		(18,859	)		(26,450	)		(1,819	)		(10,517	)		(11,141	)
Retained earnings (deficit), beginning of period		(12,147	)		(4,556	)		—			29,193			29,817
Retained earnings (deficit), end of period	$	(31,006	)	$	(31,006	)	$	(1,819	)	$	18,676		$	18,676

See accompanying notes to interim consolidated financial statements.

F-45

NORTH AMERICAN ENERGY PARTNERS INC.

Interim Consolidated Statements of Cash Flows

(in thousands of Canadian dollars)

(unaudited)

	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			Predecessor Company
										For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Cash provided by (used in):
Operating activities:
Net loss	$	(18,859	)	$	(26,450	)	$	(1,819	)	$	(10,517	)	$	(11,141	)
Items not affecting cash:
Depreciation		5,286			14,946			1,364			1,177			6,566
Amortization of intangible assets		484			2,971			1,968			—			—
Amortization of deferred financing costs		668			1,922			202			—			—
Loss (gain) on disposal of capital assets		260			509			—			—			(49	)
Increase (decrease) in allowance for doubtful accounts		13			(99	)		(31	)		102			141
Stock-based compensation expense		79			307			—			—			—
Future income taxes		(2,050	)		(7,775	)		(1,699	)		(6,175	)		(6,840	)
Net changes in non-cash working capital (note 3(b))		(1,362	)		(3,914	)		290			580			13,832
		(15,481	)		(17,583	)		275			(14,833	)		2,509
Investing activities:
Purchase of capital assets		(6,081	)		(20,494	)		(734	)		(288	)		(5,234	)
Proceeds on disposal of capital assets		357			491			287			6			609
Acquisition		—			—			(367,778	)		—			—
		(5,724	)		(20,003	)		(368,225	)		(282	)		(4,625	)
Financing activities:
Increase in revolving credit facility		10,000			10,000			—			—			—
Repayment of term credit facility		(1,500	)		(4,500	)		—			(1,094	)		(4,428	)
Repayment of capital lease obligations		(373	)		(811	)		(57	)		(767	)		(3,289	)
Financing costs		(8	)		(642	)		(16,468	)		—			—
Advances from parent company		—			288			—			—			—
Issuance of share capital		—			—			92,500			—			—
Issuance of senior notes		—			—			263,000			—			—
Proceeds from term credit facility		—			—			50,000			—			—
Advances from Norama Inc.		—			—			—			14,471			17,696
Decrease in cheques issued in excess of cash deposits		—			—			—			—			(2,496	)
Decrease in operating line of credit		—			—			—			—			(516	)
		8,119			4,335			388,975			12,610			6,967
Increase (decrease) in cash and cash equivalents		(13,086	)		(33,251	)		21,025			(2,505	)		4,851
Cash and cash equivalents, beginning of period		16,430			36,595			—			7,356			—
Cash and cash equivalents, end of period	$	3,344		$	3,344		$	21,025		$	4,851		$	4,851

See accompanying notes to interim consolidated financial statements.

F-46

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

1. Basis of presentation - future operations

These unaudited interim consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) for interim financial statements and do not include all of the disclosures normally contained in the Company’s annual consolidated financial statements. Since the determination of many assets, liabilities, revenues and expenses is dependent on future events, the preparation of these unaudited interim financial statements requires the use of estimates and assumptions. In the opinion of management, these unaudited interim financial statements have been prepared within reasonable limits of materiality. Except as noted below, these unaudited interim financial statements follow the same significant accounting policies as described and used in the most recent annual consolidated financial statements of the Company for the year ended March 31, 2004 and should be read in conjunction with those financial statements.

These consolidated financial statements have been prepared on a going concern basis in accordance with Canadian GAAP. The going concern basis of presentation reflects the assumption that the Company will continue in operation for a reasonable period of time and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

As discussed in note 7, at December 31, 2004, the Company would have been in breach of several financial covenants under its Credit Agreement without a series of waivers from its lenders. Without the waivers, the lenders would have the right to demand immediate repayment of all amounts outstanding under the facility. There is uncertainty with respect to the ability of the Company to comply with its debt covenants during the next twelve months without an amendment or waiver of the covenants. As a result, the Company has reclassified the term credit facility’s scheduled repayments due beyond one year as current. Management is currently exploring alternatives to resolve the issue, including seeking alternate financing sources; however, there is no certainty that their efforts will be successful.

The ability of the Company to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities when due, is dependent upon the Company’s ability to find new sources of financing or its ability to negotiate a significant amendment to the current covenants that would result in the full amount of the revolving credit facility becoming available. These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis was not appropriate for these financial statements, then significant adjustments would likely be necessary in the carrying value of assets and liabilities, the reporting revenues and expenses, and the balance sheet classifications used.

The comparative information presented for the period from April 1, 2003 to November 25, 2003 reflects the results of operations of Norama Ltd. (“Norama” or the “Predecessor Company”) preceding the acquisition that occurred on November 26, 2003. The comparative results presented may not be directly comparable to the Company’s results for the three-month and nine-month periods ended December 31, 2004 due to the buy-out of equipment leases and the effect of the revaluation of assets and liabilities to their estimated fair market values in accordance with the application of accounting standards related to purchase accounting.

The Company proportionally consolidates the assets, liabilities, revenues, expenses and cash flows of joint ventures in which it has an investment.

2. Accounting policy changes

a) Hedging relationships:

Effective April 1, 2004, the Company prospectively adopted the provisions of the Canadian Institute of Chartered Accountants’ new Accounting Guideline 13, “Hedging Relationships” (“AcG-13”), that specifies the circumstances in which hedge accounting is appropriate, including the identification, documentation, designation, and effectiveness of hedges, and the discontinuance of hedge accounting.

F-47

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

The Company has determined that all of its current hedges qualify for hedge accounting in accordance with AcG-13.

b) Revenue recognition:

Effective April 1, 2004, the Company prospectively adopted the new Canadian accounting standards EIC-141, “Revenue Recognition,” and EIC-142, “Revenue Arrangements with Multiple Deliverables,” which incorporate the principles and guidance under United States generally accepted accounting principles (“U.S. GAAP”) for revenue recognition. No changes to the recognition or classification of revenue were made as a result of the adoption of these standards.

3. Other information

a) Supplemental cash flow information:

	For the three months ended December 31, 2004		For the nine months ended December 31, 2004		For the period from November 26, 2003 to December 31, 2003		Predecessor Company
							For the period from October 1, 2003 to November 25, 2003		For the period from April 1, 2003 to November 25, 2003
Cash paid during the period for:
Interest	$	13,830	$	29,584	$	59	$	510	$	2,431
Income taxes		225		3,408		5		18		325
Cash received during the period for:
Interest		32		305		49		10		100
Income taxes		—		—		—		—		—
Non-cash transactions:
Capital leases	$	1,561	$	3,652	$	943	$	—	$	—

b) Net change in non-cash working capital:

	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			Predecessor Company
										For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Accounts receivable	$	(18,801	)	$	(11,885	)	$	11,781		$	(13,149	)	$	3,338
Unbilled revenue		13,519			2,963			(771	)		3,596			15,289
Inventory		392			307			—			—			—
Prepaid expenses		(1,151	)		(590	)		369			—			(544	)
Accounts payable		11,700			16,262			(6,419	)		7,962			(2,794	)
Accrued liabilities		(7,021	)		(10,971	)		(4,670	)		2,171			(1,457	)
	$	(1,362	)	$	(3,914	)	$	290		$	580		$	13,832

F-48

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

c) Investment in joint venture

The Company participates in an incorporated joint venture. The consolidated financial statements include the Company’s proportionate share of the assets, liabilities, revenues, expenses, net loss and cash flows of the joint venture, as set out in the following tables:

	December 31, 2004
Assets
Cash	$	395
Accounts receivable		789
Unbilled revenue		4,558
	$	5,742
Liabilities
Accounts payable	$	994
Accrued liabilities		891
Venturer’s equity		3,857
	$	5,742

	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			Predecessor Company
										For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Revenue	$	4,025		$	7,631		$	2		$	170		$	170
Project costs		4,107			8,840			14			154			154
General and administrative		—			—			2			3			3
Net income (loss)	$	(82	)	$	(1,209	)	$	(14	)	$	13		$	13
										Predecessor Company
	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Cash used in:
Operating activities	$	(3,292	)	$	(4,668	)	$	(56	)	$	(76	)	$	(76	)
Investing activities		—			—			—			—			—
Financing activities		3,290			5,061			56			76			76
	$	(2	)	$	393		$	—		$	—		$	—

The Company was contingently liable at December 31, 2004 for obligations of its incorporated joint venture totaling $57 (March 31, 2004 - $6), representing the other venturer’s proportionate share of the joint venture’s liabilities. The assets of the joint venture are available for the purpose of satisfying such obligations.

The Company enters into transactions in the normal course of operations with its joint venture. These transactions are measured at the exchange amount, being the amount of consideration established and agreed to by the parties involved. During the three-month and nine-month periods ended December 31, 2004, the Company provided $2,267 and $4,777 of labour and equipment services to the joint venture, respectively (April 1, 2003 – November 25, 2003 -

F-49

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

$101; November 26, 2003 – December 31, 2003 - $16). Additionally the Company recovered costs of $nil and $268 from the joint venture for the three-month and nine-month periods ended December 31, 2004 (April 1, 2003 – November 25, 2003 - $23; November 26, 2003 – December 31, 2003 - $6).

The Company’s intercompany transactions with the joint venture eliminate on consolidation.

4. Segmented information

a) General overview:

The Company conducts business in three operating segments: Mining and Site Preparation, Piling and Pipeline.

• Mining and Site Preparation:

The Mining and Site Preparation operating segment provides mining and site preparation services, including overburden removal and reclamation services, project management and underground utility construction, to a variety of customers throughout Western Canada.

• Piling:

The Piling operating segment provides deep foundation construction and design-build services to a variety of industrial and commercial customers throughout Western Canada.

• Pipeline:

The Pipeline operating segment provides both small and large diameter pipeline construction and installation services to energy and industrial clients throughout Western Canada.

F-50

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

b) Results by operating segment:

For the three months ended December 31, 2004	Mining and Site Preparation			Piling		Pipeline		Total
Revenues from external customers	$	63,872		$	13,319	$	3,801	$	80,992
Depreciation of capital assets		2,618			562		40		3,220
Segment profits		(9,183	)		2,320		390		(6,473	)
Segment assets		299,211			79,470		45,204		423,885
Expenditures for segment capital assets		2,784			27		773		3,584
For the nine months ended December 31, 2004	Mining and Site Preparation			Piling		Pipeline		Total
Revenues from external customers	$	173,250		$	43,957	$	17,325	$	234,532
Depreciation of capital assets		7,231			1,860		122		9,213
Segment profits		(130	)		9,100		2,378		11,348
Segment assets		299,211			79,470		45,204		423,885
Expenditures for segment capital assets		15,418			85		773		16,276
For the period from November 26, 2003 to December 31, 2003	Mining and Site Preparation			Piling		Pipeline		Total
Revenues from external customers	$	10,857		$	3,025	$	11,321	$	25,203
Depreciation of capital assets		526			125		102		753
Segment profits		596			810		2,070		3,476
Segment assets		282,203			76,775		62,244		421,222
Expenditures for segment capital assets		173			—		578		751
Predecessor Company For the period from October 1, 2003 to November 25, 2003	Mining and Site Preparation			Piling		Pipeline		Total
Revenues from external customers	$	34,878		$	8,565	$	11,196	$	54,639
Depreciation of capital assets		473			229		70		772
Segment profits		3,285			977		2,123		6,385
Segment assets		77,906			31,792		15,904		125,602
Expenditures for segment capital assets		164			11		—		175
Predecessor Company For the period from April 1, 2003 to November 25, 2003	Mining and Site Preparation			Piling		Pipeline		Total
Revenues from external customers	$	182,368		$	39,417	$	28,867	$	250,652
Depreciation of capital assets		3,590			1,256		158		5,004
Segment profits		17,745			8,330		5,054		31,129
Segment assets		77,906			31,792		15,904		125,602
Expenditures for segment capital assets		2,591			417		—		3,008

F-51

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

c) Reconciliations:

(i) Income (loss) before income taxes:

	For the three months ended December 31, 2004			For the nine months ended December 31, 2004			For the period from November 26, 2003 to December 31, 2003			Predecessor Company
										For the period from October 1, 2003 to November 25, 2003			For the period from April 1, 2003 to November 25, 2003
Total profit for reportable segments	$	(6,473	)	$	11,348		$	3,476		$	6,385		$	31,129
Unallocated corporate expenses		(14,127	)		(43,325	)		(6,062	)		(20,333	)		(51,077	)
Unallocated equipment revenue		579			283			(668	)		(2,731	)		2,185
Loss before income taxes	$	(20,021	)	$	(31,694	)	$	(3,254	)	$	(16,679	)	$	(17,763	)

(ii) Total assets:

	December 31, 2004		March 31, 2004
Total assets for reportable segments	$	423,885	$	410,469
Corporate assets		55,096		78,920
Total assets	$	478,981	$	489,389

All of the Company’s assets are located in Western Canada and the activities are performed throughout the year.

5. Stock-based compensation plan

Under the 2004 Share Option Plan, directors, officers, employees and service providers to the Company are eligible to receive stock options to acquire common shares in NACG Holdings Inc. The stock options expire in ten years or on termination of employment. Options may be exercised at a price determined at the time the option is awarded, and vest as follows: no options vest on the award date and twenty percent vest on each of the five following award date anniversaries. The maximum number of common shares presently authorized under this plan is 92,500, of which 21,258 are still available for issue as at December 31, 2004. As at December 31, 2004, none of these options were exercisable. No stock options were granted by the Predecessor Company.

The fair value of each option granted by NACG Holdings Inc. was estimated using the Black-Scholes option-pricing model assuming: a dividend yield of nil percent; a risk-free interest rate of 4.26 percent; volatility of nil percent; and an expected option life of 10 years.

F-52

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

The stock options outstanding at December 31, 2004 are as follows:

	Number of options		Weighted average exercise price $ per share
Outstanding at March 31, 2004	54,130		100.00
Granted	19,112		100.00
Exercised	—
Forfeited	(2,000	)	100.00
Outstanding at December 31, 2004	71,242		100.00

At December 31, 2004, the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual life are as follows:

	Options outstanding
Exercise price	Number outstanding	Weighted average remaining contractual life (years)	Weighted average exercise price
$100	71,242	9.1	$	100

The Company recorded $79 of compensation expense related to the stock options during the three months ended December 31, 2004 (nine months ended December 31, 2004 – $307) with such amount being credited to contributed surplus.

6. Comparative figures

Certain of the comparative figures have been reclassified to be consistent with the current period presentation.

7. Senior secured credit facility

a) General terms:

The Company refers to the revolving credit facility and the term loan collectively as the “senior secured credit facility.” The Credit Agreement dated November 26, 2003 related to the senior secured credit facility (the “Credit Agreement”) imposes certain restrictions on the Company, including restrictions on the Company’s ability to incur indebtedness, pay dividends, make investments, grant liens, sell assets and engage in certain other activities. In addition, the Credit Agreement requires the Company to maintain certain financial ratios (“covenants”) including: achieving certain levels of earnings before interest, taxes, depreciation and amortization (“EBITDA”); maintaining interest and fixed-charge coverage ratios above a specified minimum level; limiting capital expenditures to specified amounts; and maintaining leverage ratios below specified maximum levels. The indebtedness under the senior secured credit facility is secured by substantially all of the Company’s assets and those of its subsidiaries, including accounts receivable and capital assets. As at December 31, 2004, the Company had $10.0 million in outstanding borrowings under the revolving credit facility and had issued $10.0 million in letters of credit to support bonding requirements associated with customer contracts. There was $44.0 million outstanding under the term loan portion of the senior secured credit facility at December 31, 2004.

F-53

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

b) Subsequent event:

After December 31, 2004, the Company’s management informed the lenders under the Credit Agreement of the Company’s potential breach of various covenants under the Credit Agreement. The Company has obtained a series of waivers from the lenders, waiving its non-compliance with certain financial covenants for several quarterly periods of fiscal 2005, its failure to deliver financial statements for the periods ended December 31, 2004, January 31, 2005 and February 28, 2005 by specified dates, and any default that would arise under the Credit Agreement as a result of being out of compliance with the corresponding covenant in the indenture governing the Company’s 8 ³/4% senior notes requiring delivery of its December 31, 2004 financial statements by March 1, 2005. The most recent waivers expire on the earlier of April 29, 2005 or the date of any material non-compliance under the waivers. During the waiver period, the lending banks under the senior secured credit facility will not provide any additional funding. The revolving credit facility would otherwise provide the Company with available borrowing capacity up to $70 million in total, subject to borrowing base limitations. In addition, during the waiver period, the Company was obligated to update various information regarding its assets, provide more current financial information regarding its operations than currently required by the Credit Agreement and cooperate with a third party engaged by the lenders to evaluate the Company’s accounting and control procedures surrounding the causes for the misstatements described herein and to review the Company’s current customer contracts.

At December 31, 2004, without the waivers referred to above, the Company would have been in breach of several financial covenants under the Credit Agreement. The specific financial covenants in question were all based on EBITDA measured over a trailing twelve-month period. Under the terms of the Credit Agreement, a breach of covenants constitutes an event of default giving the lenders the right to demand immediate repayment of all amounts outstanding under the senior secured credit facility.

In the event that the Company fails to obtain additional waivers or an amendment of the Credit Agreement by April 29, 2005, its lenders would be in a position to demand immediate repayment on the Company’s senior secured credit facility. Management is currently exploring alternatives to resolve the matters including seeking alternative financing sources. However, the Company cannot provide any assurances that a modification of the Credit Agreement or new financing agreement will be consummated or that the Company will have access to such capital when required to fund its future operations.

c) Current classification:

The Company has reclassified the term credit facility scheduled repayments due beyond one year to current, as required by accounting standards under Emerging Issues Committee Abstract EIC-59, “Long-term Debt with Covenant Violations”. Under this accounting standard, in circumstances where, at the balance sheet date, the debtor would have been in violation of one or more financial covenants giving the creditor the right to demand repayment absent the modification of financial covenants and it is likely that the debtor will violate one or more of its financial covenants within one year of the balance sheet, then the debtor must classify its non-current debt as current.

8. Future income taxes

The future income tax asset has been reduced by a valuation allowance to the extent that it is more likely than not that some portion or all of the assets will not be realized.

9. Related party balance

Advances from parent company of $288 as at December 31, 2004 represents a non-interest bearing note payable to the Company’s parent, NACG Holdings Inc. The note was transacted in the normal course of operations and recorded at the exchange value and on terms as agreed to by the parties. The note payable contains no specified repayment terms.

F-54

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

10. Share capital

Authorized:

Unlimited number of common voting shares.

Issued:

	Number of Shares	Amount
Outstanding at March 31, 2004	100	$	127,500
Issued	—		—
Redeemed	—		—
Outstanding at December 31, 2004	100	$	127,500

11. United States generally accepted accounting principles (“U.S. GAAP”)

These interim consolidated financial statements have been prepared in accordance with Canadian GAAP which differs in certain respects from U.S. GAAP. For the periods presented herein, material issues that could give rise to measurement differences in the interim consolidated financial statements are as follows:

Derivative and hedging activities:

In accordance with the provisions of Financial Accounting Standards Board Statement No. 133 “Accounting for Derivatives and Hedging Activities,” all derivatives are recognized as assets and liabilities on the balance sheet and measured at fair value. As of December 31, 2004, the fair value of the derivatives was a liability of $46,078. The Company has elected to measure and assess effectiveness based on total changes in the cash flows generated by hedging instruments. Each period, an amount equal to the gain or loss resulting on the re-measurement of the hedged item at spot rates is reclassified from other comprehensive income and recorded as an offset to the foreign currency gains or losses otherwise recorded. In addition, the Company reclassifies an amount to reflect the cost element of the hedging instrument. During the three months ended December 31, 2004, $7,374 (net of tax of $3,731) was reclassified from other comprehensive income and deducted from income (nine months ended December 31, 2004-$14,772 (net of tax of $7,475)).

For the three months ended December 31, 2004
Net loss in accordance with Canadian and U.S. GAAP	$	(18,859	)
Net loss on cash flow hedges, net of tax of $7,590		(14,998	)
Plus: reclassification adjustments, net of tax of $3,731		7,374
Comprehensive loss in accordance with U.S. GAAP	$	(26,483	)

For the nine months ended December 31, 2004
Net loss in accordance with Canadian and U.S. GAAP	$	(26,450	)
Net loss on cash flow hedges, net of tax of $11,697		(23,115	)
Plus: reclassification adjustments, net of tax of $7,475		14,772
Comprehensive loss in accordance with U.S. GAAP	$	(34,793	)

Investment in joint venture:

Under Canadian GAAP, investments in joint ventures are accounted for using the proportionate consolidation method. Under U.S. GAAP, investments in joint ventures are accounted for using the equity method. The different accounting treatment affects only the display and classification of financial statement items and not

F-55

NORTH AMERICAN ENERGY PARTNERS INC.

Notes to Unaudited Interim Consolidated Financial Statements

net earnings or shareholders’ equity. Rules prescribed by the Securities and Exchange Commission of the United States (“SEC”) permit the use of the proportionate consolidation method in the reconciliation to U.S. GAAP provided the joint venture is an operating entity and the significant financial operating policies are, by contractual arrangement, jointly controlled by all parties having an equity interest in the joint venture. In addition, the Company disclosed in note 3(c) the major components of its financial statements resulting from the use of the proportionate consolidation method to account for its interests in joint ventures.

Recent United States accounting pronouncements:

SFAS 123R, “Share-Based Payment”, is in effect for fiscal 2006 of the Company. This revised standard requires companies to recognize in the income statement, the grant-date fair value of stock options and other equity-based compensation issued to employees. The fair value of liability-classified awards is remeasured subsequently at each reporting date through the settlement date, while the fair value of equity-classified awards is not subsequently remeasured. The alternative to use the intrinsic value method of APB Opinion 25 is eliminated with this revised standard. The Company is currently evaluating the impact of this revised standard.

SFAS 153, “Exchanges of Non-monetary Assets – an Amendment of APB Opinion 29”, was issued in December 2004. Accounting Principles Board (“APB”) Opinion 29 is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of assets exchanged. SFAS 153 amends APB Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. The standard is effective for the Company for non-monetary asset exchanges occurring in fiscal 2006 and will be applied prospectively. The Company is currently evaluating the impact of this revised standard.

In November 2004, the FASB issued SFAS 151, “Inventory Costs.” This standard requires the allocation of fixed production overhead costs be based on the normal capacity of the production facilities and unallocated overhead costs recognized as an expense in the period incurred. In addition, other items such as abnormal freight, handling costs and wasted materials require treatment as current period charges rather than a portion of the inventory cost. This standard is effective for fiscal 2006 of the Company. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

12. Subsequent event

On May 19, 2005, the Company issued senior secured notes in the amount of US $60.5 million. These notes will mature on June 1, 2010 and bear interest at 9% payable semi-annually. Concurrently, the Company issued preferred shares to existing shareholders of NACG Holdings Inc. for total proceeds of $7.5 million and $1.0 million of preferred shares to one of the counterparties under the Company’s existing swap agreements. In addition, the Company has entered into a $40 million revolving credit facility with a five year term that, together with the senior secured notes, replaced the Company’s existing senior secured credit facility. The Company used the proceeds from the issuance of the notes and preferred shares of approximately $83.8 million to repay the existing term and revolving credit facilities of approximately $61.3 million, to pay related fees and expenses of approximately $6.0 million, and for general corporate purposes.

F-56

ANNEX A

NORTH AMERICAN ENERGY PARTNERS INC.

LETTER OF TRANSMITTAL

LETTER OF TRANSMITTAL

To Tender for Exchange

9% Senior Secured Notes due 2010

of

North American Energy Partners Inc.

Pursuant to the Prospectus dated             , 2005.

THIS OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON             , 2005 UNLESS EXTENDED BY THE COMPANY IN ITS SOLE DISCRETION (THE “EXPIRATION DATE”). TENDERS OF ORIGINAL NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

Wells Fargo Bank, N.A.

By Overnight Delivery or Regular Mail: Wells Fargo Bank, N.A. Corporate Trust Operations Sixth and Marquette MAC N9303-121 Minneapolis, MN 55479 By Facsimile: (612) 667-4927 Confirm by Telephone: (800) 344-5128 By Registered or Certified Mail: Wells Fargo Bank, N.A. Corporate Trust Operations MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480-1517

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE EXCHANGE NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR ORIGINAL NOTES TO THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

This Letter of Transmittal is to be used by holders (“Holders”) of 9% Senior Secured Notes due 2010 (the “Original Notes”) of North American Energy Partners Inc. (the “Company”) to receive 9% Exchange Senior Secured Notes due 2010 (the “Exchange Notes”) of the Company if: (i) certificates representing Original Notes are to be physically delivered to the Exchange Agent herewith by such Holder; (ii) tender of Original Notes is to be made by book-entry transfer to the Exchange Agent’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Book-Entry Delivery Procedures” in the Prospectus dated , 2005 (the “Prospectus”); or (iii) tender of Original Notes is to be made according to the guaranteed delivery procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” in the Prospectus.

The undersigned hereby acknowledges receipt of the Prospectus. All capitalized terms used herein and not defined shall have the meanings ascribed to them in the Prospectus.

DTC participants that are accepting the exchange offer as set forth in the Prospectus and this Letter of Transmittal (which together constitute the “Exchange Offer”) must transmit their acceptance to DTC which will edit and verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send an agent’s message to the Exchange Agent for its acceptance. Delivery of the agent’s message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the agent’s message. By tendering Original Notes pursuant to the book-entry procedures established by DTC, the participant agrees to be bound by the terms of this Letter of Transmittal as if such participant had signed and physically delivered such document to the Exchange Agent.

A-1

Delivery of documents to DTC does not constitute delivery to the Exchange Agent.

If a Holder wishes to surrender Original Notes pursuant to the Exchange Offer and cannot meet the Expiration Date deadline, or cannot deliver the Original Notes, the Letter of Transmittal or any other documentation on time, then the Holder must surrender the Original Notes according to the guaranteed delivery procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” in the Prospectus. See Instruction 2.

The undersigned should complete, execute and deliver this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

TENDER OF ORIGINAL NOTES

¨ CHECK HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.

¨ CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

  Name of Tendering Institution:                                                                                                                                                                                             

  DTC Account Number:                                                                                                                                                                                                             

  Transaction Code Number:                                                                                                                                                                                                     

¨ CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

  Name(s) of Registered Holder(s):                                                                                                                                                                                         

  Window Ticker Number (if any):                                                                                                                                                                                         

  Date of Execution of Notice of Guaranteed Delivery:                                                                                                                                                   

  Name of Eligible Institution that Guaranteed Delivery:                                                                                                                                               

A-2

List below the Original Notes to which this Letter of Transmittal relates. The name(s) and address(es) of the registered Holder(s) should be printed, if not already printed below, exactly as they appear on the Original Notes tendered herewith. The Original Notes and the principal amount of Original Notes that the undersigned wishes to tender should be indicated in the appropriate boxes. If the space provided is inadequate, list the certificate number(s) and principal amount(s) on a separately executed schedule and affix the schedule to this Letter of Transmittal.

DESCRIPTION OF ORIGINAL NOTES

Name(s) and Address(es) of Registered Holder(s) (Please fill in if blank) See Instruction 3	Certificate Number(s)*	Aggregate Principal Amount Represented**	Principal Amount Tendered**
	Total Principal Amount of Original Notes

* Need not be completed by Holders tendering by book-entry transfer.

** Unless otherwise specified, the entire aggregate principal amount represented by the Original Notes described above will be deemed to be rendered. See Instruction 4.

A-3

NOTE: SIGNATURES MUST BE PROVIDED BELOW.

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

The undersigned hereby tenders to North American Energy Partners Inc. (the “Company”), upon the terms and subject to the conditions set forth in its Prospectus dated                      , 2005 (the “Prospectus”), receipt of which is hereby acknowledged, and in accordance with this Letter of Transmittal (which together constitute the “Exchange Offer”), the principal amount of Original Notes indicated in the preceding table entitled “Description of Original Notes” under the column heading “Principal Amount Tendered.”

Subject to, and effective upon, the acceptance for purchase of the principal amount of Original Notes tendered herewith in accordance with the terms and subject to the conditions of the Exchange Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company, all right, title and interest in and to all of the Original Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Company) with respect to such Original Notes, with full powers of substitution and revocation (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (i) present such Original Notes and all evidences of transfer and authenticity to, or transfer ownership of, such Original Notes on the account books maintained by DTC to, or upon the order of, the Company, (ii) present such Original Notes for transfer of ownership on the books of the Company, and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Original Notes, all in accordance with the terms and conditions of the Exchange Offer as described in the Prospectus.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Original Notes tendered hereby and that the Company will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sale agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim, when the same are accepted by the Company. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or by the Company to be necessary or desirable to complete the sale, exchange, assignment and transfer of the Original Notes tendered hereby. The undersigned hereby further represents that any Exchange Notes acquired in exchange for Original Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, that neither the holder of such Original Notes nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes and that neither the Holder of such Original Notes nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), of the Company or a broker-dealer tendering the Original Notes acquired directly from the Company for its own account.

The undersigned also acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the “SEC”), as set forth in no-action letters issued to third parties, that the Exchange Notes issued in exchange for the Original Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an “affiliate” of the Company within the meaning of Rule 405 under the provisions of the Securities Act), provided that such Exchange Notes are acquired in the ordinary course of such holders’ business and such holders have no arrangement with any person to participate in the distribution of such Exchange Notes. The Company, however, does not intend to request the SEC to consider, and the SEC has not considered, the Exchange Offer in the context of a no-action letter, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes and has no arrangement or understanding to participate in a distribution of Exchange Notes. If any Holder is an affiliate of the Company, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes acquired as a result of market-making or other trading activities (a “Participating Broker-Dealer”), it represents that the Original Notes to

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be exchanged for the Exchange Notes were acquired by it as a result of market-making or other trading activities and acknowledges that it will deliver a prospectus (as amended or supplemented from time to time) in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, such Participating Broker-Dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The Company has agreed that, subject to the provisions of the Registration Rights Agreement, dated May 19, 2005, among the Company, the guarantors named therein and the initial purchaser, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer in connection with resales of Exchange Notes received in exchange for Original Notes which were acquired by such Participating Broker-Dealer for its own account as a result of market-making or other trading activities, for a period ending on the earlier of (i) 180 days from the date the registration statement, of which the Prospectus is a part, is declared effective and (ii) the date on which a Participating Broker-Dealer is no longer required to deliver a Prospectus in order to resell the Exchange Notes or in connection with market-making or other trading activities. In that regard, each Participating Broker-Dealer by tendering such Original Notes and executing this Letter of Transmittal, agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading, such Participating Broker-Dealer will suspend the sale of Exchange Notes pursuant to the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to the Participating Broker-Dealer or the Company has given notice that the sale of the Exchange Notes may be resumed, as the case may be. If the Company gives such notice to suspend the sale of the Exchange Notes, it shall extend the period referred to above during which Participating Broker-Dealers are entitled to use the Prospectus in connection with the resale of Exchange Notes by the number of days during the period from and including the date of the giving of such notice to and including the date when Participating Broker-Dealers shall have received copies of the supplemented or amended Prospectus necessary to permit resales of the Exchange Notes or to and including the date on which the Company has given notice that the sale of Exchange Notes may be resumed, as the case may be.

Tenders of Original Notes may be withdrawn by written or facsimile transmission notice of withdrawal received by the Exchange Agent at any time prior to the Expiration Date. In the event of a termination of the Exchange Offer, the Original Notes tendered pursuant to the Exchange Offer will be returned to the tendering Holders promptly, at no cost (or, in the case of Original Notes tendered by book-entry transfer, such Original Notes will be credited to the account maintained at DTC from which such Original Notes were delivered). If the waiver of an unsatisfied condition by the Company constitutes a material change to the Exchange Offer, the Company will promptly disclose the waiver by means of a prospectus supplement that will be distributed to the registered Holders, and the Company will extend the Exchange Offer to the extent required by law.

The tender of Original Notes pursuant to any of the procedures set forth in the Prospectus and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Exchange Offer. The Company’s acceptance for exchange of Original Notes tendered pursuant to any of the procedures described in the Prospectus will constitute a binding agreement between the undersigned and the Company in accordance with the terms and subject to the conditions of the Exchange Offer. Under certain circumstances set forth in the prospectus, the Company may not be required to accept for exchange any of the Original Notes tendered hereby.

All authority conferred or agreed to be conferred by this Letter of Transmittal shall not be affected by, and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned.

The delivery and surrender of any Original Notes is not effective, and the risk of loss of the Original Notes does not pass to the Exchange Agent or the Company, until receipt by the Exchange Agent of this Letter of Transmittal, or a manually signed facsimile hereof, properly completed and duly executed, together with all accompanying evidences of authority and any other required documents in form satisfactory to the Company. All questions as to the validity, form, acceptance, withdrawal and eligibility, including time of receipt of surrendered original notes, will be determined by the Company in its sole discretion, which determination shall be final and binding. The Company reserves the absolute right to reject any and all Original Notes not properly surrendered, to

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reject any Original Notes if acceptance of them would, in the opinion of the Company’s counsel, be unlawful and to waive any defects, irregularities or conditions of surrender as to particular Original Notes.

Unless waived, the undersigned must cure any defects or irregularities in connection with surrenders of Original Notes on or before the Expiration Date. Although the Company intends to notify Holders of defects or irregularities in connection with surrenders of Original Notes, neither the Company, the Exchange Agent nor anyone else will be liable for failure to give such notice. Surrenders of Original Notes will not be deemed to have been made until any defects or irregularities have been cured or waived.

Unless otherwise indicated herein under “Special Issuance Instructions,” the undersigned hereby requests that any Original Notes representing principal amounts not tendered or not accepted for exchange be issued in the name(s) of the undersigned (and in the case of Original Notes tendered by book-entry transfer, by credit to the account of DTC), and Exchange Notes issued in exchange for Original Notes pursuant to the Exchange Offer be issued to the undersigned. Similarly, unless otherwise indicated herein under “Special Delivery Instructions,” the undersigned hereby requests that any Original Notes representing principal amounts not tendered or not accepted for exchange and Exchange Notes issued in exchange for Original Notes pursuant to the Exchange Offer be delivered to the undersigned at the address shown below the undersigned’s signature(s). In the event that the “Special Issuance Instructions” box or the “Special Delivery Instructions” box is, or both are, completed, the undersigned hereby requests that any Original Notes representing principal amounts not tendered or not accepted for purchase be issued in the name(s) of, certificates for such Original Notes be delivered to, and Exchange Notes issued in exchange for Original Notes pursuant to the Exchange Offer be issued in the name(s) of, and be delivered to, the person(s) at the address(es) so indicated, as applicable. The Company has no obligation pursuant to the “Special Issuance Instructions” box or “Special Delivery Instructions” box to transfer any Original Notes from the name of the registered Holder(s) thereof if the Company does not accept for exchange any of the principal amount of such Original Notes so tendered.

¨ CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES IS AN AFFILIATE OF THE COMPANY.

¨ CHECK HERE IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED SUCH NOTES DIRECTLY FROM THE COMPANY OR AN AFFILIATE OF THE COMPANY.

¨ CHECK HERE AND COMPLETE THE LINES BELOW IF YOU OR ANY BENEFICIAL OWNER FOR WHOM YOU HOLD ORIGINAL NOTES TENDERED HEREBY IS A BROKER-DEALER WHO ACQUIRED SUCH NOTES IN MARKET-MAKING OR OTHER TRADING ACTIVITIES. IF THIS BOX IS CHECKED, THE COMPANY WILL SEND 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO TO YOU OR SUCH BENEFICIAL OWNER AT THE ADDRESS SPECIFIED IN THE FOLLOWING LINES.

Name: _____________________________________________________________________________________________________

Address: ___________________________________________________________________________________________________

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SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 1, 5, 6 and 7)		SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7)
To be completed ONLY if Original Notes in a principal amount not tendered or not accepted for exchange are to be issued in the name of, or Exchange Notes are to be issued in the name of, someone other than the person(s) whose signature(s) appear(s) within this Letter of Transmittal or issued to an address different from that shown in the box entitled “Description of Original Notes” within this Letter of Transmittal.		To be completed ONLY if Original Notes in a principal amount not tendered or not accepted for exchange or Exchange Notes are to be sent to someone other than the person(s) whose signature(s) appear(s) within this Letter of Transmittal or to an address different from that shown in the box entitled “Description of Original Notes” within this Letter of Transmittal.
Issue:	¨   Original Notes ¨   Exchange Notes (check as applicable)	Issue:	¨   Original Notes ¨   Exchange Notes (check as applicable)

Name: _____________________________________________	Name: _____________________________________________
(Please Print)	(Please Print)
Address: ___________________________________________	Address: ___________________________________________
(Please Print)	(Please Print)
___________________________________________________	___________________________________________________
(Zip Code)	(Zip Code)
___________________________________________________	___________________________________________________
(Tax Identification or Social Security Number) (See Substitute Form W-9 herein)	(Tax Identification or Social Security Number) (See Substitute Form W-9 herein)

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PLEASE SIGN HERE

(To be completed by all tendering Holders of Original Notes

regardless of whether Original Notes are being physically delivered herewith)

This Letter of Transmittal must be signed by the registered Holder(s) exactly as name(s) appear(s) on certificate(s) for Original Notes or, if tendered by a participant in DTC, exactly as such participant’s name appears on a security position listing as owner of Original Notes, or by the person(s) authorized to become registered Holder(s) by endorsements and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________

Signature(s) of Registered Holder(s) or Authorized Signatory

(See guarantee requirement below)

Dated: _____________________________________________________________________________________________________

Name(s): __________________________________________________________________________________________________

________________________________________________________________________________________________

(Please Print)

Capacity (Full Title): __________________________________________________________________________________________

Address: ____________________________________________________________________________________________________

____________________________________________________________________________________________________________

(Including Zip Code)

Area Code and Telephone Number: ______________________________________________________________________________

Tax Identification or Social Security Number: _____________________________________________________________________

(Complete Accompanying Substitute Form W-9)

SIGNATURE GUARANTEE

(IF REQUIRED—SEE INSTRUCTIONS 1 AND 5)

Authorized Signature _________________________________________________________________________________________

Name of Firm _______________________________________________________________________________________________

[place seal here]

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INSTRUCTIONS

Forming Part of the Terms and Conditions of the Exchange Offer

1. Signature Guarantees. In the event that signatures on this letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantee must be made by an Eligible Institution. As used herein and in the Prospectus, “Eligible Institution” means a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as “an eligible guarantor institution,” including (as such terms are defined therein) (1) a bank; (2) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (3) a credit union; (4) a national securities exchange, registered securities association or clearing agency; or (5) a savings association. Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution unless the Original Notes surrendered hereby are surrendered (i) by a registered Holder of Original Notes that has not completed the box titled “Special Delivery Instructions” on this Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 5.

2. Delivery of Letter of Transmittal and Original Notes. This Letter of Transmittal is to be completed by Holders if (i) certificates representing Original Notes are to be physically delivered to the Exchange Agent herewith by such Holders; (ii) tender of Original Notes is to be made by book-entry transfer to the Exchange Agent’s account at DTC pursuant to the procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Book-Entry Delivery Procedures” in the Prospectus, or (iii) tender of Original Notes is to be made according to the guaranteed delivery procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” in the Prospectus. All physically delivered Original Notes, or a confirmation of a book-entry transfer into the Exchange Agent’s account at DTC of all Original Notes delivered electronically, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at one of its addresses set forth on the cover page hereto on or prior to the Expiration Date, or the tendering Holder must comply with the guaranteed delivery procedures set forth below. Delivery of documents to DTC does not constitute delivery to the Exchange Agent.

If a Holder desires to tender Original Notes pursuant to the Exchange Offer and time will not permit this Letter of Transmittal, certificates representing such Original Notes and all other required documents to reach the Exchange Agent, or the procedures for book-entry transfer cannot be completed, on or prior to the Expiration Date, such Holder must tender such Original Notes pursuant to the guaranteed delivery procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” in the Prospectus. Pursuant to such procedures:

(i) such tender must be made by or through an Eligible Institution,

(ii) prior to the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the Holder of Original Notes and the principal amount of Original Notes tendered, stating that the tender is being made thereby and guaranteeing that within five New York Stock Exchange (“NYSE”) trading days after the Expiration Date, this Letter of Transmittal (or facsimile hereof), together with the certificate(s) for all physically tendered Original Notes, or a book-entry confirmation, and any other documents required by this Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent, and

(iii) a properly executed Letter of Transmittal, as well as the certificate(s) for all physically tendered Original Notes in proper form for transfer or book-entry confirmation, as the case may be, and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within five NYSE trading days after the Expiration Date.

Any Holder of Original Notes who wishes to tender his Original Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 P.M., New York City time, on the Expiration Date. The Exchange Agent will send a notice of guaranteed

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delivery upon request if Original Notes are surrendered according to the guaranteed delivery procedures set forth above.

The method of delivery of this Letter of Transmittal, the Original Notes and all other required documents, including delivery through DTC, is at the election and risk of the tendering Holder and, except as otherwise provided in this Instruction 2, delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, it is suggested that the Holder use properly insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to such date.

No alternative, conditional or contingent tenders will be accepted. All tendering Holders, by execution of this Letter of Transmittal (or a facsimile thereof), waive any right to receive any notice of the acceptance of their Original Notes for exchange.

3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers and/or the principal amount represented by Original Notes should be listed on a separate signed schedule attached hereto.

4. Partial Tenders. (Not applicable to Holders who tender by book-entry transfer). If Holders wish to tender less than the entire principal amount evidenced by an Original Note submitted, such Holders must fill in the principal amount that is to be tendered in the “Principal Amount Tendered” column of the box entitled “Description of Original Notes” on page 3 of this Letter of Transmittal. The minimum permitted tender is US$1,000 in principal amount of Original Notes. All other tenders must be in integral multiples of US$1,000 in principal amount. In the case of a partial tender of Original Notes, as soon as practicable after the Expiration Date, new certificates for the remainder of the Original Notes that were evidenced by such Holder’s old certificates will be sent to such Holder, unless otherwise provided in the appropriate box on this Letter of Transmittal. The entire principal amount that is represented by Original Notes delivered to the Exchange Agent will be deemed to have been tendered, unless otherwise indicated.

5. Signatures on Letter of Transmittal, Instruments of Transfer and Endorsements. If this Letter of Transmittal is signed by the registered Holder(s) of the Original Notes tendered hereby, the signatures must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If this Letter of Transmittal is signed by a participant in DTC whose name is shown as the owner of the Original Notes tendered hereby, the signature must correspond with the name shown on the security position listing as the owner of the Original Notes.

If any of the Original Notes tendered hereby are registered in the name of two or more Holders, all such Holders must sign this Letter of Transmittal. If any of the Original Notes tendered hereby are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

If this Letter of Transmittal or any certificates or bond powers or any Original Note or instrument of transfer is signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of such person’s authority to so act must be submitted. Unless waived by the Company, such person must submit with this Letter of Transmittal evidence satisfactory to the Company of such person’s authority to act in the particular capacity.

When this Letter of Transmittal is signed by the registered Holder(s) of the Original Notes listed herein and transmitted hereby, no endorsements of Original Notes or separate instruments of transfer are required unless Exchange Notes are to be issued, or Original Notes not tendered or exchanged are to be issued, to a person other than the registered Holder(s), in which case signatures on such Original Notes or instruments of transfer must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed other than by the registered Holder of any Original Notes listed in this Letter of Transmittal, then such Original Notes must be endorsed or accompanied by a properly completed bond power. The bond power must authorize the party signing this Letter of Transmittal to tender the Original Notes on behalf of the registered Holder and must be signed by the registered Holder as the

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registered Holder’s name appears on the Original Notes. Signatures on such certificate(s) must be guaranteed by an Eligible Institution.

6. Special Issuance and Delivery Instructions. If certificates for Exchange Notes or unexchanged or untendered Original Notes are to be issued in the name of a person other than the signer of this Letter of Transmittal, or if Exchange Notes or such Original Notes are to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown herein, the appropriate boxes on this Letter of Transmittal should be completed. All Original Notes tendered by book-entry transfer and not accepted for payment will be returned by crediting the account at DTC designated herein as the account for which such Original Notes were delivered.

7. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the transfer of Original Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Original Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the Holder of the Original Notes tendered hereby, or if tendered Original Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Original Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering Holder.

Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Original Notes specified in this Letter of Transmittal.

8. Waiver of Conditions. The conditions of the Exchange Offer may be amended or waived by the Company in whole or in part at any time and from time to time in the Company’s sole discretion in the case of any Original Notes tendered.

9. Substitute Form W-9. Each tendering owner of an Original Note (or other payee) is required to provide the Exchange Agent with a correct taxpayer identification number (“TIN”), generally the owner’s social security or federal employer identification number, and with certain other information, on Substitute Form W-9, which is provided hereafter under “Important Tax Information,” and to certify that the owner (or other payee) is not subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering owner (or other payee) to a US$50 penalty imposed by the Internal Revenue Service and 28% federal income tax withholding. The box in Part 3 of the Substitute Form W-9 may be checked if the tendering owner (or other payee) has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked and the Exchange Agent is not provided with a TIN within 60 days of the date on the Substitute Form W-9, the Exchange Agent will withhold 28% until a TIN is provided to the Exchange Agent.

10. Broker-dealers Participating in the Exchange Offer. If no broker-dealer checks the last box on page 7 of this Letter of Transmittal, the Company has no obligation under the Registration Rights Agreement to allow the use of the Prospectus for resales of the Exchange Notes by broker-dealers or to maintain the effectiveness of the Registration Statement of which the Prospectus is a part after the consummation of the Exchange Offer.

11. Irregularities. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Original Notes, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for which, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under the caption “The Exchange Offer” or any conditions or irregularity in any tender of Original Notes of any particular Holder whether or not similar conditions or irregularities are waived in the case of other Holders.

The Company’s interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Original Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Original Notes, neither the Company, any employees, agents, affiliates or assigns of the Company, the Exchange Agent, nor any other person

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shall be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification.

12. No Conditional Tenders. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders of Original Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Original Notes for exchange.

13. Mutilated, Lost, Stolen or Destroyed Original Notes. Any tendering Holder whose Original Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated on the front of this Letter of Transmittal for further instructions.

14. Requests for Assistance or Additional Copies. Any questions or requests for assistance or additional copies of the Prospectus, this Letter of Transmittal or the notice of guaranteed delivery may be directed to the Exchange Agent at the telephone numbers and location listed on the cover page of this Letter of Transmittal. A Holder or owner may also contact such Holder’s or owner’s broker, dealer, commercial bank or trust company or nominee for assistance concerning the Exchange Offer.

15. Incorporation of Letter of Transmittal. This Letter of Transmittal shall be deemed to be incorporated in any tender of Original Notes by any DTC participant effected through procedures established by DTC and, by virtue of such tender, such participant shall be deemed to have acknowledged and accepted this Letter of Transmittal on behalf of itself and the beneficial owners of any Original Notes so tendered. By tendering Original Notes pursuant to book-entry procedures established by DTC, the DTC participant agrees to be bound by the terms of this Letter of Transmittal as if such participant had signed and physically delivered such document to the Exchange Agent.

IMPORTANT: This Letter of Transmittal (or a facsimile hereof), together with certificates representing the Original Notes and all other required documents or the notice of guaranteed delivery, must be received by the Exchange Agent on or prior to the Expiration Date.

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IMPORTANT TAX INFORMATION

Under federal income tax law, an owner of Original Notes whose tendered Original Notes are accepted for exchange is required to provide the Exchange Agent with such owner’s current TIN on Substitute Form W-9 below. If such owner is an individual, the TIN is his or her social security number. If the Exchange Agent is not provided with the correct TIN, the owner or other recipient of Exchange Notes may be subject to a US$50 penalty imposed by the Internal Revenue Service. In addition, any interest on Exchange Notes paid to such owner or other recipient may be subject to 28% backup withholding tax.

Certain owners of Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that owner must submit to the Exchange Agent a properly completed Internal Revenue Service Forms W-8ECI, W-8BEN, W-8EXP or W-8IMY (collectively, a “Form W-8”), signed under penalties of perjury attesting to that individual’s exempt status. Failure to provide the information required by Form W-8 may subject the tendering owner (or other payee) to a US$50 penalty imposed by the Internal Revenue Service and 28% federal income tax withholding. A Form W-8 can be obtained from the Exchange Agent.

Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service.

Purpose of Substitute Form W-9

To prevent backup withholding the owner is required to notify the Exchange Agent of the owner’s current TIN (or the TIN of any other payee) by completing the following form, certifying that the TIN provided on Substitute Form W-9 is correct (or that such owner is awaiting a TIN), and that (i) the owner is exempt from withholding, (ii) the owner has not been notified by the Internal Revenue Service that the owner is subject to backup withholding as a result of failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the owner that the owner is no longer subject to backup withholding. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional instructions.

What Number to Give the Exchange Agent

The Holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the owner of the Original Notes. If the Original Notes are registered in more than one name or are not registered in the name of the actual owner consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9,” for additional guidance on which number to report.

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PAYEE’S NAME:

SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service Payer’s Request for Taxpayer Identification Number (“TIN”)	Part 1—PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	__________________________ Social Security Number(s) OR __________________________ Employer Identification Number(s)
	Part 2—Certifications—Under penalties of perjury, I certify that: (1)    The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me) and (2)    I am not subject to backup withholding because: (a) I am exempt from backup Number (“TIN”) withholding, or (b) I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. (3)    I am a U.S. person (including a U.S. resident alien).
	Certification Instructions—You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return.	Part 3— Awaiting TIN ¨
	Signature: _____________________________ Date: _____________________

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A US$50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 28%. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within 60 days of the date in this form, 28% of all reportable cash payments made to me will be withheld until I provide a taxpayer identification number.

Signature: __________________________________________ Date: __________________________________________

A-14

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

North American Energy Partners Inc.; North American Construction Group Inc.

Applicable Laws of Canada

Section 124 of the Canada Business Corporations Act provides that a corporation may indemnify a present or former director or officer of the corporation, or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity, provided that the individual (a) acted honestly and in good faith with a view to the best interests of the corporation or, as the case may be, the other entity; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that the individual’s conduct was lawful.

Section 124 of the Canada Business Corporations Act also provides that a corporation may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to above. The individual shall repay the moneys if the individual does not fulfill the conditions set out in set out in subsections (a) and (b) above.

A corporation may, with the approval of a court, indemnify an individual referred to above, or advance moneys as set out above, in respect of an action by or on behalf of the corporation or other entity to procure a judgment in its favour, to which the individual is made a party because of the individual’s association with the corporation or other entity against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfills the conditions set out in subsections (a) and (b) above.

Notwithstanding the above, an individual is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation or other entity as described above, if the individual seeking indemnity (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; (b) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation’s request; and (c) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that the individual’s conduct was lawful.

By-laws

Each corporation’s by-laws provide that, subject to the limitations contained in the Canada Business Corporations Act, the corporation shall indemnify a director or officer, a former director or officer, or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other action or proceeding in which the individual is involved because of such individual’s association with the corporation or other entity, if the individual (a) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the request of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful. The by-laws also provide that the corporation may advance moneys to an individual entitled to indemnification for the costs, charges and expenses of such proceedings.

Each corporation’s by-laws also provide that the corporation may purchase and maintain insurance for the benefit of any individual referred to above against any liability incurred by the individual in the individual’s capacity as a director or officer, or similar capacity, of the corporation or of another entity, if the individual acts or acted at the request of the corporation.

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North American Construction Ltd.

Applicable Laws of Canada

See the discussion of applicable laws of Canada above under “North American Energy Partners Inc.; North American Construction Group Inc.”

By-laws

The corporation’s by-laws provide that, except in respect of an action by or on behalf of the corporation to procure a judgment in its favor, the corporation shall indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of another entity of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including amounts paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or other entity, if (a) he acted honestly and in good faith with a view to the best interests of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

The corporation’s by-laws also provide that the corporation may, with the approval of the court, indemnify a person referred to above in respect of an action by or on behalf of the corporation to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or an officer of the corporation, against all costs, charges and expenses reasonably incurred by him in connection with the action if he fulfils the conditions set out in the paragraph above.

Griffiths Pile Driving Inc.; North American Enterprises Ltd.; North American Industries Inc.; North American Maintenance Ltd.; North American Mining Inc.; North American Pipeline Inc.; North American Road Inc.; North American Services Inc.; North American Site Services Inc.

Applicable Laws of Alberta

Section 124 of the Business Corporations Act (Alberta) provides that a corporation may indemnify a present or former director or officer of the corporation, or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity, provided that the individual (a) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, the other entity; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

Section 124 of the Business Corporations Act (Alberta) also provides that, except in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, a corporation may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to above. The individual shall repay the moneys if the individual does not fulfill the conditions set out in set out in subsections (a) and (b) above.

A corporation may, with the approval of a court, indemnify an individual referred to above, or advance moneys as set out above, in respect of an action by or on behalf of the corporation or other entity to procure a judgment in its favour, to which the individual is made a party because of the individual’s association with the corporation or other entity against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfills the conditions set out in subsections (a) and (b) above.

Notwithstanding the above, an individual is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation or other entity as described above, if the individual seeking indemnity (a) was substantially successful on the merits in the person’s defense of any civil, criminal or administrative action or proceeding to which the person is made a party by reason of being or having been a director or officer of the corporation; (b) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation’s request; (c) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that the individual’s conduct was lawful; and (d) is fairly and reasonably entitled to the indemnity.

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By-laws

Each corporation’s by-laws provide that, except in respect of an action by or on behalf of the corporation to procure a judgment in its favor, the corporation shall indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of another entity of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including amounts paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or other entity, if (a) he acted honestly and in good faith with a view to the best interests of the corporation; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

Each corporation’s by-laws also provide that the corporation may, with the approval of the court, indemnify a person referred to above in respect of an action by or on behalf of the corporation to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or an officer of the corporation, against all costs, charges and expenses reasonably incurred by him in connection with the action if he fulfils the conditions set out in the paragraph above.

NACG Finance LLC

Section 18-108 of the Delaware Limited Liability Company Act provides that, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. NACG Finance LLC’s limited liability company agreement provides that NACG Finance LLC shall indemnify its managers to the full extent allowed by the Delaware Limited Liability Company Act. Further, the limited liability company agreement provides that NACG Finance LLC, in the sole discretion of its Board of Managers, may indemnify any officer, employee, agent or other person to the full extent allowed by the Delaware Limited Liability Company Act.

North American Caisson Ltd.

Applicable Laws of Alberta

See the discussion of applicable laws of Alberta above under “Griffiths Pile Driving Inc.; North American Enterprises Ltd.; North American Industries Inc.; North American Maintenance Ltd.; North American Mining Inc.; North American Pipeline Inc.; North American Road Inc.; North American Services Inc.; North American Site Services Inc.”

By-laws

The corporation’s by-laws provide that the corporation shall indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of another entity of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, to the extent permitted by the Business Corporations Act (Alberta).

North American Engineering Inc.

Applicable Laws of Alberta

See the discussion of applicable laws of Alberta above under “Griffiths Pile Driving Inc.; North American Enterprises Ltd.; North American Industries Inc.; North American Maintenance Ltd.; North American Mining Inc.; North American Pipeline Inc.; North American Road Inc.; North American Services Inc.; North American Site Services Inc.”

By-laws

The corporation’s by-laws provide that the corporation shall indemnify, to the extent permitted by law, all directors and officers, and other persons acting at the corporation’s request as a director or officer of an entity to which the corporation is or was a shareholder or creditor. The indemnity shall include all costs, charges, expenses, judgments or settlement sums reasonably incurred with respect to any civil, criminal, or administrative action or proceeding. The corporation’s by-laws also provide that the corporation may purchase and maintain liability insurance for the benefit of any directors or officers, former directors and officers, and any other person acting at the corporation’s request as a director or officer of an entity to which the corporation is or was a shareholder or

II-3

creditor. The insurance may cover any liability for costs, charges, expenses, judgments or settlement sums reasonably incurred with respect to any civil, criminal, or administrative action or proceeding.

North American Site Development Ltd.

Applicable Laws of Alberta

See the discussion of applicable laws of Alberta above under “Griffiths Pile Driving Inc.; North American Enterprises Ltd.; North American Industries Inc.; North American Maintenance Ltd.; North American Mining Inc.; North American Pipeline Inc.; North American Road Inc.; North American Services Inc.; North American Site Services Inc.”

By-laws

The corporation’s by-laws provide that the corporation may purchase and maintain such insurance as the board of directors of the corporation may from time to time determine for the benefit of its officers and directors in their capacity acting as officers and directors of the corporation, or as officers and directors of other entities, except when the liability relates to the failure of an officer or director to act honestly and in good faith with a view to the best interests of the corporation.

Indemnity Agreements

NACG Holdings Inc., NACG Preferred Corp., North American Energy Partners Inc. and North American Construction Group Inc. have entered into indemnity agreements with each of their respective officers and directors pursuant to which each corporation is obligated to indemnify such officer or director to the full extent permitted by applicable law. The form of such indemnity agreement is filed as an exhibit to this registration statement.

Item 21. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit Number	Description
3.1	— Articles of Amendment of North American Energy Partners Inc., filed with the Corporations Directorate of Industry Canada on May 18, 2005.
3.2*	— Articles of Incorporation of North American Energy Partners Inc., filed with the Corporations Directorate of Industry Canada on October 17, 2003 (together with amendments thereto) (filed as Exhibit 3.1 to North American Energy Partners Inc.’s registration statement on Form F-4, Registration No. 333-111396 (the “2004 Registration Statement”), and incorporated herein by reference).
3.3*	— By-laws of North American Energy Partners Inc. (filed as Exhibit 3.2 to the 2004 Registration Statement and incorporated herein by reference).
3.4*	— Articles of Incorporation of Griffiths Pile Driving Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on September 8, 2000 (together with amendments thereto) (filed as Exhibit 3.3 to the 2004 Registration Statement and incorporated herein by reference).
3.5*	— By-laws of Griffiths Pile Driving Inc. (filed as Exhibit 3.4 to the 2004 Registration Statement and incorporated herein by reference).
3.6*	— Certificate of Formation of NACG Finance LLC, filed with the Secretary of State of the State of Delaware on October 21, 2003 (filed as Exhibit 3.5 to the 2004 Registration Statement and incorporated herein by reference).
3.7*	— First Amended and Restated Limited Liability Company Agreement of NACG Finance LLC (filed as Exhibit 3.6 to the 2004 Registration Statement and incorporated herein by reference).
3.8*	— Articles of Incorporation of North American Caisson Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on January 1, 1991 (filed as Exhibit 3.7 to the 2004 Registration Statement and incorporated herein by reference).
3.9*	— By-laws of North American Caisson Ltd. (filed as Exhibit 3.8 to the 2004 Registration Statement and incorporated herein by reference).

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Exhibit Number	Description
3.10*	— Articles of Incorporation of North American Construction Group Inc., filed with the Corporations Directorate of Industry Canada on October 17, 2003 (together with amendments thereto) (filed as Exhibit 3.9 to the 2004 Registration Statement and incorporated herein by reference).
3.11*	— By-laws of North American Construction Group Inc. (filed as Exhibit 3.10 to the 2004 Registration Statement and incorporated herein by reference)
3.12*	— Articles of Incorporation of North American Construction Ltd., filed with the Corporations Directorate of Industry Canada on August 3, 1988 (filed as Exhibit 3.11 to the 2004 Registration Statement and incorporated herein by reference).
3.13*	— By-laws of North American Construction Ltd. (filed as Exhibit 3.12 to the 2004 Registration Statement and incorporated herein by reference)
3.14*	— Articles of Incorporation of North American Engineering Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on August 10, 1990 (filed as Exhibit 3.13 to the 2004 Registration Statement and incorporated herein by reference).
3.15*	— By-laws of North American Engineering Inc. (filed as Exhibit 3.14 to the 2004 Registration Statement and incorporated herein by reference)
3.16*	— Articles of Incorporation of North American Enterprises Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on September 21, 1998 (filed as Exhibit 3.15 to the 2004 Registration Statement and incorporated herein by reference).
3.17*	— By-laws of North American Enterprises Ltd. (filed as Exhibit 3.16 to the 2004 Registration Statement and incorporated herein by reference)
3.18*	— Articles of Incorporation of North American Industries Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on January 15, 1991 (together with amendments thereto) (filed as Exhibit 3.17 to the 2004 Registration Statement and incorporated herein by reference).
3.19*	— By-laws of North American Industries Inc. (filed as Exhibit 3.18 to the 2004 Registration Statement and incorporated herein by reference).
3.20*	— Articles of Incorporation of North American Maintenance Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on December 16, 1991 (together with amendments thereto) (filed as Exhibit 3.19 to the 2004 Registration Statement and incorporated herein by reference).
3.21*	— By-laws of North American Maintenance Ltd. (filed as Exhibit 3.20 to the 2004 Registration Statement and incorporated herein by reference).
3.22*	— Articles of Incorporation of North American Mining Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on November 26, 1999 (filed as Exhibit 3.21 to the 2004 Registration Statement and incorporated herein by reference).
3.23*	— By-laws of North American Mining Inc. (filed as Exhibit 3.22 to the 2004 Registration Statement and incorporated herein by reference).
3.24*	— Articles of Incorporation of North American Pipeline Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on December 16, 1991 (filed as Exhibit 3.23 to the 2004 Registration Statement and incorporated herein by reference).
3.25*	— By-laws of North American Pipeline Inc. (filed as Exhibit 3.24 to the 2004 Registration Statement and incorporated herein by reference)
3.26*	— Articles of Incorporation of North American Road Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on October 21, 1988 (together with amendments thereto) (filed as Exhibit 3.25 to the 2004 Registration Statement and incorporated herein by reference).
3.27*	— By-laws of North American Road Inc. (filed as Exhibit 3.26 to the 2004 Registration Statement and incorporated herein by reference)

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Exhibit Number	Description
3.28*	— Articles of Incorporation of North American Services Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on March 9, 1998 (filed as Exhibit 3.27 to the 2004 Registration Statement and incorporated herein by reference).
3.29*	— By-laws of North American Services Inc. (filed as Exhibit 3.28 to the 2004 Registration Statement and incorporated herein by reference)
3.30*	— Articles of Incorporation of North American Site Development Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on February 15, 1982 (together with amendments thereto) (filed as Exhibit 3.29 to the 2004 Registration Statement and incorporated herein by reference).
3.31*	— By-laws of North American Site Development Ltd. (filed as Exhibit 3.30 to the 2004 Registration Statement and incorporated herein by reference).
3.32*	— Articles of Incorporation of North American Site Services Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on February 10, 2003 (filed as Exhibit 3.31 to the 2004 Registration Statement and incorporated herein by reference).
3.33*	— By-laws of North American Site Services Inc. (filed as Exhibit 3.32 to the 2004 Registration Statement and incorporated herein by reference).
4.1	— Indenture, dated as of May 19, 2005, among North American Energy Partners Inc., the guarantors named therein and Wells Fargo Bank, N.A., as Trustee.
4.2	— Form of 9% Senior Secured Note due 2010 (contained in the Indenture filed as Exhibit 4.1).
4.3	— Registration Rights Agreement, dated as of May 19, 2005, among North American Energy Partners Inc., the guarantors named therein and Jefferies & Company, Inc.
5.1	— Opinion of Bracewell & Giuliani LLP.
5.2	— Opinion of Borden Ladner Gervais LLP.
10.1	— Credit Agreement, dated as of May 19, 2005, among North American Energy Partners Inc., the lenders named therein, BNP Paribas (Canada), as Administrative Agent, and GE Canada Finance Holding Company, as Collateral Agent.
10.2	— Intercreditor Agreement, dated as of May 19, 2005, between GE Finance Canada Holding Company, Wells Fargo Bank, N.A. and Computershare Trust Company of Canada, and consented to by North American Energy Partners Inc. and its subsidiaries.
10.3	— Form of Indemnity Agreement between NACG Holdings Inc., NACG Preferred Corp., North American Energy Partners Inc., North American Construction Group Inc. and their respective officers and directors.
10.4*	— Indenture, dated as of November 26, 2003, among North American Energy Partners Inc., the guarantors named therein and Wells Fargo Bank, N.A., as Trustee (filed as Exhibit 4.1 to the 2004 Registration Statement and incorporated herein by reference).
12.1	— Computation of Ratio of Earnings to Fixed Charges.
21.1*	— Subsidiaries of North American Energy Partners Inc. (filed as Exhibit 21.1 to the 2004 Registration Statement and incorporated herein by reference).
23.1	— Consent of Bracewell & Giuliani LLP (included in their opinion filed as Exhibit 5.1).
23.2	— Consent of Borden Ladner Gervais LLP (included in their opinion filed as Exhibit 5.2).
23.3	— Consent of KPMG LLP.
23.4	— Consent of KPMG LLP.
24.1	— Powers of attorney.
25.1	— Form T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of Wells Fargo Bank, N.A.
99.1	— Form of Notice of Guaranteed Delivery.
99.2	— Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

* Previously filed.

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(b) Financial Statement Schedules

Schedule II — Valuation and Qualifying Accounts

Item 22. Undertakings

1. (a) The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering.

2. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

3. The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

4. The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN ENERGY PARTNERS INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant
	Vice President, Finance

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement or amendment thereto has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    RODNEY J. RUSTON         Rodney J. Ruston	President and Chief Executive Officer (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President, Finance (Principal Financial and Accounting Officer)
* E. J. Antonio III	Director
* John A. Brussa	Director
* Jean-Pierre L. Conte	Director
* Jim G. Gardiner	Director
* Donald R. Getty	Director
* Martin Gouin	Director
* John D. Hawkins	Director
* Ronald A. McIntosh	Chairman
* William C. Oehmig	Director
* Gordon Parchewsky	Director
* K. Rick Turner	Director
* Gary K. Wright	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

GRIFFITHS PILE DRIVING INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant
	Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Signature	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NACG FINANCE LLC
By:	/s/    CHRIS HAYMAN
	Chris Hayman
	Secretary

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    CHRIS HAYMAN         Chris Hayman	Secretary (Principal Executive, Financial and Accounting Officer)
* Bernie Robert	Manager
* Ron Crawford	Manager

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-10

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN CAISSON LTD.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant
	Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Signature	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN CONSTRUCTION GROUP INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant
	Vice President, Finance

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Signature	Title
/s/    RODNEY J. RUSTON         Gordon A. Parchewsky	President and Chief Executive Officer (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President, Finance (Principal Financial and Accounting Officer)
* E. J. Antonio III	Director
* John A. Brussa	Director
* Jean-Pierre L. Conte	Director
* Jim G. Gardiner	Director
* Donald R. Getty	Director
* Martin Gouin	Director
* John D. Hawkins	Director
* Ronald A. McIntosh	Chairman
* William C. Oehmig	Director
* Gordon Parchewsky	Director
* K. Rick Turner	Director
* Gary K. Wright	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-12

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN CONSTRUCTION LTD.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN ENGINEERING INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-14

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN ENTERPRISES LTD.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-15

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN INDUSTRIES INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN MAINTENANCE LTD.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN MINING INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN PIPELINE INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN ROAD INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-20

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN SERVICES INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN SITE DEVELOPMENT LTD.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-22

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement, or amendment thereto, to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Acheson, Alberta, Canada, on June 6, 2005.

NORTH AMERICAN SITE SERVICES INC.
By:	/s/    VINCENT J. GALLANT
	Vincent J. Gallant Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement, or amendment thereto, has been signed by the following persons in the capacities indicated on June 6, 2005.

Name	Title
/s/    GORDON A. PARCHEWSKY         Gordon A. Parchewsky	President and Director (Principal Executive Officer)
/s/    VINCENT J. GALLANT         Vincent J. Gallant	Vice President (Principal Financial and Accounting Officer)
* John D. Hawkins	Director

*By:	/s/    ALLEN MAYDONIK
	Allen Maydonik
	Attorney-in-fact for persons indicated

II-23

SIGNATURES

Pursuant to the requirements of the Securities Act, the undersigned has duly signed this registration statement, or amendment thereto, solely in its capacity as the authorized representative of each registrant not incorporated in the United States, on June 6, 2005.

NACG FINANCE LLC
By:	/s/    CHRIS HAYMAN
	Chris Hayman Secretary

II-24

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

Allowance for doubtful accounts receivable

	Balance, beginning of period		Charged to costs and expense(1)			Deductions(2)			Balance, end of period
Year ended March 31:
2002	$	324,000	$	274,000		$	(324,000	)	$	274,000
2003		274,000		(80,000	)		(42,000	)		152,000
2004		233,000		(60,000	)		(29,000	)		144,000
April 1, 2003 to November 25, 2003		152,000		141,000			—			293,000
November 26, 2003 to March 31, 2004		293,000		48,000			(108,000	)		233,000
October 1, 2003 to November 25, 2003		191,000		102,000			—			293,000
November 26, 2003 to December 31, 2003		293,000		(31,000	)		—			262,000
October 1, 2004 to December 31, 2004		121,000		26,000			(3,000	)		144,000

(1) Represents increase (decrease) in allowance for doubtful accounts receivable charged to expense.

(2) Represents the accounts receivable written-off against the allowance for doubtful accounts receivable.

S-1

EXHIBIT INDEX

Exhibit Number	Description
3.1	— Articles of Amendment of North American Energy Partners Inc., filed with the Corporations Directorate of Industry Canada on May 18, 2005.
3.2*	— Articles of Incorporation of North American Energy Partners Inc., filed with the Corporations Directorate of Industry Canada on October 17, 2003 (together with amendments thereto) (filed as Exhibit 3.1 to North American Energy Partners Inc.’s registration statement on Form F-4, Registration No. 333-111396 (the “2004 Registration Statement”), and incorporated herein by reference).
3.3*	— By-laws of North American Energy Partners Inc. (filed as Exhibit 3.2 to the 2004 Registration Statement and incorporated herein by reference).
3.4*	— Articles of Incorporation of Griffiths Pile Driving Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on September 8, 2000 (together with amendments thereto) (filed as Exhibit 3.3 to the 2004 Registration Statement and incorporated herein by reference).
3.5*	— By-laws of Griffiths Pile Driving Inc. (filed as Exhibit 3.4 to the 2004 Registration Statement and incorporated herein by reference).
3.6*	— Certificate of Formation of NACG Finance LLC, filed with the Secretary of State of the State of Delaware on October 21, 2003 (filed as Exhibit 3.5 to the 2004 Registration Statement and incorporated herein by reference).
3.7*	— First Amended and Restated Limited Liability Company Agreement of NACG Finance LLC (filed as Exhibit 3.6 to the 2004 Registration Statement and incorporated herein by reference).
3.8*	— Articles of Incorporation of North American Caisson Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on January 1, 1991 (filed as Exhibit 3.7 to the 2004 Registration Statement and incorporated herein by reference).
3.9*	— By-laws of North American Caisson Ltd. (filed as Exhibit 3.8 to the 2004 Registration Statement and incorporated herein by reference).
3.10*	— Articles of Incorporation of North American Construction Group Inc., filed with the Corporations Directorate of Industry Canada on October 17, 2003 (together with amendments thereto) (filed as Exhibit 3.9 to the 2004 Registration Statement and incorporated herein by reference).
3.11*	— By-laws of North American Construction Group Inc. (filed as Exhibit 3.10 to the 2004 Registration Statement and incorporated herein by reference).
3.12*	— Articles of Incorporation of North American Construction Ltd., filed with the Corporations Directorate of Industry Canada on August 3, 1988 (filed as Exhibit 3.11 to the 2004 Registration Statement and incorporated herein by reference).
3.13*	— By-laws of North American Construction Ltd. (filed as Exhibit 3.12 to the 2004 Registration Statement and incorporated herein by reference).
3.14*	— Articles of Incorporation of North American Engineering Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on August 10, 1990 (filed as Exhibit 3.13 to the 2004 Registration Statement and incorporated herein by reference).
3.15*	— By-laws of North American Engineering Inc. (filed as Exhibit 3.14 to the 2004 Registration Statement and incorporated herein by reference).
3.16*	— Articles of Incorporation of North American Enterprises Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on September 21, 1998 (filed as Exhibit 3.15 to the 2004 Registration Statement and incorporated herein by reference).
3.17*	— By-laws of North American Enterprises Ltd. (filed as Exhibit 3.16 to the 2004 Registration Statement and incorporated herein by reference).
3.18*	— Articles of Incorporation of North American Industries Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on January 15, 1991 (together with amendments thereto) (filed as Exhibit 3.17 to the 2004 Registration Statement and incorporated herein by reference).

Exhibit Number	Description
3.19*	— By-laws of North American Industries Inc. (filed as Exhibit 3.18 to the 2004 Registration Statement and incorporated herein by reference).
3.20*	— Articles of Incorporation of North American Maintenance Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on December 16, 1991 (together with amendments thereto) (filed as Exhibit 3.19 to the 2004 Registration Statement and incorporated herein by reference).
3.21*	— By-laws of North American Maintenance Ltd. (filed as Exhibit 3.20 to the 2004 Registration Statement and incorporated herein by reference).
3.22*	— Articles of Incorporation of North American Mining Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on November 26, 1999 (filed as Exhibit 3.21 to the 2004 Registration Statement and incorporated herein by reference).
3.23*	— By-laws of North American Mining Inc. (filed as Exhibit 3.22 to the 2004 Registration Statement and incorporated herein by reference).
3.24*	— Articles of Incorporation of North American Pipeline Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on December 16, 1991 (filed as Exhibit 3.23 to the 2004 Registration Statement and incorporated herein by reference).
3.25*	— By-laws of North American Pipeline Inc. (filed as Exhibit 3.24 to the 2004 Registration Statement and incorporated herein by reference).
3.26*	— Articles of Incorporation of North American Road Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on October 21, 1988 (together with amendments thereto) (filed as Exhibit 3.25 to the 2004 Registration Statement and incorporated herein by reference).
3.27*	— By-laws of North American Road Inc. (filed as Exhibit 3.26 to the 2004 Registration Statement and incorporated herein by reference).
3.28*	— Articles of Incorporation of North American Services Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on March 9, 1998 (filed as Exhibit 3.27 to the 2004 Registration Statement and incorporated herein by reference).
3.29*	— By-laws of North American Services Inc. (filed as Exhibit 3.28 to the 2004 Registration Statement and incorporated herein by reference).
3.30*	— Articles of Incorporation of North American Site Development Ltd., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on February 15, 1982 (together with amendments thereto) (filed as Exhibit 3.29 to the 2004 Registration Statement and incorporated herein by reference).
3.31*	— By-laws of North American Site Development Ltd. (filed as Exhibit 3.30 to the 2004 Registration Statement and incorporated herein by reference).
3.32*	— Articles of Incorporation of North American Site Services Inc., filed with the Registrar of Corporations, Alberta Consumer and Corporate Affairs on February 10, 2003 (filed as Exhibit 3.31 to the 2004 Registration Statement and incorporated herein by reference).
3.33*	— By-laws of North American Site Services Inc. (filed as Exhibit 3.32 to the 2004 Registration Statement and incorporated herein by reference).
4.1	— Indenture, dated as of May 19, 2005, among North American Energy Partners Inc., the guarantors named therein and Wells Fargo Bank, N.A., as Trustee.
4.2	— Form of 9% Senior Secured Note due 2010 (contained in the Indenture filed as Exhibit 4.1).
4.3	— Registration Rights Agreement, dated as of May 19, 2005, among North American Energy Partners Inc., the guarantors named therein and Jefferies & Company, Inc.
5.1	— Opinion of Bracewell & Giuliani LLP.
5.2	— Opinion of Borden Ladner Gervais LLP.
10.1	— Credit Agreement, dated as of May 19, 2005, among North American Energy Partners Inc., the lenders named therein, BNP Paribas (Canada), as Administrative Agent, and GE Canada Finance Holding Company, as Collateral Agent.

Exhibit Number	Description
10.2	— Intercreditor Agreement, dated as of May 19, 2005, between GE Finance Canada Holding Company, Wells Fargo Bank, N.A. and Computershare Trust Company of Canada, and consented to by North American Energy Partners Inc. and its subsidiaries.
10.3	— Form of Indemnity Agreement between NACG Holdings Inc., NACG Preferred Corp., North American Energy Partners Inc., North American Construction Group Inc. and their respective officers and directors.
10.4*	— Indenture, dated as of November 26, 2003, among North American Energy Partners Inc., the guarantors named therein and Wells Fargo Bank, N.A., as Trustee (filed as Exhibit 4.1 to the 2004 Registration Statement and incorporated herein by reference).
12.1	— Computation of Ratio of Earnings to Fixed Charges.
21.1*	— Subsidiaries of North American Energy Partners Inc. (filed as Exhibit 21.1 to the 2004 Registration Statement and incorporated herein by reference).
23.1	— Consent of Bracewell & Giuliani LLP (included in their opinion filed as Exhibit 5.1).
23.2	— Consent of Borden Ladner Gervais LLP (included in their opinion filed as Exhibit 5.2).
23.3	— Consent of KPMG LLP.
23.4	— Consent of KPMG LLP.
24.1	— Powers of attorney.
25.1	— Form T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of Wells Fargo Bank, N.A.
99.1	— Form of Notice of Guaranteed Delivery.
99.2	— Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

* Previously filed.

EX-3.1

EXHIBIT 3.1

	Industry Canada	Industrie Canada	ELECTRONIC TRANSACTION REPORT	RAPPORT DE LA TRANSACTION ÉLECTRONIQUE
	Canada Business Corporations Act	Loi canadienne sur les sociétés par actions	ARTICLES OF AMENDMENT (SECTIONS 27 OR 177)	CLAUSES MODIFICATRICES (ARTICLES 27 OU 177)

Processing Type - Mode de traitement:	E-Commerce/Commerce-É
1. Name of Corporation - Dénomination de la société		2.	Corporation No. - N° de la société
North American Energy Partners Inc.			615088-8
3.  The articles of the above-named corporation are amended as follows:
Les statuts de la société mentionnée ci-dessus sont modifiés de la façon suivante:

The Corporation is authorized to issue an unlimited number of Series A Preferred Shares and an unlimited number of Series B Preferred Shares.

The rights, privileges, restrictions and conditions attaching to the Series A Preferred Shares, Series B Preferred Shares and common shares, are set out in Schedules “A”, “B” and “C” attached hereto and forming part hereof.

“Company” means North American Energy Partners Inc.

Schedule A

Preferences and Rights of the

Series A Preferred Shares

1. Certain Definitions. In addition to the other terms defined herein, the following terms shall have the meanings ascribed to them below:

(a) “Accelerated Redemption Event” shall mean (i) the occurrence of a Change of Control or (ii) if there is an IPO, the later of (a) the consummation of the IPO or (b) the date on which all of the Company’s 8-3/4% Senior Notes due 2011 and the Company’s 9% Senior Secured Notes due 2010 are no longer outstanding.

(b) “Affiliate” shall, with respect to any specified Person, mean any other Person who directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

(c) “Business Day” shall mean any day that is not a Saturday, Sunday or national legal holiday in Edmonton, Alberta, Canada.

(d) “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of common stock and preferred stock of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing; and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing. For purposes of this definition, “common stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, and includes, without limitation, all series and classes of such common stock, and “preferred stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

(e) “Change of Control” means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets or properties of the Company and its Subsidiaries, taken as a whole, to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof other than to a Permitted Holder or to either of Parent or Holdco; (ii) the approval by the holders of Capital Stock of Parent or the Company, as the case may be, of any plan or proposal for the liquidation

or dissolution of Parent or the Company, as the case may be; (iii) any Person or Group (other than a Permitted Holder and any entity formed by a Permitted Holder solely for the purpose of owning Capital Stock of Parent) shall become the beneficial owner, directly or indirectly (with beneficial ownership being as defined and calculated as set forth in Rules 13d-3 and 13d-5 under the Exchange Act), of shares representing more than 50% of the Capital Stock (measured by voting power rather than number of shares) that is at the time entitled to vote for the election of the Board of Directors of Parent or the Company; or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company or Parent (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company or Parent, as applicable, was approved by a vote of a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death) to constitute a majority of the Board of Directors then in office.

(f) “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

(g) “Holdco” shall mean NACG Preferred Corp., a Canadian corporation.

(h) “Issue Price” shall mean $1,000 per Series A Preferred Share.

(i) “Initial Issuance Date” has the meaning ascribed to that term in Section 3.1.

(j) “IPO” shall mean shall mean an underwritten primary public offering of common shares of Parent, Holdco or the Company pursuant to a registration statement filed under the Securities Act or to a prospectus filed and duly receipted under any Canadian securities legislation after the Initial Issuance Date wherein the aggregate net proceeds (after deducting all costs, discounts, commissions and other expenses of the offering) to the Parent, Holdco or the Company, as applicable, are at least $100,000,000; provided, however, that the term “IPO” shall not include any registration statement or prospectus (i) relating to warrants, options or shares of Capital Stock granted or to be granted or sold primarily to employees, directors, or officers of the Company, Holdco or Parent (ii) filed pursuant to Rule 145 under the Securities Act or any successor or similar provision or relating to shares issued in connection with any acquisition, (iii) relating to any employee benefit plan or interests therein, (iv) relating solely to any preferred shares or debt securities, or (v) first filed prior to the Initial Issuance Date.

(k) “Junior Shares” shall mean the Series B Preferred Shares, the Common Shares and each other class of shares or series of preferred shares established after the Initial Issuance Date, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series A Preferred Shares or Parity Shares as to dividend rights, redemption rights or rights upon liquidation, winding-up or dissolution of the Company or otherwise.

(l) “Liquidation Event” shall mean a liquidation, winding-up or dissolution of the Company, whether voluntary or involuntary.

-2-

(m) “NACGI” shall mean North American Construction Group, Inc., a corporation incorporated under the federal laws of Canada.

(n) “outstanding”, when used with reference to shares, shall mean issued shares, excluding shares held by the Company or its Subsidiaries.

(o) “Parent” shall mean NACG Holdings Inc., a Canadian corporation.

(p) “Parity Shares” shall mean any class of capital shares or series of preferred shares established after the Initial Issuance Date, the terms of which expressly provide that such class or series will rank on a parity with the Series A Preferred Shares as to dividend rights, redemption rights or rights upon any Liquidation Event.

(q) “Permitted Holders” shall mean The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc. and Stephens Group, Inc. and their respective Affiliates (in each case, other than portfolio companies thereof).

(r) “Person” shall mean an individual, partnership (general or limited), corporation, limited liability company, unincorporated organization, association, joint stock company, trust or joint venture, or a governmental agency or political subdivision thereof.

(s) “Redemption Price” in respect of each Series A Preferred Share shall mean $1,000.

(t) “Securities Act” means the United States Securities Act of 1933, as amended from time to time, and any successor statute.

(u) “Series B Preferred Shares” shall mean the Series B Preferred Shares in the Capital Stock of the Company.

(v) “Subsidiary”, with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

2. Dividends.

2.1 The Series A Preferred Shares are not entitled to any dividends. For so long as any Series A Preferred Shares are outstanding, dividends shall not be paid (but shall otherwise accrue in accordance with the terms thereof) on the Series B Preferred Shares.

3. Redemption or Affiliate Purchase.

3.1 Subject to Section 6.2 and 6.3 and to applicable law, at any time after the date of the initial issuance of the Series A Preferred Shares (“Initial Issuance Date”), the Company, at its sole option, may redeem the then outstanding Series A Preferred Shares, in whole or in part (provided that any such partial redemption shall be for not less than 100 shares of Series A

-3-

Preferred Shares), at the Redemption Price in accordance with this Section 3. At any time, the Company may cause an Affiliate to purchase the then outstanding Series A Preferred Shares (an “Affiliate Purchase”), in whole or in part (provided that any such purchase shall be for not less than 100 Series A Preferred Shares), at the Redemption Price, in accordance with this Section 3. Any optional redemption or Affiliate Purchase of Parity Shares may only be effected if Series A Preferred Shares are redeemed or purchased pursuant to any Affiliate Purchase ratably with the Parity Shares in proportion to the respective redemption amounts otherwise payable among all holders of Series A Preferred Shares and of Parity Shares.

3.2 Subject to Sections 6.2 and 6.3 and applicable law but prior to the redemption of any then outstanding Series B Preferred Shares, the Company shall redeem all, and not less than all, of the outstanding Series A Preferred Shares at the Redemption Price on the earlier of (i) December 31, 2011 and (ii) the occurrence of an Accelerated Redemption Event; provided that, for greater certainty, the Company may, at its sole option, cause an Affiliate to purchase the then outstanding Series A Preferred Shares, in whole or in part, at the Redemption Price, in accordance with this Section 3.

3.3 The procedure for either a redemption or an Affiliate Purchase shall be as follows:

(a) A redemption by the Company shall be made only out of funds of the Company legally available therefor.

(b) The Company shall give notice of any redemption or Affiliate Purchase by mail, postage prepaid, not more than 60 nor less than 30 days before the date fixed for such redemption or purchase, to each holder of record of the Series A Preferred Shares to be redeemed or purchased appearing on the securities register of the Company as of the date of such notice at the address of said holder shown therein (the “Redemption or Purchase Call”). The Redemption or Purchase Call shall state the redemption or purchase date, the shares called for redemption or purchase, the Redemption Price and the place where the shares called for redemption or purchase will be redeemed or purchased and, upon presentation and surrender of the certificates of stock evidencing such shares, the Redemption Price therefor will be paid. If the redemption or purchase date falls on a date that is not a Business Day, then such redemption or purchase date shall be the first Business Day after the stated redemption or purchase date. The Redemption or Purchase Call shall state whether it is revocable or irrevocable by the Company at any time on or prior to the redemption or purchase date and stating whether the redemption or purchase is conditional upon the occurrence of one or more specified events or is unconditional.

(c) Subject to Sections 6.2 and 6.3, the Company may deposit (or, if applicable, cause an Affiliate to deposit) before the redemption or purchase date cash equal to the aggregate Redemption Price of the Series A Preferred Shares to be redeemed (or purchased by the Affiliate) (less applicable taxes required to be deducted or withheld) in an irrevocable trust with a bank or trust company having capital and surplus of not less than C$100,000,000 (a “Trust”) for the benefit of the holders of the Series A Preferred Shares to be redeemed or purchased. If a Redemption or Purchase Call stating that it is irrevocable and unconditional shall have been duly mailed, then upon making such deposit, or, if no such deposit is made, or if the Redemption or Purchase Call states that it is revocable or that the redemption or purchase is conditional, then upon such redemption or purchase date (provided that (i) the Redemption or

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Purchase Call, if revocable, has not been revoked, and (ii) the conditions, if any, to the redemption or purchase set forth in the Redemption or Purchase Call have been met or waived by the Company, the holders of the Series A Preferred Shares to be redeemed or purchased on such date shall cease to be shareholders with respect to such shares, such shares shall no longer be transferable by such holders on the securities register of the Company (except, in the case of an Affiliate Purchase, to such Affiliate and thereafter to any subsequent transferees from time to time), and such holders shall have no interest in or claim against the Company with respect to such shares except the right to receive payment of the Redemption Price upon surrender of their certificates. In the case of the occurrence of a redemption or purchase on the redemption or purchase date, any cash funds so deposited in a Trust and unclaimed at the end of two years from the date fixed for redemption or an Affiliate Purchase shall be repaid to the Company or such Affiliate upon its request, as applicable, after which the holders of the Series A Preferred Shares redeemed or purchased shall look only to the Company or such Affiliate for payment of the Redemption Price. In the case of the revocation of a Redemption or Purchase Call or the failure of a condition stated in a Redemption or Purchase Call that is not waived, any such funds so deposited shall be repaid to the Company or such Affiliate upon its request. The Board of Directors may cause the securities register of the Company to be closed after the Redemption or Purchase Call is sent to the holders of the Series A Preferred Shares to be redeemed or purchased.

(d) If less than all outstanding (i) Series A Preferred Shares or (ii) Parity Shares are to be redeemed or purchased at any time, the Series A Preferred Shares and Parity Shares to be redeemed or purchased shall be determined ratably in proportion to the respective aggregate redemption amounts otherwise payable (as nearly as may be possible) among all holders of Series A Preferred Shares and Parity Shares. For such purpose, if any holder shall hold Series A Preferred Shares evidenced by more than one certificate, such redemption or purchase also shall be allocated on such basis among whole numbers of shares represented by such certificates as such holder may request on a timely basis.

(e) Prior to the redemption or purchase date, as promptly as reasonably practicable after the Redemption Price can be determined, the Company shall deliver to each holder of shares to be redeemed or purchased a copy of the calculation of the Redemption Price.

(f) In the event that the Company revokes a Redemption or Purchase Call or any condition to a redemption or purchase set forth in a Redemption or Purchase Call is not met or waived, the Company may withdraw the Redemption or Purchase Call by notice to the holders of the Series A Preferred Shares by deposit of such notice, postage prepaid, in the regular mail, at any time on or prior to the redemption or purchase date addressed to each holder at the address for such holder in the shareholder records of the Company.

4. Liquidation.

4.1 Subject to Sections 6.2 and 6.3, in the event of a Liquidation Event, after payment or provision for payment of the debts and other liabilities of the Company, the holders of the Series A Preferred Shares that are not then subject to an irrevocable Redemption or Purchase Call shall be entitled to receive an amount in cash equal to the Redemption Price (the “Liquidation Payment”) before any distribution is made to holders of Junior Shares upon any

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such Liquidation Event. If, upon the occurrence of a Liquidation Event, the assets of the Company or proceeds thereof distributable among the holders of the Series A Preferred Shares and the holders of any Parity Shares are insufficient to pay in full all such preferential amounts payable to such holders, then all such assets of the Company and proceeds thereof thus distributable shall be distributed among the holders of Series A Preferred Shares and Parity Shares ratably in proportion to the respective aggregate amounts otherwise payable with respect thereto.

4.2 Notice of any liquidation (complete or partial), dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, shall be given by mail, postage prepaid, not less than 30 days before the payment date stated therein, to each holder of record of Series A Preferred Shares appearing on the securities register of the Company as of the date of such notice at the address of said holder shown therein. Such notice shall state a payment date, the amount of the Liquidation Payment, and the place where the Liquidation Payment shall be payable.

4.3 After payment in cash to the holders of the Series A Preferred Shares of the full amount of the Liquidation Payment with respect to the Series A Preferred Shares (less applicable taxes required to be deducted or withheld), the holders of the Series A Preferred Shares shall have no right or claim, based on their ownership of Series A Preferred Shares, to any of the remaining assets of the Company or proceeds thereof.

4.4 In the event of a Liquidation Event the Company may, at its sole option, prior to the payment of the Liquidation Payment therefor, cause an Affiliate of the Company to purchase the then outstanding Series A Preferred Shares in whole or in part upon payment of the Redemption Price. In such case the applicable provisions of Section 3 shall apply to such purchase, mutatis mutandis.

5. Voting.

5.1 The holders of Series A Preferred Shares shall have no voting rights whatsoever, except those set forth in Section 5.2 and those to which they may be mandatorily entitled under the Canada Business Corporations Act. For greater certainty, to the maximum extent permitted by applicable law, the holders of Series A Preferred Shares shall not be entitled to vote separately as a class or a series on any matter. In exercising such voting rights, each Series A Preferred Share shall be entitled to one vote.

5.2 Notwithstanding the foregoing, so long as any Series A Preferred Shares remain outstanding, and in addition to any other vote or consent of holders of Series A Preferred Shares required by law, the Company shall not without the affirmative vote at a meeting duly called of the holders of Series A Preferred Shares by not less than two-thirds of the votes cast by holders of Series A Preferred Shares, or the affirmative consent in writing by holders of not less than two-thirds of the then outstanding Series A Preferred Shares or the shareholder’s attorney authorized in writing authorize or approve the issuance of any shares of, or of any security convertible into, or exercisable or exchangeable for, Series A Preferred Shares or any Parity Shares or any other shares in the Company, which shares rank prior to Series A Preferred Shares

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in the payment of dividends or in the distribution of assets upon liquidation (complete or partial), dissolution or winding up of the affairs of the Company.

5.3 Notwithstanding anything in this Section 5 to the contrary, no holder of Series A Preferred Shares shall be entitled to such voting rights, and such holder will be prohibited from exercising such voting rights, to the extent that such holder’s being entitled to such voting rights would cause such holder or its Affiliates to be in violation of any law, regulation, order, rule or other requirement of any governmental authority restricting or prohibiting such holder or its affiliates from, directly or indirectly, owning, controlling, having the power to control, voting or having the power to vote the Series A Preferred Shares. Any Series A Preferred Shares for which voting rights shall not be permitted in accordance herewith shall be excluded for purposes of determining whether the required votes shall have been obtained or whether a quorum has been obtained on any matter to be voted upon by the holders of Series A Preferred Shares pursuant to this Section 5.

6. General Provisions.

6.1 The headings of the paragraphs, subparagraphs, clauses and subclauses of this schedule are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.

6.2 Payments of dividends, interest, premium and principal on, and exchange, redemption and repurchase of, Series A Preferred Shares by the Company (including through an Affiliate Purchase) are subject to restrictions contained in any credit, loan, indenture, note, bond or other agreement or instrument (including any guaranty, indenture or security instrument to which the Company or any of its Affiliates is a party) relating to debt for borrowed money or capitalized lease obligations to which the Company or any of its Affiliates is subject (as the same may be amended, renewed, supplemented, restated or otherwise modified, or as the same may be extended, refinanced, renewed or replaced) (collectively “Debt Instruments”). Notwithstanding anything contained herein to the contrary, if the Company is prohibited from making any such payment under a Debt Instrument, or if any such payment would breach or violate, or allow the acceleration of payments or exercise of rights or remedies under a Debt Instrument, the Company shall not make such payment hereunder until such time as it is not so restricted from making such payment under the Debt Instrument and such payment would not result in or allow such breach, violation, acceleration or exercise. For greater certainty, the Company shall not repurchase or redeem any Series A Preferred Shares except in compliance with restricted payments covenants in its indentures.

6.3 The Company (or in the case of an Affiliate Purchase, such Affiliate) is entitled to deduct and withhold from any payment on or in respect of the Series A Preferred Shares such amounts as the Company (or in the case of an Affiliate Purchase, such Affiliate) is required to deduct and withhold under the Income Tax Act (Canada), the United States Internal Revenue Code of 1986 or any provision of provincial, state, territorial, local or foreign tax law, in each case, as amended. Each holder of Series A Preferred Shares shall provide to the Company (or in the case of an Affiliate Purchase, such Affiliate) such information as the Company (or in the case of an Affiliate Purchase, such Affiliate) requests in order to determine the amount it is required to deduct and withhold, and in the absence of the Company or Affiliate, as the case may be,

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receiving such information on a timely basis, the Company or the Affiliate, as the case may be, shall withhold or deduct the tax at the maximum statutory rate. To the extent that amounts are so deducted and withheld and remitted to the appropriate governmental authority, such amounts are to be treated for all purposes as having been paid to the holder of the Series A Preferred Shares in respect of which such deduction and withholding was made.

6.4 All dollar amounts reflected herein are in reference to the official currency of Canada.

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Schedule B

Preferences and Rights of the

Series B Preferred Shares

1. Certain Definitions. In addition to the other terms defined herein, the following terms shall have the meanings ascribed to them below:

(a) “Accelerated Redemption Event” shall mean (i) the occurrence of a Change of Control or (ii) if there is an IPO, the later of (a) the consummation of the IPO or (b) the date on which all of the Company’s 8-3/4% Senior Notes due 2011 and the Company’s 9% Senior Secured Notes due 2010 are no longer outstanding.

(b) “Affiliate” shall, with respect to any specified Person, mean any other Person who directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

(c) “Business Day” shall mean any day that is not a Saturday, Sunday or national legal holiday in Edmonton, Alberta, Canada.

(d) “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of common stock and preferred stock of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing; and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing. For purposes of this definition, “common stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, and includes, without limitation, all series and classes of such common stock, and “preferred stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

(e) “Change of Control” means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets or properties of the Company and its Subsidiaries, taken as a whole, to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof other than to a Permitted Holder or to either of Parent or Holdco; (ii) the approval by the holders of Capital Stock of Parent or the Company, as the case may be, of any plan or proposal for the liquidation or dissolution of Parent or the Company, as the case may be; (iii) any Person or Group (other than a Permitted Holder and any entity formed by a Permitted Holder solely for the purpose of

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owning Capital Stock of Parent) shall become the beneficial owner, directly or indirectly (with beneficial ownership being as defined and calculated as set forth in Rules 13d-3 and 13d-5 under the Exchange Act), of shares representing more than 50% of the Capital Stock (measured by voting power rather than number of shares) that is at the time entitled to vote for the election of the Board of Directors of Parent or the Company; or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company or Parent (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company or Parent, as applicable, was approved by a vote of a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death) to constitute a majority of the Board of Directors then in office.

(f) “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

(g) “Holdco” shall mean NACG Preferred Corp., a Canadian corporation.

(h) “Issue Price” shall mean $1,000 per Series B Preferred Share.

(i) “Initial Issuance Date” has the meaning ascribed to that term in Section 3.1.

(j) “IPO” shall mean shall mean an underwritten primary public offering of common shares of Parent, Holdco or the Company pursuant to a registration statement filed under the Securities Act or to a prospectus filed and duly receipted under any Canadian securities legislation after the Initial Issuance Date wherein the aggregate net proceeds (after deducting all costs, discounts, commissions and other expenses of the offering) to the Parent, Holdco or the Company, as applicable, are at least $100,000,000; provided, however, that the term “IPO” shall not include any registration statement or prospectus (i) relating to warrants, options or shares of capital stock granted or to be granted or sold primarily to employees, directors, or officers of the Company, Holdco or Parent, (ii) filed pursuant to Rule 145 under the Securities Act or any successor or similar provision or relating to shares issued in connection with any acquisition, (iii) relating to any employee benefit plan or interests therein, (iv) relating solely to any preferred shares or debt securities, or (v) first filed prior to the Initial Issuance Date.

(k) “Junior Shares” shall mean the Common Shares and each other class of shares or series of preferred shares established after the Initial Issuance Date, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Preferred Shares or Parity Shares as to dividend rights, redemption rights or rights upon liquidation, winding-up or dissolution of the Company or otherwise.

(l) “Liquidation Event” shall mean a liquidation, winding-up or dissolution of the Company, whether voluntary or involuntary.

(m) “Liquidation Preference Amount” in respect of each Series B Preferred Share at the time of a Liquidation Event shall mean, subject to Section 5, an amount equal to the greatest of (i) two times the Issue Price, less the amount, if any, of dividends previously paid in

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cash on such Series B Preferred Share; (ii) an amount (taking into account the amount, if any, of any dividends previously paid in cash on such Series B Preferred Share) that provides a 40% rate of return, compounded annually, on the Issue Price from the Initial Issuance Date; and (iii) an amount that equals the quotient of (A) 25% of the arm’s length fair market value of the Junior Shares without taking into account the Series B Preferred Shares as determined by mutual agreement between the disinterested members of the Board of Directors of the Company and the holders of a majority of the Series B Preferred Shares or, in the event no mutual agreement is reached, of such fair market value as determined by a mutually acceptable investment bank, which such determination shall be final and binding, divided by (B) the number of Series B Preferred Shares then outstanding; provided that for the purposes of this calculation the amounts for each of (ii) and (iii) shall not exceed $13,333.33.

(n) “NACGI” shall mean North American Construction Group, Inc., a corporation incorporated under the federal laws of Canada.

(o) “outstanding”, when used with reference to shares, shall mean issued shares, excluding shares held by the Company or its subsidiaries.

(p) “Parent” shall mean NACG Holdings Inc., a Canadian corporation.

(q) “Parity Shares” shall mean any class of capital shares or series of preferred shares established after the Initial Issuance Date, the terms of which expressly provide that such class or series will rank on a parity with the Series B Preferred Shares as to dividend rights, redemption rights or rights upon any Liquidation Event.

(r) “Permitted Holders” shall mean The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc. and Stephens Group, Inc. and their respective Affiliates (in each case, other than portfolio companies thereof).

(s) “Person” shall mean an individual, partnership (general or limited), corporation, limited liability company, unincorporated organization, association, joint stock company, trust or joint venture, or a governmental agency or political subdivision thereof.

(t) “Redemption Price” in respect of each Series B Preferred Share shall mean, at any time, subject to Section 5, an amount equal to the greatest of (i) two times the Issue Price, less the amount, if any, of dividends previously paid in cash on such Series B Preferred Share; (ii) an amount (taking into account the amount, if any, of any dividends previously paid in cash on such Series B Preferred Share) that provides a 40% rate of return, compounded annually, on the Issue Price from the Initial Issuance Date; and (iii) an amount that equals the quotient of (A) 25% of the arm's length fair market value of the Junior Shares without taking into account the Series B Preferred Shares as determined by mutual agreement between the disinterested members of the Board of Directors of the Company and the holders of a majority of the Series B Preferred Shares or, in the event no mutual agreement is reached, of such fair market value as determined by a mutually acceptable investment bank, which such determination shall be final and binding, divided by (B) the number of Series B Preferred Shares then outstanding; provided that (X) for the purposes of this calculation the amounts for each of (ii) and (iii) shall not exceed $13,333.33 and (Y) in the case of a redemption as a result of the occurrence of a Change of

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Control in which the Company has agreed to the fair market value of the Company, then the fair market value shall be as so determined by the Company less, to the extent not already taken into account in such determination, the aggregate redemption price of any outstanding Series A Preferred Shares.

(u) “Securities Act” means the United States Securities Act of 1933, as amended from time to time, and any successor statute.

(v) “Series A Preferred Shares” shall mean the Series A Preferred Shares in the capital stock of the Company.

(w) “Subsidiary”, with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

2. Payment of Dividends.

2.1 Subject to Sections 2.2, 2.4, 2.5, 7 and 8.2, the holders of record of Series B Preferred Shares shall be entitled to be paid dividends when and as declared by the Board of Directors out of funds of the Company legally available for the payment of dividends, at the annual rate of 15% of the Issue Price of each share, payable annually on the last day of March in each year, beginning on March 31, 2006, except that if any such date is not a Business Day, then such dividend shall be payable on the first Business Day following such date (each of such dates being referred to herein as a “Series B Dividend Payment Date”).

2.2 Dividends on the Series B Preferred Shares shall be payable in cash and shall accrue with respect to each fiscal year of the Company (whether or not declared). For the fiscal year in which Series B Preferred Shares are initially issued, holders of Series B Preferred Shares shall only be entitled to that portion of accrued dividend for such fiscal year determined by multiplying the accrued dividend by a fraction, the denominator of which shall be 365 and the numerator of which shall be the actual number of calendar days from the Initial Issuance Date through the end of such fiscal year.

2.3 If at any time dividends with respect to the Series B Preferred Shares are not declared and paid in full but are payable pursuant to Section 2.1 on any Series B Dividend Payment Date (the “Omitted Dividends”), the Series B Preferred Shares shall accrue additional dividends on the amount of such Omitted Dividends remaining unpaid until such Omitted Dividends and all amounts accrued thereon have been paid. Such dividends shall be deemed to constitute accrued and unpaid dividends for all purposes hereof even if such additional dividends are not specifically mentioned in any particular context.

2.4 Dividends will be payable to the holders of record of the Series B Preferred Shares appearing on the securities register of the Company on such record dates as may be declared by the Board of Directors, not more than 60 days nor less than 10 days before the payment dates thereof, as may be fixed by the Board of Directors or a duly authorized committee thereof. Dividends on account of arrears for any past dividend periods for which dividends were

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payable may be declared and paid at any time, without reference to any regular dividend payment date, to holders of record on a date not more than 60 days nor less than 10 days before the payment date thereof, as may be fixed by the Board of Directors or a duly authorized committee thereof.

2.5 So long as any Series B Preferred Shares are outstanding, the Company will not declare or pay or set apart for payment any dividends or make any other distribution on Junior Shares, unless all cumulative unpaid dividends on Series B Preferred Shares accruing up to the most recent Series B Dividend Payment Date have been paid in cash and at the same time the Board of Directors declares out of funds of the Company legally available for the payment of dividends and pays a dividend on each Series B Preferred Share equal to the quotient of (i) 25% of the aggregate dividends to be paid on the Junior Shares, divided by (ii) the number of issued and outstanding Series B Preferred Shares; provided that, notwithstanding the foregoing, the Company may declare and pay dividends on Junior Shares if and to the extent permitted under Section 6.2(c)(B), (C), (D) or (E) without regard to, and without accruing or paying any dividend on the Series B Preferred Shares pursuant to, this Section 2.5.

2.6 So long as any Series B Preferred Shares are outstanding, the Company shall not declare or pay or set apart for payment any dividends or make any other distributions on Parity Shares. Notwithstanding the forgoing, the Company may declare and pay, or set apart for payment, fixed dividends on the Parity Shares if at such time all dividends that have accrued on the Series B Preferred Shares up to and including the most recent Series B Dividend Payment Date have been paid in full; if all such dividends on the Series B Preferred Shares are not so paid in full, all dividends declared and paid upon shares of the Series B Preferred Shares and any such Parity Shares shall be declared and paid pro rata (as nearly as may be) so that the amount of dividends declared and paid on a Series B Preferred Share and on such a Parity Share shall in all cases bear to each other the same ratio that accrued dividends payable but unpaid per share on the Series B Preferred Shares and such Parity Shares bear to each other.

2.7 Notwithstanding anything contained herein to the contrary, so long as any Series A Preferred Shares are outstanding, dividends shall not be paid (but shall otherwise accrue in accordance with this Section 2) on the Series B Preferred Shares.

3. Redemption or Affiliate Purchase.

3.1 Subject to Sections 7 and 8.2, and to the prior redemption of the Series A Preferred Shares, and to applicable law, at any time after the date of the initial issuance of the Series B Preferred Shares (“Initial Issuance Date”), the Company, at its sole option, may redeem the then outstanding Series B Preferred Shares, in whole or in part (provided that any such partial redemption shall be for not less than 100 shares of Series B Preferred Shares), at the Redemption Price in accordance with this Section 3. At any time, the Company may cause an Affiliate to purchase the then outstanding Series B Preferred Shares (an “Affiliate Purchase”), in whole or in part (provided that any such purchase shall be for not less than 100 Series B Preferred Shares), at the Redemption Price, in accordance with this Section 3. Any optional redemption or Affiliate Purchase of Parity Shares may only be effected if Series B Preferred Shares are redeemed or purchased pursuant to any Affiliate Purchase ratably with the Parity Shares in proportion to the

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respective redemption amounts otherwise payable among all holders of Series B Preferred Shares and of Parity Shares.

3.2 Subject to Sections 7 and 8.2 and applicable law and the prior redemption of the Series A Preferred Shares, the Company shall redeem all, and not less than all, of the outstanding Series B Preferred Shares at the Redemption Price on the earlier of (i) December 31, 2011 and (ii) the occurrence of an Accelerated Redemption Event; provided that, for greater certainty, the Company may, at its sole option, cause an Affiliate to purchase the then outstanding Series B Preferred Shares, in whole or in part, at the Redemption Price, in accordance with this Section 3.

3.3 The procedure for either a redemption or an Affiliate Purchase shall be as follows:

(a) A redemption by the Company shall be made only out of funds of the Company legally available therefor.

(b) The Company shall give notice of any redemption or Affiliate Purchase by mail, postage prepaid, not more than 60 nor less than 30 days before the date fixed for such redemption or purchase, to each holder of record of the Series B Preferred Shares to be redeemed or purchased appearing on the securities register of the Company as of the date of such notice at the address of said holder shown therein (the “Redemption or Purchase Call”). The Redemption or Purchase Call shall state the redemption or purchase date, the shares called for redemption or purchase, the Redemption Price and the place where the shares called for redemption or purchase will be redeemed or purchased and upon presentation and surrender of the certificates of stock evidencing such shares the Redemption Price therefor will be paid. If the redemption or purchase date falls on a date that is not a Business Day, then such redemption or purchase date shall be the first Business Day after the stated redemption or purchase date. The Redemption or Purchase Call shall state whether it is revocable or irrevocable by the Company at any time on or prior to the redemption or purchase date and stating whether the redemption or purchase is conditional upon the occurrence of one or more specified events or is unconditional.

(c) Subject to Sections 7 and 8.2, the Company may deposit (or, if applicable, cause an Affiliate to deposit) before the redemption or purchase date, cash equal to the aggregate Redemption Price of the Series B Preferred Shares to be redeemed (or purchased by the Affiliate) (less applicable taxes required to be deducted or withheld) in an irrevocable trust with a bank or trust company having capital and surplus of not less than C$100,000,000 (a “Trust”) for the benefit of the holders of the Series B Preferred Shares to be redeemed or purchased. If a Redemption or Purchase Call stating that it is irrevocable and unconditional shall have been duly mailed, then upon making such deposit, or, if no such deposit is made, or if the Redemption or Purchase Call states that it is revocable or that the redemption or purchase is conditional, then upon such redemption or purchase date (provided that (i) the Redemption or Purchase Call, if revocable, has not been revoked, and (ii) the conditions, if any, to the redemption or purchase set forth in the Redemption or Purchase Call have been met or waived by the Company), the holders of the Series B Preferred Shares to be redeemed or purchased on such date shall cease to be shareholders with respect to such shares, such shares shall no longer be transferable by such holders on the securities register of the Company (except, in the case of an Affiliate Purchase, to such Affiliate and thereafter to any subsequent transferees from time to time), and such holders shall have no interest in or claim against the Company with respect to such shares except the

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right to receive payment of the Redemption Price upon surrender of their certificates. In the case of the occurrence of a redemption or purchase on the redemption or purchase date, any cash funds so deposited in a Trust and unclaimed at the end of two years from the date fixed for redemption or an Affiliate Purchase shall be repaid to the Company or such Affiliate upon its request, as applicable, after which the holders of the Series B Preferred Shares redeemed or purchased shall look only to the Company or such Affiliate for payment of the Redemption Price. In the case of the revocation of a Redemption or Purchase Call or the failure of a condition stated in a Redemption or Purchase Call that is not waived, any such funds so deposited shall be repaid to the Company or such Affiliate upon its request. The Board of Directors may cause the securities register of the Company to be closed after the Redemption or Purchase Call is sent to the holders of the Series B Preferred Shares to be redeemed or purchased.

(d) If less than all outstanding (i) Series B Preferred Shares or (ii) Parity Shares are to be redeemed or purchased at any time, the Series B Preferred Shares and Parity Shares to be redeemed or purchased shall be determined ratably in proportion to the respective aggregate redemption amounts otherwise payable (as nearly as may be possible) among all holders of Series B Preferred Shares and Parity Shares. For such purpose, if any holder shall hold Series B Preferred Shares evidenced by more than one certificate, such redemption or purchase also shall be allocated on such basis among whole numbers of shares represented by such certificates as such holder may request on a timely basis.

(e) Prior to the redemption or purchase date, as promptly as reasonably practicable after the Redemption Price can be determined, the Company shall deliver to each holder of shares to be redeemed or purchased a copy of the calculation of the Redemption Price.

(f) In the event that the Company revokes a Redemption or Purchase Call or any condition to a redemption or purchase set forth in a Redemption or Purchase Call is not met or waived, the Company may withdraw the Redemption or Purchase Call by notice to the holders of the Series B Preferred Shares by deposit of such notice, postage prepaid, in the regular mail, at any time on or prior to the redemption or purchase date addressed to each holder at the address for such holder in the shareholder records of the Company.

4. Liquidation.

4.1 Subject to Sections 7 and 8.2, in the event of a Liquidation Event, after payment or provision for payment of the debts and other liabilities of the Company and payment or provision for payment of the redemption price in respect of the Series A Preferred Shares, the holders of the Series B Preferred Shares that are not then subject to an irrevocable Redemption or Purchase Call shall be entitled to receive an amount in cash equal to the Liquidation Preference Amount (the “Liquidation Payment”) before any distribution is made to holders of Junior Shares upon any such Liquidation Event. If, upon the occurrence of a Liquidation Event, the assets of the Company or proceeds thereof distributable among the holders of the Series B Preferred Shares and the holders of any Parity Shares are insufficient to pay in full all such preferential amounts payable to such holders, then all such assets of the Company and proceeds thereof thus distributable shall be distributed among the holders of Series B Preferred Shares and Parity

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Shares ratably in proportion to the respective aggregate amounts otherwise payable with respect thereto.

4.2 Notice of any liquidation (complete or partial), dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, shall be given by mail, postage prepaid, not less than 30 days before the payment date stated therein, to each holder of record of Series B Preferred Shares appearing on the securities register of the Company as of the date of such notice at the address of said holder shown therein. Such notice shall state a payment date, the amount of the Liquidation Payment (if known at such time), and the place where the Liquidation Payment shall be payable.

4.3 After payment in cash to the holders of the Series B Preferred Shares of the full amount of the Liquidation Payment with respect to the Series B Preferred Shares (less applicable taxes required to be deducted or withheld), the holders of the Series B Preferred Shares shall have no right or claim, based on their ownership of Series B Preferred Shares, to any of the remaining assets of the Company or proceeds thereof.

4.4 In the event of a Liquidation Event the Company may, at its sole option, prior to the payment of the Liquidation Payment therefor, cause an Affiliate of the Company to purchase the then outstanding Series B Preferred Shares in whole or in part upon payment of the Liquidation Preference Amount. In such case the applicable provisions of Section 3 shall apply to such purchase, mutatis mutandis.

5. Limitation on Liquidation/Redemption Payments.

5.1 Notwithstanding anything contained herein to the contrary, in no event shall the aggregate amount of all Redemption Prices and Liquidation Preference Amounts payable hereunder by the Company and its Affiliates exceed $100,000,000 (the “Cap”). If such amount payable to Series B Preferred Shares would otherwise cause the Cap to be exceeded (i) the portion of such amount not in excess of the Cap shall be paid to the holders entitled to such amount rateably in proportion to the respective amounts otherwise payable to them in respect of such payment and (ii) thereafter the Redemption Amount and the Liquidation Preference Amount shall each be equal to $1.00.

6. Voting.

6.1 The holders of Series B Preferred Shares shall have no voting rights whatsoever, except those set forth in Section 6.2 and those to which they may be mandatorily entitled under the Canada Business Corporations Act. For greater certainty, to the maximum extent permitted by applicable law, the holders of Series B Preferred Shares shall not be entitled to vote separately as a class or a series on any matter. In exercising such voting rights, each Series B Preferred Share shall be entitled to one vote.

6.2 Notwithstanding the foregoing, so long as any Series B Preferred Shares remain outstanding, and in addition to any other vote or consent of holders of Series B Preferred Shares required by law, the Company shall not, and shall not permit any of its subsidiaries to, without the affirmative vote at a meeting duly called of the holders of Series B Preferred Shares by not less than two-thirds of the votes cast by holders of Series B Preferred Shares, or the affirmative

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consent in writing by holders of not less than two-thirds of the then outstanding Series B Preferred Shares or the shareholder’s attorney authorized in writing:

(a) authorize or approve the issuance of any shares of, or of any security convertible into, or exercisable or exchangeable for, Series B Preferred Shares or any Parity Shares or any other shares in the Company, which shares rank prior to Series B Preferred Shares in the payment of dividends or in the distribution of assets upon liquidation (complete or partial), dissolution or winding up of the affairs of the Company;

(b) amend, alter or repeal any of the provisions of this Schedule B or otherwise amend, alter or repeal the Articles of Incorporation of the Company so as to (i) reclassify the Series B Preferred Shares; (ii) increase the authorized number of Series B Preferred Shares; (iii) decrease the amount of dividends to be paid with respect to the Series B Preferred Shares pursuant to Section 2 hereof; or (iv) decrease the Liquidation Preference Amount or the Redemption Price; provided, that an amendment of the Articles of Incorporation shall not require the vote or consent of any of the holders of the Series B Preferred Shares in order to authorize or create, or to increase the authorized amount of, any Junior Shares; or

(c) (i) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Junior Shares of the Company) on or in respect of any of the Company’s Junior Shares; or (ii) purchase, redeem or otherwise acquire or retire for value any Junior Shares of the Company; except that the following shall not be prohibited, and may be effected without the vote or consent of the holders of Series B Preferred Shares, (A) the redemption, repurchase, or other acquisition or retirement for value of any Junior Shares of the Company, either (x) solely in exchange for Junior Shares of the Company or capital stock of Parent or (y) through the application of net proceeds of a substantially concurrent sale for cash (other than to a subsidiary of the Company) of Junior Shares of the Company; (B) the redemption, repurchase, or other acquisition or retirement of, Junior Shares of the Company (or the declaration and payment of a dividend, or the making of a distribution, on Junior Shares for the purpose of providing funds for the redemption, repurchase, or other acquisition or retirement of capital stock of Parent by Holdco or Parent) from current or former officers, directors and employees of the Company and/or the Parent or any of their subsidiaries at any time or from their authorized representatives upon the death, disability or termination of employment of such employees or termination of their seat on the board of the Company and/or the Parent, in an aggregate amount not to exceed $2.0 million in any calendar year; (C) payments to Holdco to pay its or Parent’s operating and administrative expenses including, without limitation, directors fees, employee salaries and other compensation, legal, accounting and audit expenses, compliance expenses and similar Canadian compliance expenses and corporate franchise and other taxes, whether similar or dissimilar, in each case arising from Holdco’s ownership of the Company, Parent’s ownership of Holdco or the Company’s businesses, in an amount not to exceed $1.0 million per fiscal year; (D) payments to Holdco pursuant to any reasonable tax sharing agreement or arrangement but only to the extent that amounts payable from time to time by the Company under any such agreement do not exceed the corresponding tax payments that the Company would have been required to make to any relevant taxing authority had the Company not joined in such consolidated or combined return, but instead had filed returns including only the Company; or (E) payments in an amount not to exceed, in the aggregate, in any calendar year, the sum of (i) $1.0 million and (ii) any amounts payable by the Company in

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relation to advisory services pursuant to any agreements entered into on or prior to the Initial Issuance Date.

6.3 Notwithstanding anything in this Section 6 to the contrary, no holder of Series B Preferred Shares shall be entitled to such voting rights, and such holder will be prohibited from exercising such voting rights, to the extent that such holder's being entitled to such voting rights would cause such holder or its Affiliates to be in violation of any law, regulation, order, rule or other requirement of any governmental authority restricting or prohibiting such holder or its affiliates from, directly or indirectly, owning, controlling, having the power to control, voting or having the power to vote the Series B Preferred Shares. Any Series B Preferred Shares for which voting rights shall not be permitted in accordance herewith shall be excluded for purposes of determining whether the required votes shall have been obtained or whether a quorum has been obtained on any matter to be voted upon by the holders of Series B Preferred Shares pursuant to this Section 6.

7. Withholding Amounts

7.1 The Company (or in the case of an Affiliate Purchase, such Affiliate) is entitled to deduct and withhold from any dividend or other payment on or in respect of the Series B Preferred Shares such amounts as the Company (or in the case of an Affiliate Purchase, such Affiliate) is required to deduct and withhold under the Income Tax Act (Canada), the United States Internal Revenue Code of 1986 or any provision of provincial, state, territorial, local or foreign tax law, in each case, as amended. Each holder of Series B Preferred Shares shall provide to the Company (or in the case of an Affiliate Purchase, such Affiliate) such information as the Company (or in the case of an Affiliate Purchase, such Affiliate) requests in order to determine the amount it is required to deduct and withhold, and in the absence of the Company or Affiliate, as the case may be, receiving such information on a timely basis, the Company or the Affiliate, as the case may be, shall withhold or deduct the tax at the maximum statutory rate. To the extent that amounts are so deducted and withheld and remitted to the appropriate governmental authority, such amounts are to be treated for all purposes as having been paid to the holder of the Series B Preferred Shares in respect of which such deduction and withholding was made.

8. General Provisions.

8.1 The headings of the paragraphs, subparagraphs, clauses and subclauses of this schedule are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.

8.2 Payments of dividends, interest, premium and principal on, and exchange, redemption and repurchase of, Series B Preferred Shares by the Company (including through an Affiliate Purchase) are subject to restrictions contained in any credit, loan, indenture, note, bond or other agreement or instrument (including any guaranty, indenture or security instrument to which the Company or any of its Affiliates is a party) relating to debt for borrowed money or capitalized lease obligations to which the Company or any of its Affiliates is subject (as the same may be amended, renewed, supplemented, restated or otherwise modified, or as the same may be extended, refinanced, renewed or replaced) (collectively “Debt Instruments”). Notwithstanding

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anything contained herein to the contrary, if the Company is prohibited from making any such payment under a Debt Instrument, or if any such payment would breach or violate, or allow the acceleration of payments or exercise of rights or remedies under a Debt Instrument, the Company shall not make such payment hereunder until such time as it is not so restricted from making such payment under the Debt Instrument and such payment would not result in or allow such breach, violation, acceleration or exercise. For greater certainty, the Company shall not repurchase or redeem any Series B Preferred Shares except in compliance with the restricted payments covenants in its indentures.

8.3 All dollar amounts reflected herein are in reference to the official currency of Canada.

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Schedule C

Rights of the

Common Shares

1. The holders of the common shares shall be entitled to one vote for each common share held at all meetings of the shareholders, except meetings at which only holders of another specified class of shares are entitled to vote.

2. Subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the corporation, the holders of the common shares shall be entitled to receive any dividend declared by the corporation and to receive the remaining property of the corporation upon liquidation, dissolution, winding-up or other distribution of assets.

Date	Nam - Nom	Signature	Capacity of - en qualité
2005-05-18	CHRIS HAYMAN	/s/    CHRIS HAYMAN	AUTHORIZED OFFICER
			Page 13 of 13

EX-4.1

EXHIBIT 4.1

EXECUTION COPY

NORTH AMERICAN ENERGY PARTNERS INC.,

as the Issuer,

EACH OF THE GUARANTORS PARTY HERETO,

as Guarantors,

and

WELLS FARGO BANK, N.A.,

as Trustee.

INDENTURE

Dated as of May 19, 2005

9% Senior Secured Notes due 2010

CROSS-REFERENCE TABLE

Trust Indenture Act Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.03; 7.08; 7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	2.05
(b)	12.03
(c)	12.03
313(a)	7.06
(b)(1)	7.06
(b)(2)	7.06
(c)	7.06, 12.02
(d)	7.06
314(a)	4.03; 4.04, 12.05
(b)	13.02(b)
(c)(2)	12.04
(c)(3)	12.04
(c)(3)	N.A.
(d)	13.03(c)
(e)	12.05
(f)	N.A.
315(a)	7.01(b)
(b)	7.05, 12.02
(c)	7.01(a)
(d)	7.01(c)
(e)	6.11
316(a)(last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N.A.
(b)	6.07
(c)	N.A.
317(a)(1)	6.08
(a)(2)	6.09
(b)	2.04
318(a)	12.01
(b)	N.A.
(c)	12.01

N.A. means Not Applicable

NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS

			Page
ARTICLE I           DEFINITIONS AND INCORPORATION BY REFERENCE			1
	Section 1.01.	Definitions	1
	Section 1.02.	Other Definitions	23
	Section 1.03.	Incorporation by Reference of Trust Indenture Act	23
	Section 1.04.	Rules of Construction	24
	Section 1.05.	Acts of Holders	24
ARTICLE II          THE NOTES			26
	Section 2.01.	Form and Dating	26
	Section 2.02.	Execution and Authentication	27
	Section 2.03.	Registrar and Paying Agent	27
	Section 2.04.	Paying Agents to Hold Money in Trust	28
	Section 2.05.	Holder Lists	28
	Section 2.06.	Transfer and Exchange	28
	Section 2.07.	Replacement Notes	36
	Section 2.08.	Outstanding Notes	36
	Section 2.09.	Treasury Notes; When Notes Are Disregarded	37
	Section 2.10.	Temporary Notes	37
	Section 2.11.	Cancellation	37
	Section 2.12.	Defaulted Interest.	37
	Section 2.13.	Persons Deemed Owners	38
	Section 2.14.	CUSIP Numbers	38
	Section 2.15.	Designation	38
	Section 2.16.	Interest Act Disclosure	38
	Section 2.17.	Limitation on Interest	38
ARTICLE III         REDEMPTION AND REPURCHASE			39
	Section 3.01.	Notices to Trustee	39
	Section 3.02.	Selection of Notes	39
	Section 3.03.	Notice of Optional or Special Redemption	40
	Section 3.04.	Effect of Notice of Redemption	41
	Section 3.05.	Deposit of Redemption Price or Purchase Price	41
	Section 3.06.	Notes Redeemed or Repurchased in Part	41
	Section 3.07.	Optional Redemption	41

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TABLE OF CONTENTS

(continued)

			Page
	Section 3.08.	Optional Redemption Upon Public Equity Offerings	42
	Section 3.09.	Redemption for Taxation Reasons	42
	Section 3.10.	Repurchase upon Change of Control Offer	43
	Section 3.11.	Repurchase upon Application of Net Cash Proceeds	44
ARTICLE IV         COVENANTS			46
	Section 4.01.	Payment of Notes	46
	Section 4.02.	Maintenance of Office or Agency	46
	Section 4.03.	Reports to Holders	47
	Section 4.04.	Compliance Certificate	47
	Section 4.05.	Payment of Taxes and Other Claims.	47
	Section 4.06.	Stay, Extension and Usury Laws	48
	Section 4.07.	Limitation on Restricted Payments	48
	Section 4.08.	Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries	50
	Section 4.09.	Limitation on Incurrence of Additional Indebtedness	52
	Section 4.10.	Limitation on Asset Sales	54
	Section 4.11.	Limitations on Transactions with Affiliates	56
	Section 4.12.	Limitation on Liens	58
	Section 4.13.	Continued Existence	58
	Section 4.14.	Insurance Matters	58
	Section 4.15.	Offer to Repurchase upon Change of Control	58
	Section 4.16.	Additional Guarantees	59
	Section 4.17.	Payments for Consent	60
	Section 4.18.	Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries	60
	Section 4.19.	Conduct of Business	60
	Section 4.20.	Limitations on Sale and Leaseback Transactions	60
	Section 4.21.	Limitation on Designation of Unrestricted Subsidiaries	61
	Section 4.22.	Limitation on Layering	62
	Section 4.23.	Impairment of Security Interest	62
	Section 4.24.	Real Estate Mortgages and Filings	62
	Section 4.25.	Leasehold Mortgages and Filings	63
	Section 4.26.	Landlord, Bailee and Consignee Waivers	63

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TABLE OF CONTENTS

(continued)

			Page
ARTICLE V          SUCCESSORS			64
	Section 5.01.	Merger, Consolidation and Sale of Assets	64
	Section 5.02.	Successor Corporation Substituted	66
ARTICLE VI         DEFAULTS AND REMEDIES			66
	Section 6.01.	Events of Default.	66
	Section 6.02.	Acceleration	68
	Section 6.03.	Other Remedies	68
	Section 6.04.	Waiver of Past Defaults	69
	Section 6.05.	Control by Majority	69
	Section 6.06.	Limitation on Suits	69
	Section 6.07.	Rights of Holders of Notes to Receive Payment	70
	Section 6.08.	Collection Suit by Trustee	70
	Section 6.09.	Trustee May File Proofs of Claim	70
	Section 6.10.	Priorities	70
	Section 6.11.	Undertaking for Costs	71
	Section 6.12.	Restoration of Rights and Remedies	71
ARTICLE VII       TRUSTEE			71
	Section 7.01.	Duties of Trustee	71
	Section 7.02.	Rights of Trustee	72
	Section 7.03.	Individual Rights of Trustee	73
	Section 7.04.	Trustee’s Disclaimer	73
	Section 7.05.	Notice of Defaults	73
	Section 7.06.	Reports by Trustee to Holders of the Notes	73
	Section 7.07.	Compensation, Reimbursement and Indemnity	74
	Section 7.08.	Replacement of Trustee	75
	Section 7.09.	Successor Trustee by Merger, Etc	75
	Section 7.10.	Eligibility; Disqualification	76
	Section 7.11.	Preferential Collection of Claims Against Company	76
	Section 7.12.	Trustee as Agent	76
	Section 7.13.	Sub-Collateral Agent	76
ARTICLE VIII     LEGAL DEFEASANCE AND COVENANT DEFEASANCE			77
	Section 8.01.	Option to Effect Legal Defeasance or Covenant Defeasance	77

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TABLE OF CONTENTS

(continued)

			Page
	Section 8.02.	Legal Defeasance and Discharge	77
	Section 8.03.	Covenant Defeasance	78
	Section 8.04.	Conditions to Legal or Covenant Defeasance	79
	Section 8.05.	Deposited Money and U.S. Government Securities to Be Held in Trust; Other Miscellaneous Provisions	80
	Section 8.06.	Repayment to Company	80
	Section 8.07.	Reinstatement	81
ARTICLE IX        AMENDMENT, SUPPLEMENT AND WAIVER			81
	Section 9.01.	Without Consent of Holders of Notes	81
	Section 9.02.	With Consent of Holders of Notes	82
	Section 9.03.	Compliance with TIA	83
	Section 9.04.	Revocation and Effect of Consents	83
	Section 9.05.	Notation on or Exchange of Notes	84
	Section 9.06.	Trustee to Sign Amendment, Etc	84
ARTICLE X         GUARANTEE			84
	Section 10.01.	Unconditional Guarantee	84
	Section 10.02.	Severability	85
	Section 10.03.	Limitation of Guarantor’s Liability	85
	Section 10.04.	Release of Guarantor	85
	Section 10.05.	Contribution	86
	Section 10.06.	Waiver of Subrogation	86
	Section 10.07.	Execution of Guarantee	87
	Section 10.08.	Waiver of Stay, Extension or Usury Laws	87
ARTICLE XI         SATISFACTION AND DISCHARGE			87
	Section 11.01.	Satisfaction and Discharge	87
	Section 11.02.	Deposited Funds to Be Held in Trust; Other Miscellaneous Provisions	88
	Section 11.03.	Repayment to Company	89
	Section 11.04.	Reinstatement	89
ARTICLE XII       MISCELLANEOUS			89
	Section 12.01.	Trust Indenture Act Controls	89
	Section 12.02.	Notices	89
	Section 12.03.	Communication by Holders of Notes with Other Holders of Notes	91

-iv-

TABLE OF CONTENTS

(continued)

			Page
	Section 12.04.	Certificate and Opinion as to Conditions Precedent	91
	Section 12.05.	Statements Required in Certificate or Opinion	91
	Section 12.06.	Rules by Trustee and Agents	91
	Section 12.07.	No Personal Liability of Directors, Officers, Employees and Stockholders	92
	Section 12.08.	Judgment Currency	92
	Section 12.09.	Payment of Additional Amounts	92
	Section 12.10.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	94
	Section 12.11.	No Adverse Interpretation of Other Agreements	95
	Section 12.12.	Successors	95
	Section 12.13.	Severability	95
	Section 12.14.	Counterpart Originals	95
	Section 12.15.	Table of Contents, Headings, Etc	95
	Section 12.16.	Qualification of Indenture	95
ARTICLE XIII     COLLATERAL			95
	Section 13.01.	Grant of Security Interest	95
	Section 13.02.	Recording and Opinions	96
	Section 13.03.	Release of Collateral	97
	Section 13.04.	Specified Releases of Collateral	98
	Section 13.05.	Release upon Satisfaction or Defeasance of All Outstanding Obligations	98
	Section 13.06.	Form and Sufficiency of Release	98
	Section 13.07.	Purchaser Protected	99
	Section 13.08.	Authorization of Actions To Be Taken by the Trustee and each Sub-Collateral Agent Under the Collateral Agreements	99
	Section 13.09.	Authorization of Receipt of Funds by the Trustee Under the Collateral Agreements	100
	Section 13.10.	Intercreditor Agreement	100

-v-

EXHIBITS

Exhibit A	Form of Series A Note
Exhibit B	Form of Series B Note
Exhibit C	Form of Guarantee
Exhibit D(1)	Form of Regulation S Certificate
Exhibit D(2)	Form of Certificate to Be Delivered upon Exchange or Registration of Transfer of Notes
Exhibit E	Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors
Exhibit F	Form of Certificate to Be Delivered in Connection with Transfers Pursuant to Regulation S
Exhibit G	Form of Landlord, Equipment Lessor, Bailee and Consignee Waivers

NOTE: This Table of Contents shall not, for any purpose, be deemed to be part of this Indenture.

INDENTURE, dated as of May 19, 2005, among NORTH AMERICAN ENERGY PARTNERS INC., a Canadian federal corporation (the “Company”), the Guarantors (as defined herein) and WELLS FARGO BANK, N.A., as trustee (the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Company has duly authorized the creation of two series of the Notes (as hereinafter defined), of the tenor and in an initial aggregate principal amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture;

WHEREAS, all things necessary to make the Notes, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with the terms of the Notes and this Indenture, respectively, have been done; and

WHEREAS, upon the issuance of the Series B Notes or the effectiveness of a registration statement filed in connection with the Exchange Offer, this Indenture will be subject to the provisions of the TIA (as hereinafter defined) that are required to be a part of this Indenture and shall, to the extent applicable, be governed by such provisions. Prior thereto, the provisions of said TIA will apply to this Indenture only to the extent expressly provided herein.

NOW, THEREFORE, each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined below) of the Company’s 9% Senior Secured Notes due 2010.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

“8 ³/4% Senior Notes Indenture” means the Indenture, dated as of November 26, 2003, among the Company, the guarantors parties thereto and Wells Fargo Bank, N.A., as trustee.

“Acquired Indebtedness” means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with or into the Company or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation and which Indebtedness is without recourse to the Company or any of its Subsidiaries or to any of their respective properties or assets other than the Person or the assets to which such Indebtedness related prior to the time such Person became a Restricted Subsidiary of the Company or the time of such acquisition, merger or consolidation.

“Additional Interest” means all “Additional Interest” on Series A Notes then owing pursuant to and as defined in Section 5 of the Registration Rights Agreement or the comparable section of any registration rights agreement entered into in connection with the issuance of any Additional Notes.

“Additional Notes” means Notes issued pursuant to Article II and in compliance with Section 4.09, in addition to and having substantially the same terms as the US$60,481,000 aggregate principal amount of Series A Notes issued on the Issue Date or as the Series B Notes issued in exchange therefor.

1

“Administrative Agent” has the meaning set forth in the definition of the term “Credit Agreement.”

“Advisory Services Agreement” means that certain letter agreement dated October 31, 2003, among the Company, NACG Preferred, Holdings and the Equity Investors.

“Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative of the foregoing.

“Agent” means any Registrar, Paying Agent, co-registrar or Sub-Collateral Agent.

“Applicable Indebtedness” means:

(1) in respect of any asset that is the subject of an Asset Sale at a time when such asset constitutes Collateral, Indebtedness that is pari passu with the Notes and secured at such time by such asset; or

(2) in respect of any other asset, Indebtedness that is pari passu with the Notes.

“Asset Acquisition” means (1) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company, or (2) the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any Person (other than a Restricted Subsidiary of the Company) that constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business.

“Asset Sale” means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company of: (1) any Capital Stock (other than directors’ qualifying shares) of any Restricted Subsidiary of the Company; or (2) any other property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall not include: (a) a transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive aggregate consideration of less than $5.0 million; (b) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted under Section 5.01; (c) any Restricted Payment permitted by Section 4.07 or that constitutes a Permitted Investment; (d) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business; (e) disposals or replacements of damaged, obsolete or worn out equipment; and (f) dispositions in connection with Permitted Liens.

“Bankruptcy Law” means Title 11, U.S. Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangements Act (Canada), the Winding-Up and Restructuring Act (Canada), or any similar U.S. federal, state, provincial or foreign law for the reorganization or relief of debtors, including laws providing for any plan of compromise or arrangement or other corporate proceeding involving or affecting creditors.

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“Board of Directors” means, as to any Person, the board of directors (or similar governing body) of such Person or any duly authorized committee thereof.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Borrowing Base” means, as at any date of determination, the lesser of:

(1) the sum of:

(a) 10% of Consolidated PP&E; and

(b) 100% of the value of accounts receivable of the Company and its Restricted Subsidiaries on a consolidated basis arising in the ordinary course of business net of any reserves or write-offs in respect thereof as determined in accordance with GAAP; and

(2) $55.0 million.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, Toronto, Ontario or Calgary, Alberta or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date, Redemption Date, Purchase Date or a day on which an action is to be taken is not a Business Day, payment may be made, or such action may be taken, on the next succeeding day that is a Business Day, and no interest shall accrue for the intervening period.

“Canadian Securities Laws” means the laws, regulations, rules, policies, rulings and guidelines applicable to trading securities in each province and territory of Canada.

“Canadian Securities Regulators” means the securities regulatory authorities in the provinces and territories of Canada.

“Capital Stock” means:

(1) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing; and

(2) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person, and all options, warrants or other rights to purchase or acquire any of the foregoing.

“Capitalized Lease Obligation” means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP.

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“Cash Equivalents” means:

(1) obligations issued by, or unconditionally guaranteed by, the United States or Canadian Government or issued by any agency thereof and backed by the full faith and credit of the United States or Canada, as the case may be, in each case maturing within one year from the date of acquisition thereof;

(2) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Ratings Group or at least P-1 from Moody’s Investors Services, Inc. or R-1 High by Dominion Bond Rating Service Limited;

(3) certificates of deposit, eurodollar time deposits or bankers’ acceptances maturing within one year from the date of acquisition thereof and overnight bank deposits, in each case issued by any bank organized under the laws of Canada or any province thereof or the United States of America or any state thereof or the District of Columbia or any U.S. or Canadian branch of a foreign bank having at the date of acquisition thereof combined net capital and surplus of not less than US$250.0 million;

(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (1) or (3) above entered into with any bank meeting the qualifications specified in clause (3) above; and

(5) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (4) above.

“Change of Control” means the occurrence of one or more of the following events:

(1) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets or properties of the Company and its Subsidiaries, taken as a whole, to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with the provisions of this Indenture) other than to a Permitted Holder or to either of Holdings or NACG Preferred; provided that such sale, lease, exchange or other transfer is made in accordance with Section 5.01(a);

(2) there is a report filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as the term “offeror” is defined in Section 89(1) of the Securities Act (Ontario) for the purpose of Section 101 of the Securities Act (Ontario), or any successor provision to either of the foregoing), other than the Company, any Restricted Subsidiary of the Company or any employee benefit plan of either the Company, any Restricted Subsidiary of the Company, or any Permitted Holder has acquired beneficial ownership (within the meaning of the Securities Act (Ontario)) of, or the power to exercise control or direction over, any Capital Stock or Securities convertible into, any Capital Stock of the Company, that together with such offeror’s securities (as the term “offeror’s securities” is defined in Section 89(1) of the Securities Act (Ontario) or any successor provision thereto in relation to the Capital Stock of the Company) would constitute Voting Stock of the Company representing more than 50% of the total voting power attached to all Voting Stock of the Company then outstanding;

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(3) the approval by the holders of Capital Stock of Holdings or the Company, as the case may be, of any plan or proposal for the liquidation or dissolution of Holdings or the Company, as the case may be (whether or not otherwise in compliance with the provisions of this Indenture);

(4) any Person or Group (other than a Permitted Holder and any entity formed by a Permitted Holder solely for the purpose of owning Capital Stock of Holdings) shall become the beneficial owner, directly or indirectly (with beneficial ownership being as defined and calculated as set forth in Rules 13d-3 and 13d-5 under the Exchange Act), of shares representing more than 50% of the Capital Stock (measured by voting power rather than number of shares) that is at the time entitled to vote for the election of the Board of Directors of Holdings or the Company; or

(5) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company or Holdings (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company or Holdings, as applicable, was approved by a vote of a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death) to constitute a majority of the Board of Directors then in office.

“Clearstream” means Clearstream Banking, Societe Anonyme, Luxembourg.

“Collateral” shall mean all real and personal property of the Company or any Guarantor, whether now owned or hereafter acquired, upon which a Lien securing the Obligations under this Indenture, the Notes, any Guarantee or any Collateral Agreement is granted or purported to be granted under any Collateral Agreement.

“Collateral Agent” has the meaning set forth in the definition of the term “Credit Agreement.”

“Collateral Agreements” means, as of the Issue Date, the Debentures, Mortgages, Pledge Agreements and Deposit Instruments granted by the Company or any Guarantor and thereafter, such documents, together with any other agreement or instrument granted to the Trustee or Sub-Collateral Agent by the Company or any Guarantor from time under which it grants a Lien in any of its assets to secure the Notes or its Guarantee, respectively. “Collateral Agreement” shall mean any one of the foregoing.

“Commission” means the Securities and Exchange Commission.

“Common Stock” of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock.

“Company” means North American Energy Partners Inc., a Canadian federal corporation, or any successor obligor under this Indenture and the Notes pursuant to Article V.

“Consolidated EBITDA” means, with respect to any Person, for any period, the sum (without duplication) of:

(1) Consolidated Net Income; and

(2) to the extent Consolidated Net Income has been reduced thereby:

(a) all income taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period;

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(b) Consolidated Interest Expense; and

(c) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Income for such period,

all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP.

“Consolidated Fixed Charge Coverage Ratio” means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the latest four full fiscal quarters (the “Four Quarter Period”) ending prior to the date of the transaction or event giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio for which financial statements are available (the “Transaction Date”) to Consolidated Fixed Charges of such Person for the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition and the definitions of such terms, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

(1) the incurrence or repayment, repurchase, defeasance, discharge or other retirement of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment, repurchase, defeasance, discharge or other retirement of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, repurchase, defeasance, discharge or other retirement, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and

(2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA (including any pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Exchange Act) attributable to the assets which are the subject of the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period; provided that the Consolidated EBITDA of any Person acquired shall be included only to the extent includible pursuant to the definition of the term “Consolidated Net Income.” If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness.

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Furthermore, in calculating “Consolidated Fixed Charges” for purposes of determining the denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage Ratio”:

(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date (including Indebtedness actually incurred on the Transaction Date) and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and

(2) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

“Consolidated Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

(1) Consolidated Interest Expense; plus

(2) the product of (x) the amount of all dividend payments on any Disqualified Capital Stock of such Person and any series of Preferred Stock of such Person (other than dividends paid in Qualified Capital Stock) paid or accrued during such period times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, Canadian federal, state, provincial, territorial and local income tax rate of such Person, expressed as a decimal.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:

(1) the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, determined on a consolidated basis in accordance with GAAP, including without limitation: (a) any amortization of debt discount and amortization of deferred financing costs; (b) the net costs under Interest Swap Obligations; (c) all capitalized interest; and (d) the interest portion of any deferred payment obligation; and

(2) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person, for any period, the aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom:

(1) after-tax gains or losses from Asset Sales (without regard to the $5.0 million limitation set forth in the definition thereof) or abandonments or reserves relating thereto;

(2) after-tax items classified as extraordinary or nonrecurring gains or losses;

(3) the net income of any Person acquired in a “pooling of interests” transaction accrued prior to the date it becomes a Restricted Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Restricted Subsidiary of the referent Person;

(4) the net income (but not loss) of any Restricted Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted by a contract, operation of law or otherwise; provided, however, that

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such income shall be included in determining Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary to the Company or another Restricted Subsidiary as a dividend in compliance with such restriction;

(5) the net income of any Person, other than a Restricted Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Restricted Subsidiary of the referent Person by such Person;

(6) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date;

(7) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

(8) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person’s assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets;

(9) all gains and losses realized on or because of the purchase or other acquisition by such Person or any of its Restricted Subsidiaries of any securities of such Person or any of its Restricted Subsidiaries;

(10) interest expense attributable to dividends on Qualified Capital Stock pursuant to Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” or comparable GAAP concept;

(11) non-cash charges resulting from the impairment of intangible assets; and

(12) the cumulative effect of a change in accounting principles.

“Consolidated Net Worth” of any Person means the consolidated stockholders’ equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person.

“Consolidated Non-cash Charges” means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries to the extent they reduce Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charge that requires an accrual of or a reserve for cash charges for any future period).

“Consolidated PP&E” means, as at any date of determination, the assets (net of depreciation) of the Company and its Restricted Subsidiaries on a consolidated basis which may properly be classified as property, plant and equipment in conformity with GAAP, excluding any assets subject to a Lien that ranks pari passu with or ahead of the Liens created by the Collateral Agreements (other than Permitted Liens described in clause (1), (2), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement)), to the extent of the lesser of the Fair Market Value of such asset and the amount secured by such Lien.

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“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 12.02 or such other address as to which the Trustee may give notice to the Company.

“Credit Agreement” means the Credit Agreement dated as of May 19, 2005, among the Company, the lenders party thereto (in such capacity, together with any successors thereto, the “Lenders”), BNP Paribas (Canada), as administrative agent (in such capacity, together with any successor thereto, the “Administrative Agent”) and GE Canada Finance Holding Company, as the collateral agent (in such capacity, together with any successor thereto, the “Collateral Agent”), together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any deferrals, renewals, amendments and restatements thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, refunding, replacing or otherwise substituting, restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under clause (2) of the definition of the term “Permitted Indebtedness”) or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement or agreements and whether by the same or any other agent, lender, creditor or group of lenders or creditors.

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in currency values or exchange rates.

“Debenture” means an agreement which charges or purports to charge a Lien in personal and real property of the Company or any Guarantor (including the Premises and the Leased Premises of the Company or any Guarantor), as well as any other Collateral secured by and described therein, to secure the Obligations under this Indenture, the Notes, the Guarantees or any other Collateral Agreement.

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

“Deposit Instrument” means a deposit instrument granted by the Company or a Guarantor, as applicable, to the Trustee or Sub-Collateral Agent in conjunction with the granting of a Debenture under which the grantor deposits the Debenture with the Trustee or Sub-Collateral Agent to secure the obligations under this Indenture, the Notes or a Guarantee or any other Collateral Agreement, as the case may be.

“Depositary” means, with respect to the Notes issuable in whole or in part in global form, the Person specified in Section 2.06(g) as the Depositary with respect to the Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions hereof, and, thereafter, “Depositary” shall mean or include such successor.

“Designation” has the meaning given to this term in Section 4.21.

“Designation Amount” has the meaning given to this term in Section 4.21.

“Disqualified Capital Stock” means that portion of any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event that would constitute (i) a Change of Control or (ii) an Asset Sale if the terms of such Capital Stock provide that the Company may not purchase or redeem such Capital Stock except in compliance with Section 4.07), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole

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option of the holder thereof (except, in each case, upon the occurrence of (i) a Change of Control or (ii) an Asset Sale if the terms of such Capital Stock provide that the Company may not purchase or redeem such Capital Stock except in compliance with Section 4.07) on or prior to the first anniversary of the final maturity date of the Notes for cash or is convertible into or exchangeable for debt securities of the Company or its Subsidiaries at any time prior to such anniversary.

“dollar” and the symbol “$” mean such coin or currency of Canada which, as at the time of payment, shall be immediately available legal tender for the payment of public and private debts.

“Equity Investors” means, collectively, The Sterling Group, L.P., Genstar Capital, L.P., investment funds managed by Perry Corp. and Stephens Group, Inc.

“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear System.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“Exchange Offer” means an exchange offer that may be made by the Company pursuant to the Registration Rights Agreement to exchange Series A Notes for Series B Notes.

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Determination of fair market value shall be by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company.

“First Lien Collateral Agent” has the meaning set forth in the Intercreditor Agreement.

“GAAP” means generally accepted accounting principles set forth in Canada, consistently applied, as in effect from time to time.

“Group” as defined in definition of “Change of Control.”

“guarantee” means a direct or indirect guarantee (other than by endorsement of negotiable instruments in the ordinary course of business) by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.

“Guarantor” means: (1) each of the Company’s Subsidiaries existing on the Issue Date and named as such in this Indenture; and (2) each of the Company’s Restricted Subsidiaries that in the future executes a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Guarantor; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of this Indenture.

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“Holder” means a Person in whose name a Note is registered.

“Holdings” means NACG Holdings Inc., the owner of 100% of the outstanding share capital of NACG Preferred.

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary of the Company that has (1) assets with a Fair Market Value or book value (whichever is greater) less than $100,000 and (2) revenues not exceeding $10,000 during the 365-day period ending on such date.

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

(1) all Obligations of such Person for borrowed money;

(2) all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all Capitalized Lease Obligations of such Person;

(4) all Obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted);

(5) all Obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction, whether or not then due;

(6) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below;

(7) all Obligations of any other Person of the type referred to in clauses (1) through (6) that are secured by any Lien on any property or asset of such Person, the amount of any such Obligation being deemed to be the lesser of the Fair Market Value of such property or asset and the amount of the Obligation so secured;

(8) net obligations under Currency Agreements and Interest Swap Obligations of such Person; and

(9) Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such price shall be the Fair Market Value thereof.

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The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

“Indenture” means this Indenture, as amended or supplemented from time to time.

“Independent Financial Advisor” means a nationally-recognized accounting, appraisal or investment banking firm:

(1) that does not, and whose directors, officers, employees or Affiliates do not, have a material direct or indirect financial interest in the Company; and

(2) that, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged.

“Initial Purchaser” means Jefferies & Company, Inc.

“Intercreditor Agreement” means the intercreditor agreement, dated as of the Issue Date, between the Collateral Agent, the Trustee and the Sub-Collateral Agent and consented and agreed to by, inter alia, the Company and the Guarantors.

“Interest Swap Obligations” means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall also include, without limitation, interest rate swaps, caps, floors, collars and similar agreements.

“Investment” means, with respect to any Person, any direct or indirect investment in any other Person in the form of loans, advances or other extensions of credit (including, without limitation, a guarantee) or capital contributions to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for consideration by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. “Investment” shall exclude extensions of trade credit by the Company and its Restricted Subsidiaries in the ordinary course of business. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, greater than 50% of the outstanding Common Stock of such Restricted Subsidiary, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Common Stock of such Restricted Subsidiary not sold or disposed of. Except as otherwise provided for herein, the amount of an Investment shall be its Fair Market Value at the time such Investment is made and without giving effect to subsequent changes in value.

“Issue Date” means the date of original issuance of the Notes.

“Lenders” has the meaning set forth in the definition of the term “Credit Agreement.”

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“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).

“Mortgages” means the mortgages, deeds of trust, deeds to secure Obligations under this Indenture, the Notes, any Guarantee or any Collateral Agreement or other similar documents securing Liens on the Premises and/or the Leased Premises, as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure such Obligations or other similar documents.

“NACG Preferred” means NACG Preferred Corp., the owner of 100% of the outstanding share capital of the Company.

“Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of:

(1) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions and other direct costs of sale);

(2) taxes paid or estimated by the Company in good faith to be payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements;

(3) repayment of Indebtedness that is secured by a Lien on the property or assets that are the subject of such Asset Sale and is required to be repaid in connection with such Asset Sale; and

(4) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.

Further, with respect to an Asset Sale by a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, Net Cash Proceeds shall be reduced pro rata for the portion of the equity of such Subsidiary that is not owned by the Company.

“Non-Recourse Debt” means Indebtedness of a Subsidiary:

(1) as to which neither the Company nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise or (c) constitutes the lender;

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any Indebtedness (other than the Notes) of the Company or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

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(3) as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Company or any Restricted Subsidiary.

“Note Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

“Notes” means the Notes that are issued under this Indenture, as amended or supplemented from time to time, including Additional Notes, if any, and any Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement, if any. The Series A Notes and the Series B Notes shall constitute one series of Notes for all purposes under this Indenture.

“Obligations” means all obligations for principal, premium, interest (including Additional Interest and interest accruing after the commencement of any bankruptcy, insolvency, or similar proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness (including Additional Amounts).

“Offering” means the offering of the Notes under the Offering Circular of the Company dated May 13, 2005.

“Officer” means (a) with respect to any Person that is a corporation, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Controller or principal accounting officer, the Treasurer, the Secretary or any Vice-President of such Person and (b) with respect to any other Person, the individuals selected by such Person to perform functions similar to those of the officers listed in clause (a).

“Officers’ Certificate” means a certificate that (a) is signed by two Officers of the Company, at least one of whom shall be the principal financial officer of the Company, and delivered to the Trustee, and (b) meets the requirements of Sections 12.04 and 12.05.

“Opinion of Counsel” means a written opinion of counsel (who may be internal counsel of the Company) who shall be reasonably acceptable to the Trustee that meets the requirements of Sections 12.04 and 12.05.

“Permitted Holders” means The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc. and Stephens Group, Inc. and their respective Affiliates (in each case, other than portfolio companies thereof).

“Permitted Investments” means:

(1) Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or will become immediately after such Investment a Restricted Subsidiary of the Company or that will merge or consolidate into the Company or a Restricted Subsidiary of the Company;

(2) Investments in the Company by any Restricted Subsidiary of the Company; provided that any Indebtedness evidencing such Investment and held by a Restricted Subsidiary that is not a Guarantor is unsecured and subordinated, pursuant to a written agreement, to the Company’s obligations under the Notes and this Indenture;

(3) Investments in cash and Cash Equivalents;

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(4) Currency Agreements and Interest Swap Obligations entered into by the Company or its Restricted Subsidiaries and otherwise in compliance with this Indenture;

(5) additional Investments not to exceed $15.0 million at any one time outstanding;

(6) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in good faith settlement of delinquent obligations of such trade creditors or customers;

(7) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

(8) Investments in prepaid expenses, negotiable instruments held for collection or deposit and lease, utility and workers compensation, performance and similar deposits entered into in the ordinary course of business;

(9) Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with Section 4.10;

(10) Investments represented by guarantees that are otherwise permitted under this Indenture;

(11) Investments the payment for which is Qualified Capital Stock of the Company or Holdings;

(12) any assets acquired as a result of a foreclosure by the Company or any such Restricted Subsidiary with respect to any secured Permitted Investment or other transfer of title with respect to any secured Permitted Investment in default;

(13) Investments existing on of the Issue Date and any amendment, extension, substitution, renewal or modification thereof to the extent that any such amendment, extension, substitution, renewal or modification does not require the Company or any Restricted Subsidiary to make any additional cash or non-cash payments or provide additional services in connection therewith;

(14) Investments to support bonding arrangements in the ordinary course of business;

(15) Investments in Permitted Joint Ventures in an amount not to exceed $10.0 million at any time outstanding; and

(16) loans or advances to employees or customers in the ordinary course of business and guarantees or similar obligations with respect to the foregoing in an amount not to exceed $1.0 million in each fiscal year.

“Permitted Joint Venture” means an entity characterized as a joint venture in which the Company or a Restricted Subsidiary (a) owns at least 30% of the ownership interest and (b) has the right to receive a percentage of the profits or distributions at least equal to the percentage of its ownership interest.

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“Permitted Liens” means the following types of Liens:

(1) Liens existing as of the Issue Date and securing Indebtedness permitted to be outstanding under clause (3) of the definition of the term “Permitted Indebtedness” to the extent and in the manner such Liens are in effect on the Issue Date;

(2) Liens securing Indebtedness under the Credit Agreement to the extent such Indebtedness is permitted under clause (2) of the definition of the term “Permitted Indebtedness” and interest, fees and other Obligations thereunder not constituting Indebtedness;

(3) Liens securing this Indenture, the Notes and the Guarantees;

(4) Liens of the Company or a Wholly Owned Restricted Subsidiary of the Company on assets of any Restricted Subsidiary of the Company;

(5) Liens securing Refinancing Indebtedness that is incurred in accordance with the provisions of this Indenture to Refinance any Indebtedness that has been secured by a Lien permitted under this Indenture; provided, however, that such Liens: (a) are no less favorable to the Holders in any material respect and are not more favorable to the lienholders in any material respect with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (b) do not extend to or cover any property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced;

(6) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;

(7) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;

(8) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

(9) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

(10) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

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(11) any interest or title of a lessor under any Capitalized Lease Obligation incurred in accordance with Section 4.09; provided that (a) such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation and (b) the sum of (x) the aggregate amount of such Capitalized Lease Obligations and (y) the aggregate amount of Purchase Money Indebtedness secured pursuant to a Permitted Lien described in clause (12) below shall not exceed $30.0 million;

(12) Liens securing Purchase Money Indebtedness incurred in accordance with Section 4.09; provided that (a) such Purchase Money Indebtedness shall not exceed the purchase price or other cost of such property or equipment and shall not be secured by any property or equipment of the Company or any Restricted Subsidiary of the Company other than the property and equipment so acquired or constructed, (b) the Lien securing such Purchase Money Indebtedness shall be created within 90 days of such acquisition or construction and (c) the sum of (x) the aggregate amount of such Purchase Money Indebtedness and (y) the aggregate amount of Capitalized Lien Obligations secured pursuant to a Permitted Lien described in clause (11) above shall not exceed $30.0 million;

(13) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(14) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(15) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set off;

(16) Liens securing Interest Swap Obligations that relate to Indebtedness that is otherwise permitted hereunder (including Indebtedness arising under any Swap Agreement described in clause (1) of the definition thereof);

(17) Liens securing Indebtedness under Currency Agreements permitted hereunder (including Indebtedness arising under any Swap Agreement described in clause (2) of the definition thereof);

(18) Liens securing Acquired Indebtedness incurred in accordance with Section 4.09; provided that:

(a) such Liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company; and

(b) such Liens do not extend to or cover any property or assets of the Company or of any of its Restricted Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company and are no more

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favorable to the lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company;

(19) leases, subleases, licenses and sublicenses granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries;

(20) banker’s liens, rights of setoff and similar statutory or common law liens with respect to cash and Cash Equivalents on deposit in one or more bank accounts in the ordinary course of business;

(21) Liens arising from filing financing statements under the Personal Property Security Act (Alberta) or other applicable personal property security laws regarding operating leases; and

(22) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods.

“Person” means an individual, partnership (general or limited), corporation, limited liability company, unincorporated organization, association, joint stock company, trust or joint venture, or a governmental agency or political subdivision thereof.

“Pledge Agreement” means an agreement which charges or purports to charge a Lien in the Capital Stock of any Person held by the Company or any Guarantor, as well as any other Collateral secured by and described therein, to secure the Obligations under this Indenture, the Notes, the Guarantees or any other Collateral Agreement.

“PORTAL Market” means the Private Offerings, Resales and Trading through Automatic Linkages Market, commonly referred to as the Portal Market, operated by the National Association of Securities Dealers, Inc. or any successor thereto.

“Preferred Stock” of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

“Public Equity Offering” means an underwritten primary public offering of Qualified Capital Stock of Holdings or the Company pursuant to an effective registration statement filed with the Commission in accordance with the Securities Act (excluding registration statements filed on Form S-8) or a prospectus filed with the applicable Canadian Securities Regulators in accordance with applicable Canadian Securities Laws; provided that, in the event of a Public Equity Offering by Holdings, Holdings contributes to the capital of the Company the portion of the net cash proceeds of such Public Equity Offering necessary to pay the aggregate Redemption Price (plus accrued interest to the applicable Redemption Date) of the Notes to be redeemed pursuant to Section 3.08.

“Purchase Date” means, with respect to any Note to be repurchased pursuant to Sections 4.10 and 3.11 or Sections 4.15 and 3.10, the date fixed for such repurchase by or pursuant to this Indenture.

“Purchase Money Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries incurred for the purpose of financing all or any part of the purchase price, or the cost of installation, construction or improvement, of property, equipment or a business; provided, that the aggregate principal amount of such Indebtedness at the time of incurrence does not exceed the lesser of the Fair Market Value of such property or such purchase price or cost.

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“Purchase Price” means the amount payable for the repurchase of any Note on a Purchase Date, exclusive of accrued and unpaid interest and Additional Interest (if any) thereon to the Purchase Date, unless otherwise specifically provided.

“QIB” means a qualified institutional buyer as defined in Rule 144A under the Securities Act.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

“Redemption Date” means, with respect to any Note or portion thereof to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price” means the amount payable for the redemption of any Note or portion thereof on a Redemption Date, exclusive of accrued and unpaid interest and Additional Interest (if any) thereon to the Redemption Date, unless otherwise specifically provided.

“Refinance” means, in respect of any security or Indebtedness, to refinance, restructure, defer, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means any Indebtedness of the Company or a Restricted Subsidiary issued in exchange for, or the proceeds from the issuance and sale or disbursement of which are used substantially concurrently to Refinance in whole or in part, any Indebtedness of the Company or any Restricted Subsidiary, in each case that does not:

(1) result in an increase in the aggregate principal amount (or accreted value, if applicable) of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable fees and expenses incurred by the Company or any Restricted Subsidiary in connection with such Refinancing); or

(2) create Indebtedness with: (a) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced; or (b) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness solely of the Company (and is not otherwise guaranteed by a Restricted Subsidiary of the Company), then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the Notes or any Guarantee, then such Refinancing Indebtedness shall be subordinate to the Notes or such Guarantee, as the case may be, at least to the same extent and in the same manner as the Indebtedness being Refinanced.

“Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue Date among the Company, the Guarantors and the Initial Purchaser, as the same may be amended or modified from time to time in accordance with the terms thereof.

“Regulation S” means Regulation S as promulgated under the Securities Act.

“Responsible Officer” means, when used with respect to the Trustee, any officer of the Trustee assigned by the Trustee to administer this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

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“Restricted Payment” means any of the following:

(1) the declaration or payment of any dividend or making any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company and dividends and distributions payable to the Company or another Restricted Subsidiary that is a Wholly Owned Restricted Subsidiary) on or in respect of shares of the Company’s Capital Stock to the direct or indirect holders of such Capital Stock;

(2) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or its Restricted Subsidiaries (other than any such Capital Stock held by the Company or any Restricted Subsidiary);

(3) the making of any principal payment on, or the purchase, defeasance, redemption, prepayment, decreasing or other acquisition or retirement for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness that by its terms is subordinated to the Notes or a Guarantee (other than such Indebtedness that is held by the Company or any Restricted Subsidiary); or

(4) making of any Investment (other than Permitted Investments); or

(5) the declaration or payment of any cash dividend or making any cash distribution on or in respect to the Sponsor Preferred Stock to the direct or indirect holders of such Sponsor Preferred Stock and the making of any cash payment on, or the purchase, redemption, prepayment, decreasing or other acquisition or retirement for value in cash of the Sponsor Preferred Stock.

“Restricted Subsidiary” of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Sale and Leaseback Transaction” means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of any property, whether owned by the Company or any Restricted Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such Property.

“Securities Act” means the Securities Act of 1933, as amended.

“Senior Lien Agent” means the First Lien Collateral Agent under and as defined in the Intercreditor Agreement.

“Senior Lien Agreements” means, collectively, the Credit Agreement and the Swap Agreements.

“Senior Lien Obligations” means the Obligations arising under or evidenced by the Senior Lien Agreements.

“Senior Lienholders” means, collectively, the Senior Lien Agent, the Collateral Agent, the Administrative Agent, the Lenders and the counterparties to the Swap Agreements.

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“Series A Notes” means the Company’s 9% Senior Secured Notes due 2010 issued under this Indenture and not registered under the Securities Act, whether issued on the Issue Date or thereafter, including any Additional Notes, if applicable.

“Series B Notes” means notes issued by the Company hereunder containing terms substantially identical to the Series A Notes (except that (i) the legend or legends relating to transferability and other related matters set forth on the Series A Notes, including the text referred to in footnote 2 of Exhibit A, shall be removed or appropriately altered, and (ii) as otherwise set forth herein), to be offered to Holders of Series A Notes in exchange for such Series A Notes pursuant to the Exchange Offer or any exchange offer specified in any registration rights agreement relating to Additional Notes or in a registered public offering of Additional Notes. Each Series B Note issued in exchange for a Series A Note in the Exchange Offer or any such other exchange offer represents the same indebtedness as the Series A Note for which it was exchanged, and the Exchange Offer or any such other exchange offer do not result in a repayment or extinguishment of the Indebtedness initially represented by such Series A Notes. No Series B Note will be entitled to Additional Interest.

“Significant Subsidiary” means any Restricted Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

“Sponsor Preferred Stock” means the aggregate of 7,500 shares of senior preferred stock issued on May 19, 2005 by the Company to certain shareholders of NACG Holdings Inc., plus any shares of the Sponsor Preferred Stock paid as a dividend, on Sponsor Preferred Stock.

“Subsidiary”, with respect to any Person, means:

(1) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or

(2) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person.

“Swap Agreements” means (1) each agreement relating to Interest Swap Obligations entered into by the Company or any of its Restricted Subsidiaries pursuant to clause (4) of the definition of the term “Permitted Indebtedness” and (2) each Currency Agreement entered into by the Company or any of its Restricted Subsidiaries pursuant to clause (5) of the definition of the term “Permitted Indebtedness”, in each case, existing on the issue date or with a counterparty that is (or at the time such Swap Agreement was entered into, was) a Lender or an Affiliate of a Lender.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA; provided that in the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“Transfer Restricted Security” means a Note that is a restricted security as defined in Rule 144(a)(3) under the Securities Act.

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“Trustee” means the party named as such in the preamble of this instrument until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter means the successor serving hereunder. References to the Trustee as it relates to the Collateral and the Collateral Agreements include the Trustee and/or one or more Sub-Collateral Agents, as applicable.

“U.S.” means the United States of America.

“U.S. dollar” and the symbol “US$” mean such coin or currency of the United States of America which, as at the time of payment, shall be immediately available legal tender for the payment of public and private debts.

“U.S. Government Securities” shall mean securities which are (a) denominated and payable only in U.S. dollars and (b) (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Securities or a specific payment of interest on or principal of any such U.S. Government Securities held by such custodian for the account of the holder of a depository receipt.

“U.S. Person” means any U.S. Person as defined in Regulation S.

“Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in accordance with Section 4.21 and (2) any Subsidiary of an Unrestricted Subsidiary.

“Voting Stock” means, with respect to any Person, securities of any class or classes of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors (or equivalent governing body) of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

“Wholly Owned Restricted Subsidiary” of any Person means any Wholly Owned Subsidiary of such Person which at the time of determination is a Restricted Subsidiary of such Person.

“Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than directors’ qualifying shares or an immaterial amount of shares owned by other Persons) are owned by such Person or any Wholly Owned Subsidiary of such Person.

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Section 1.02. Other Definitions.

Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in, and made a part of, this Indenture. The following TIA terms used in this Indenture have the following meanings:

Term	Defined in Section
“Acceleration Notice”	6.02
“Act”	1.05(a)
“Additional Amounts”	12.09(a)
“Adjusted Net Assets”	10.05
“Affiliate Transaction”	4.11(a)
“Agent Members”	2.06(b)
“Certificated Notes”	2.01
“Change of Control Offer”	4.15(a)
“Change of Control Offer Period”	3.10(b)
“Covenant Defeasance”	8.03
“Event of Default”	6.01
“Excluded Holder”	12.09(a)
“Foreign Person”	2.06(c)
“Funding Guarantor”	10.05
“Global Notes”	2.01
“Guarantee”	10.01
“incur”	4.09(a)
“Institutional Accredited Investors”	2.01
“Legal Defeasance”	8.02
“Net Proceeds Offer”	4.10(b)
“Net Proceeds Offer Amount”	4.10(b)
“Net Proceeds Offer Payment Date”	4.10(b)
“Net Proceeds Offer Trigger Date”	4.10(b)
“Offshore Certificated Notes”	2.01
“Original Currency”	12.08(a)
“Other Currency”	12.08(a)
“Paying Agent”	2.03
“Permanent Regulation S Global Note”	2.01
“Permitted Indebtedness”	4.09(b)
“Private Placement Legend”	2.06(h)
“Redesignation”	4.21(d)
“Reference Date”	4.07(a)(iii)(v)
“Registrar”	2.03
“Regulation S Global Note”	2.01
“Rule 144A Global Note”	2.01
“Special Redemption”	3.08
“Sub-Collateral Agent”	7.13(a)
“Surviving Entity”	5.01(a)(1)(b)
“Taxes”	12.09(a)
“Temporary Regulation S Global Note”	2.01
“U.S. Certificated Notes”	2.01

Section 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in, and made a part of, this Indenture. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

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“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Company or any other obligor on the Notes.

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule under the TIA have the meanings so assigned to them.

Section 1.04. Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) words in the singular include the plural, and words in the plural include the singular;

(5) words used herein implying any gender shall apply to both genders;

(6) “herein”, “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(7) when the words “includes” or “including” are used herein, they shall be deemed to be followed by the words “without limitation”;

(8) “will” shall be interpreted to express a command;

(9) provisions apply to successive events and transactions;

(10) all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated; and

(11) references to sections of or rules under the Securities Act, the Exchange Act and the TIA shall be deemed to include substitute, replacement and successor sections or rules adopted by the Commission from time to time unless otherwise specified.

Section 1.05. Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such

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instrument or instruments are delivered (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointment any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the TIA) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(b) Without limiting the generality of the foregoing, a Holder, including a Depositary that is a Holder of a Global Note, may make, give or take, by a proxy or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder of a Global Note may provide its proxy or proxies to the beneficial owners of interests in any such Global Note.

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

(d) The ownership, principal amount and serial numbers of Notes held by any Person, and the date of commencement of such Person’s holding the same, shall be proved by the Trustee.

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

(f) The Company may set any day as the record date for the purpose of determining Holders of outstanding Notes entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Notes (other than any such action provided or permitted to be taken under Section 6.01, 6.02 or 6.05), but the Company shall have no obligation to do so; provided, that if the Company does set such a record date, it shall provide the Trustee with at least five days advance notice of such record date. With regard to any record date set pursuant to this clause (f), Holders of outstanding Notes of the applicable series on such record date (or their duly appointed agents), and only such Persons, shall be entitled to give or take the relevant action, whether or not such Holders remain Holders after such record date. The Company shall notify the Trustee in writing of any such record date not later than the date of the first solicitation of any Holder to give or take any action.

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ARTICLE II

THE NOTES

Section 2.01. Form and Dating.

The Series A Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage in addition to those set forth in Exhibit A and Exhibit B. The Series B Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit B. Each Series B Note issued in exchange for a Series A Note in the Exchange Offer or any such other exchange offer represents the same indebtedness as the Series A Note for which it was exchanged, and the Exchange Offer or any such other exchange offer do not result in a repayment or extinguishment of the Indebtedness initially represented by such Series A Notes. No Series B Note will be entitled to Additional Interest. The notation on each Note relating to the Guarantees, if any, shall be substantially in the form set forth in Exhibit C. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of US$1,000 and integral multiples thereof. Not in limitation but in furtherance of the foregoing, the Notes shall only be denominated in U.S. dollars.

The terms and provisions contained in the Notes and Guarantees shall constitute, and are hereby expressly made, a part of this Indenture, and the Company, the Guarantors, if any, and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of a single permanent global Note in registered form, substantially in the form set forth in Exhibit A (the “Rule 144A Global Note”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.

Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of a single temporary global Note in registered form substantially in the form set forth in Exhibit A (the “Temporary Regulation S Global Note”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided. At any time following 40 days after the later of the consummation of the offering of the Notes and the Issue Date (or, in the case of Additional Notes, 40 days after the later of the consummation of the offering of such Additional Notes or the date on which such Additional Notes were originally issued), upon receipt by the Trustee and the Company of a duly executed certificate substantially in the form of Exhibit D(1), a single permanent Global Note in registered form substantially in the form set forth in Exhibit A (the “Permanent Regulation S Global Note,” and together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) duly executed by the Company and authenticated by the Trustee as hereinafter provided shall be deposited with the Trustee, as custodian for the Depositary. The aggregate principal amount of the Regulation S Global Note may from time to time be increased or decreased by adjustments made in the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.

Subject to Section 2.06(g), Notes offered and sold to institutional accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) (“Institutional Accredited Investors”), if any, shall be issued in the form of permanent U.S. Certificated Notes in registered form in substantially the form set forth in Exhibit A (the “U.S. Certificated Notes”). Notes issued pursuant to Section 2.06 in

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exchange for interests in the Rule 144A Global Note or the Regulation S Global Note shall be in the form of permanent Certificated Notes in registered form substantially in the form set forth in Exhibit A (the “Offshore Certificated Notes”), in the case of those issued in exchange for the Regulation S Global Note, and U.S. Certificated Notes, in the case of those issued in exchange for the Rule 144A Global Note.

The Offshore Certificated Notes and U.S. Certificated Notes are sometimes collectively herein referred to as the “Certificated Notes.” The Rule 144A Global Note and the Regulation S Global Note are sometimes referred to herein as the “Global Notes.”

Section 2.02. Execution and Authentication.

Two Officers of the Company shall sign the Notes for the Company by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. Each Guarantor, if any, shall execute a Guarantee in the manner set forth in Section 10.07.

A Note shall not be valid until authenticated by the signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee, upon a written order of the Company signed by two Officers of the Company, together with the other documents required by Sections 12.04 and 12.05, shall authenticate (i) Series A Notes for original issue on the Issue Date in the aggregate principal amount not to exceed US$60,481,000 and (ii) subsequent to the Issue Date and subject to Section 4.09, Additional Notes. The Trustee, upon written order of the Company signed by two Officers of the Company, together with the other documents required by Sections 12.04 and 12.05, shall authenticate Series B Notes; provided that such Series B Notes shall be issuable only upon the valid surrender for cancellation of Series A Notes of a like aggregate principal amount in accordance with the Exchange Offer or an exchange offer specified in any registration rights agreement relating to Additional Notes or in connection with one or more registered public offerings of Additional Notes. Such written order of the Company shall specify the amount of Notes to be authenticated and the date on which the original issue of Notes is to be authenticated. Any Additional Notes shall be part of the same issue as the Notes being issued on the Issue Date or exchanged therefor and will vote on all matters as one class with the Notes being issued on the Issue Date or exchanged therefor, including, without limitation, waivers, amendments, redemptions, Change of Control Offers and Net Proceeds Offers.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

Section 2.03. Registrar and Paying Agent.

The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. At the option of the Company, payment of interest and Additional Interest (if any) may be made by check mailed to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal, Redemption Price and Purchase Price of, and interest and Additional Interest (if any) on, all Global Notes

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and all other Notes the Holders of which shall have provided wire transfer instructions to the Trustee or the Paying Agent at least five Business Days before the relevant payment date. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Paying Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Depositary shall, by acceptance of a Global Note, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by the Depositary (or its agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry.

The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes.

The Trustee is hereby authorized to enter into a letter of representations with the Depositary in the form provided by the Company and to act in accordance with such letter.

Section 2.04. Paying Agents to Hold Money in Trust.

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, interest and Additional Interest (if any) on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

Section 2.05. Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes, and the Company shall otherwise comply with TIA Section 312(a).

Section 2.06. Transfer and Exchange.

(a) Transfer and Exchange Generally; Book Entry Provisions. Upon surrender for registration of transfer of any Note to the Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.06, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture and bearing such restrictive legends as may be required by this Indenture.

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Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive.

All Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Registrar duly executed by the Holder thereof or his attorney duly authorized in writing. Except as otherwise provided in this Indenture, and in addition to the requirements set forth in the legend referred to in Section 2.06(h)(i) below, in connection with any transfer of Transfer Restricted Securities any request for transfer shall be accompanied by a certification to the Trustee relating to the manner of such transfer substantially in the form of Exhibit D(2).

(b) Book-Entry Provisions for the Global Notes. The Rule 144A Global Note and Regulation S Global Note initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as Note Custodian and (iii) bear legends as set forth in Section 2.06(h).

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Rule 144A Global Note or Regulation S Global Note, as the case may be, held on their behalf by the Depositary, or the Trustee as its custodian, or under the Rule 144A Global Note or Regulation S Global Note, as the case may be, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Rule 144A Global Note or Regulation S Global Note, as the case may be, for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.

Transfers of the Rule 144A Global Note and the Regulation S Global Note shall be limited to transfers of such Rule 144A Global Note or Regulation S Global Note in whole, but not in part, to the Depositary, its successors or their respective nominees. Beneficial interests in the Rule 144A Global Note and the Regulation S Global Note may be transferred in accordance with the applicable rules and procedures of the Depositary and the provisions of this Section 2.06. The registration of transfer and exchange of beneficial interests in a Global Note, which does not involve the issuance of a Certificated Note, shall be effected through the Depositary, in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor. The Trustee shall have no responsibility or liability for any act or omission of the Depositary.

At any time at the request of the beneficial holder of an interest in the Rule 144A Global Note or Permanent Regulation S Global Note to obtain a Certificated Note, such beneficial holder shall be entitled to obtain a Certificated Note upon written request to the Trustee and the Note Custodian in accordance with the standing instructions and procedures existing between the Note Custodian and Depositary for the issuance thereof. Upon receipt of any such request, the Trustee, or the Note Custodian at the direction of the Trustee, will cause, in accordance with the standing instructions and procedures existing between the Depositary and the Note Custodian, the aggregate principal amount of the Rule 144A Global Note or Permanent Regulation S Global Note, as appropriate, to be reduced by the principal amount of the Certificated Note issued upon such request to such beneficial holder and, following such reduction, the Company will execute and the Trustee will authenticate and deliver to such beneficial holder (or its nominee) a Certificated Note or Certificated Notes in the appropriate aggregate principal amount in the name of such beneficial holder (or its nominee) and bearing such restrictive legends as may be required by this Indenture.

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(c) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer of a Transfer Restricted Security to any Institutional Accredited Investor that is not a QIB (other than any Person that is not a U.S. Person as defined under Regulation S, a “Foreign Person”):

(i) the Registrar shall register the transfer of any Note, whether or not such Note bears the Private Placement Legend, if (x) the proposed transferee has certified in writing to the Registrar that the requested transfer is at least two years after the later of (A) the Issue Date of the Notes and (B) the last date on which any Notes were acquired from an Affiliate of the Company and has delivered legal opinions and such other information as the Trustee and the Company may reasonably require, or (y) the proposed transferee has delivered to the Registrar (A) a certificate substantially in the form of Exhibit E and (B) such certifications, legal opinions and other information as the Trustee and the Company may reasonably request to confirm that such transaction is in compliance with the Securities Act; and

(ii) if the proposed transferor is an Agent Member holding a beneficial interest in the Global Note, upon receipt by the Registrar of (x) the documents required by clause (i), and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Certificated Notes of like tenor and amount.

(d) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Transfer Restricted Security to a QIB (other than Foreign Persons):

(i) if the Note to be transferred consists of Certificated Notes or an interest in the Regulation S Global Note, the Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on a certificate substantially in the form of Exhibit D(2) stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who is a QIB within the meaning of Rule 144A and is aware that the sale to it is being made in reliance on Rule 144A; and

(ii) if the proposed transferee is an Agent Member, and the Note to be transferred consists of Certificated Notes or an interest in the Regulation S Global Note,

upon receipt by the Registrar of (x) the documents referred to in clause (i), and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Rule 144A Global Note in an amount equal to the principal amount of the Certificated Notes or the interest in the Regulation S Global Note, as the case may be, to be transferred, and the Trustee shall cancel the Certificated Notes or decrease the amount of the Regulation S Global Note so transferred.

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(e) Transfers of Interests in the Temporary Regulation S Global Note. The following provisions shall apply with respect to the registration of any proposed transfer of interests in the Temporary Regulation S Global Note:

(i) the Registrar shall register the transfer of an interest in the Temporary Regulation S Global Certificate if (x) the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit F and the transferee shall have delivered a certificate substantially in the form of Exhibit D(1) stating, among other things, that the proposed transferee is a Foreign Person or (y) the proposed transferee is a QIB and the proposed transferor has checked the box provided for on a certificate substantially in the form of Exhibit D(2) stating, or has otherwise advised the Company and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A; and

(ii) if the proposed transferee is an Agent Member, upon receipt by the Registrar of (x) the documents referred to in clause (i), and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Rule 144A Global Note in an amount equal to the principal amount of the Temporary Regulation S Global Note to be transferred, and the Trustee, as Note Custodian, shall decrease the amount of the Temporary Regulation S Global Note.

(f) Transfers to Foreign Persons. The following provisions shall apply with respect to any transfer of a Transfer Restricted Security to a Foreign Person:

(i) the Registrar shall register any proposed transfer of a Note to a Foreign Person upon receipt of a certificate substantially in the form of Exhibit F from the proposed transferor and such certifications, legal opinions and other information as the Trustee or the Company may reasonably request; and

(ii) (a) if the proposed transferor is an Agent Member holding a beneficial interest in the Rule 144A Global Note or the Note to be transferred consists of Certificated Notes, upon receipt by the Registrar of (x) the documents required by clause (i), and (y) instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Rule 144A Global Note in an amount equal to the principal amount of the beneficial interest in the Rule 144A Global Note or cancel the Certificated Notes, as the case may be, to be transferred, and (b) if the proposed transferee is an Agent Member, upon receipt by the Registrar of instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Regulation S Global Note in an amount equal to the principal amount of the Certificated Notes to be transferred, and the Trustee shall decrease the amount of the Rule 144A Global Note.

Notwithstanding the foregoing, the Notes or the Exchange Notes may not be resold in Canada without compliance with applicable Canadian securities laws.

(g) The Depositary. The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Notes. Initially, the Rule 144A Global Note and the Regulation S Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Note Custodian for Cede & Co.

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Certificated Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in the Rule 144A Global Note or the Permanent Regulation S Global Note, as the case may be, if at any time:

(i) the Depositary for the Notes notifies the Company that the Depositary is unwilling or unable to continue as Depositary for the Rule 144A Global Note or the Permanent Regulation S Global Note, as the case may be, and a successor Depositary is not appointed by the Company within 90 days after delivery of such notice; or

(ii) the Company, at its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Certificated Notes under this Indenture,

and the Company shall execute, and the Trustee shall, upon receipt of an authentication order in accordance with Section 2.02, authenticate and deliver Certificated Notes in an aggregate principal amount equal to the principal amount of the Rule 144A Global Note or the Permanent Regulation S Global Note, as the case may be, in exchange for such Global Notes. Notes in Certificated form issued in exchange for a Global Note pursuant to this Section 2.06 shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such Certificated Notes in Certificated form to the persons in whose names such Notes in Certificated form are so registered. Notwithstanding any other provisions herein to the contrary, beneficial interests in Global Notes may not be exchanged for Certificated Notes, and no Certificated Notes will be issued, unless and until Certificated Notes have been delivered in exchange for all beneficial interests in the Global Notes as provided in this clause (g).

(h) Legends.

(i) Except as permitted by the following clauses (ii) and (iii), each Note certificate evidencing Global Notes and Certificated Notes (and all Notes issued in exchange therefor or substitution thereof) shall (x) be subject to the restrictions on transfer set forth in this Section 2.06 (including those set forth in the legend below) unless such restrictions on transfer shall be waived by written consent of the Company, and the holder of each Transfer Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer and (y) bear the legend set forth below (the “Private Placement Legend”):

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144(K) (OR ANY SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS NOTE)

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AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION, INCLUDING ANY STATE OF THE UNITED STATES, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR TRANSFER AGENT’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”

The following legend is prescribed by applicable Canadian securities legislation and applies to trades in this Note involving persons in Canada:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS NOTE MUST NOT TRADE THIS NOTE BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (1) MAY 19, 2005 AND (2) THE DATE THE COMPANY BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.”

(ii) Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Note) pursuant to Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act:

(a) in the case of any Transfer Restricted Security that is a Certificated Note, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Certificated Note that does not bear the legend set forth in (i) above (other than the legend relating to compliance with Canadian securities laws) and rescind any restriction on the transfer of such Transfer Restricted Security; and

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(b) in the case of any Transfer Restricted Security represented by a Global Note, such Transfer Restricted Security shall not be required to bear the legend set forth in (i) above (other than the legend relating to compliance with Canadian securities laws), but shall continue to be subject to the provisions of Section 2.06(b); provided, however, that with respect to any request for an exchange of a Transfer Restricted Security that is represented by a Global Note for a Certificated Note that does not bear the legend set forth in (i) above (other than the legend relating to compliance with Canadian securities laws), which request is made in reliance upon Rule 144, the Holder thereof shall certify in writing to the Registrar that such request is being made pursuant to Rule 144 (such certifications to be substantially in the form of Exhibit D(2));

in each case, upon the delivery by the transferor of such opinions and other information as the Trustee or the Company shall reasonably request.

(iii) Notwithstanding the foregoing, upon consummation of the Exchange Offer, the Company shall issue and, upon receipt of an authentication order in accordance with Section 2.02, the Trustee shall authenticate Series B Notes in exchange for Series A Notes accepted for exchange in the Exchange Offer, which Series B Notes shall not bear the legend set forth in (i) above (other than the legend relating to compliance with Canadian securities laws), and the Registrar shall rescind any restriction on the transfer of such Series A Notes, in each case unless the Company has notified the Registrar in writing that the Holder of such Series A Notes is either (A) a broker-dealer, (B) a Person participating in the distribution of the Series A Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the Company.

(iv) Each Global Note, whether or not a Transfer Restricted Security, shall also bear the following legend on the face thereof:

“THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED

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REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(v) Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Note Custodian, the Depositary or by the National Association of Securities Dealers, Inc. in order for the Notes to be tradable on the PORTAL Market or tradable on Euroclear or Clearstream or as may be required for the Notes to be tradable on any other market developed for trading of securities pursuant to Rule 144A or Regulation S under the Securities Act or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.

(i) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in Global Notes have been exchanged for Certificated Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Certificated Notes, redeemed, repurchased or cancelled, the principal amount of Notes represented by such Global Notes shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or the Note Custodian, at the direction of the Trustee, to reflect such reduction. In the event of any transfer of any beneficial interest between the Rule 144A Global Note and the Regulation S Global Note in accordance with the standing procedures and instructions between the Depositary and the Note Custodian and the transfer restrictions set forth herein, the aggregate principal amount of each of the Rule 144A Global Note and the Regulation S Global Note shall be appropriately increased or decreased, as the case may be, and an endorsement shall be made on each of the Rule 144A Global Note and the Regulation S Global Note by the Trustee or the Note Custodian, at the direction of the Trustee, to reflect such reduction or increase.

(j) General Provisions Relating to Transfers and Exchanges.

(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Certificated Notes and Global Notes at the Registrar’s request.

(ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Section 2.06).

(iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Certificated Notes and Global Notes issued upon any registration of transfer or exchange of Certificated Notes or Global Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Certificated Notes or Global Notes surrendered upon such registration of transfer or exchange.

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(v) The Company shall not be required:

(a) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 and ending at the close of business on the day of selection; or

(b) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

(c) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

(vi) Prior to due presentment of the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of all payments with respect to such Notes, and neither the Trustee, any Agent nor the Company shall be affected by notice to the contrary.

(vii) The Trustee shall authenticate Certificated Notes and Global Notes in accordance with the provisions of Section 2.02.

Section 2.07. Replacement Notes.

If any mutilated Note is surrendered to the Trustee or either the Company or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an authentication order in accordance with Section 2.02, shall authenticate a replacement Note if the Trustee’s requirements for replacement of Notes are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Trustee and the Company may charge the Holder for their expenses in replacing a Note.

Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee or the Note Custodian in accordance with the provisions hereof and those described in this Section as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07, it shall cease to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser for value.

If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date, Purchase Date or maturity date, money in U.S. dollars sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

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Section 2.09. Treasury Notes; When Notes Are Disregarded.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by any Affiliate thereof shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor. The Company shall notify the Trustee, in writing (which notice shall constitute actual notice for purposes of the foregoing sentence), when it or any of its Affiliates repurchases or otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise acquired.

Section 2.10. Temporary Notes.

Until definitive Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an authentication order in accordance with Section 2.02, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes, but may have such variations as the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.

Section 2.11. Cancellation.

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy all canceled Notes in accordance with the Trustee’s usual procedures. The Trustee shall maintain a record of the destruction of all canceled Notes. Certification of the destruction of all canceled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that have been paid or that have been delivered to the Trustee for cancellation, except as expressly provided in this Indenture.

Section 2.12. Defaulted Interest.

If the Company defaults in a payment of interest, including Additional Interest, if any, on the Notes, the Company shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the

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amount of such interest to be paid. Notwithstanding the foregoing, any interest that is paid prior to the expiration of the 30-day period set forth in Section 6.01(a) may be paid to Holders of Notes as of the record date for the interest payment date for which interest has not been paid.

Section 2.13. Persons Deemed Owners.

Prior to due presentment of a Note for registration of transfer and subject to Section 2.12, the Company, the Trustee, any Paying Agent, any co-registrar and any Registrar may deem and treat the person in whose name any Note shall be registered upon the register of Notes kept by the Registrar as the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of the ownership or other writing thereon made by anyone other than the Company, any co-registrar or any Registrar) for the purpose of receiving all payments with respect to such Note and for all other purposes, and none of the Company, the Trustee, any Paying Agent, any co-registrar or any Registrar shall be affected by any notice to the contrary.

Section 2.14. CUSIP Numbers.

The Company in issuing the Notes may use a “CUSIP” number, and if so, the Trustee shall use the CUSIP number in notices of redemption, repurchase or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall notify the Trustee of any change to the CUSIP numbers.

Section 2.15. Designation.

The Indebtedness evidenced by the Notes is hereby irrevocably designated herein as “senior indebtedness” or such other term denoting seniority for the purposes of any future Indebtedness of the Company which the Company makes subordinate to any senior indebtedness or such other term denoting seniority.

Section 2.16. Interest Act Disclosure

For the sole purpose of disclosure pursuant to the Interest Act (Canada), the yearly rate of interest to which any rate of interest payable under this Indenture or any of the Notes that is calculated on any basis other than a full calendar year is equivalent may be determined by multiplying such rate by a fraction the numerator of which is the actual number of days in the calendar year in which such yearly rate of interest is to be ascertained and the denominator of which is the number of days comprising such other basis, and the rates of interest stipulated in this Indenture or in any of the Notes are intended to be nominal rates and not effective rates or yields.

Section 2.17. Limitation on Interest

If any provision of this Indenture or any of the Notes or any Guarantee would obligate the Company or any Guarantor to make any payment of interest or other amount payable to any Holder in an amount or calculated at a rate which would be prohibited by law, to the extent that the Company or such Guarantor may not lawfully waive the benefit of such law, or would result in a receipt by such Holder of interest at a criminal rate (as such terms are construed under the Criminal Code (Canada)) then, notwithstanding such provisions, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such Holder of interest at a criminal rate, such adjustment to

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be effected, to the extent necessary, as follows: (1) firstly, by reducing the amount or rate of interest required to be paid to such Holder under the Notes, and (2) thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid to such Holder which would constitute “interest” for purposes of Section 347 of the Criminal Code (Canada). Any amount or rate of interest referred to in this Section 2.17 shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term that the applicable Note remains outstanding on the assumption that any charges, fees or expenses that fall within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be pro-rated over that period of time and otherwise be pro-rated over the period from the Issue Date to the date of termination or cancellation of the applicable Notes and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Company shall be conclusive for the purposes of such determination.

ARTICLE III

REDEMPTION AND REPURCHASE

Section 3.01. Notices to Trustee.

If the Company elects to redeem Notes pursuant to the provisions of Section 3.07, 3.08 or 3.09, it shall furnish to the Trustee, at least 30 days but not more than 60 days before the Redemption Date, an Officers’ Certificate setting forth the Section of this Indenture pursuant to which the redemption shall occur, the Redemption Date, the principal amount of Notes to be redeemed and the Redemption Price.

If the Company is required to offer to repurchase Notes pursuant to the provisions of Sections 4.10 and 3.11 or Sections 4.15 and 3.10, it shall notify the Trustee in writing, at least 30 days but not more than 60 days before the Purchase Date, of the Section of this Indenture pursuant to which the repurchase shall occur, the Purchase Date, the principal amount of Notes required to be repurchased and the Purchase Price and shall furnish to the Trustee an Officers’ Certificate to the effect that the Company is required to make or has made a Net Proceeds Offer or a Change of Control Offer, as the case may be.

If the Registrar is not the Trustee, the Company shall, concurrently with each notice of redemption or repurchase, cause the Registrar to deliver to the Trustee a certificate (upon which the Trustee may rely) setting forth the principal amounts of Notes held by each Holder.

Section 3.02. Selection of Notes.

Except as set forth below, if less than all of the Notes are to be redeemed, the Trustee shall select the Notes or portions thereof to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not then listed on a national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate. In the event of partial redemption by lot, the particular Notes or portions thereof to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.

If less than all of the Notes tendered are to be repurchased pursuant to the provisions of Sections 4.10 and 3.11 or Sections 4.15 and 3.10, the Trustee shall select the Notes or portions thereof to be repurchased in compliance with Sections 4.10 and 3.11 or Sections 4.15 and 3.10, as applicable. If less than all of the Notes tendered are to be redeemed pursuant to the provisions of Section 3.07 or 3.08, the Trustee shall select the Notes only pro rata or on as nearly a pro rata basis as is practicable (subject to DTC procedures) or by such other method as may be required by law.

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The Trustee shall promptly notify the Company in writing of the Notes or portions thereof selected for redemption or repurchase and, in the case of any Note selected for partial redemption or repurchase, the principal amount thereof to be redeemed or repurchased. Notes and portions thereof selected shall be in amounts of US$1,000 or integral multiples of US$1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of US$1,000, shall be redeemed. No Notes of a principal amount of US$1,000 or less shall be redeemed in part.

Section 3.03. Notice of Optional or Special Redemption.

In the event Notes are to be redeemed pursuant to Section 3.07, 3.08 or 3.09, at least 30 days but not more than 60 days before the Redemption Date, the Company shall mail by first-class mail a notice of redemption to each Holder at its registered address whose Notes are to be redeemed in whole or in part, with a copy to the Trustee.

The notice shall identify the Notes or portions thereof to be redeemed and shall state:

(a) the Redemption Date;

(b) the Redemption Price;

(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and accrued interest, including Additional Interest, if any, thereon to the Redemption Date;

(f) that, unless the Company defaults in making the redemption payment, interest, including Additional Interest, if applicable, on Notes called for redemption will cease to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price and accrued interest, including Additional Interest, if any, thereon to the Redemption Date upon surrender to the Paying Agent of the Notes redeemed;

(g) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portions thereof) to be redeemed, as well as the aggregate principal amount of the Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption; and

(h) the section of the Notes pursuant to which the Notes called for redemption are being redeemed.

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense; provided that the Company shall deliver to the Trustee, at least 35 days prior to the Redemption Date (or such shorter period as may be acceptable to the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

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Section 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed, Notes or portions thereof called for redemption become due and payable on the Redemption Date at the Redemption Price. Upon surrender to any Paying Agent, such Notes or portions thereof shall be paid at the Redemption Price, plus accrued interest, including Additional Interest, if any, to the Redemption Date; provided, however, that installments of interest that are due and payable on or prior to the Redemption Date shall be payable to the Holders of such Notes, registered as such, at the close of business on the relevant record date for the payment of such installment of interest.

Section 3.05. Deposit of Redemption Price or Purchase Price.

On or before 10:00 A.M. New York City time on each Redemption Date or Purchase Date, the Company shall irrevocably deposit with the Trustee or with the Paying Agent (or if the Company is acting as its own Paying Agent, segregate and hold in trust) money in U.S. dollars sufficient to pay the aggregate amount due on all Notes to be redeemed or repurchased on that date, including without limitation any accrued and unpaid interest and Additional Interest, if any, to the Redemption Date or Purchase Date. The Company, the Trustee or the Paying Agent shall promptly return to the Company any money not required for that purpose.

Unless the Company defaults in making such payment, interest and Additional Interest, if any, on the Notes to be redeemed or repurchased will cease to accrue on the applicable Redemption Date or Purchase Date, whether or not such Notes are presented for payment. If any Note called for redemption shall not be so paid upon surrender because of the failure of the Company to comply with the preceding paragraph, interest, including Additional Interest, if applicable, will be paid on the unpaid principal, from the applicable Redemption Date or Purchase Date until such principal is paid, and on any interest, including Additional Interest, if applicable, not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01.

Section 3.06. Notes Redeemed or Repurchased in Part.

Upon surrender of a Note that is redeemed or repurchased in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to portion of the Note surrendered that is not to be redeemed or repurchased.

Section 3.07. Optional Redemption.

Except pursuant to Section 3.08 or 3.09, the Notes are not redeemable at the option of the Company before June 1, 2008. Thereafter, the Company may redeem the Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days’ notice, during any period set forth below at the Redemption Price (expressed as a percentage of the principal amount thereof) set forth opposite such period:

Year	Percentage
On or after June 1, 2008 and prior to June 1, 2009	104.50	%
On or after June 1, 2009 and prior to June 1, 2010	102.25	%
On June 1, 2010	100.00	%

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In addition, the Company must pay accrued and unpaid interest (including Additional Interest, if any) on the Notes redeemed to the applicable redemption date. Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06.

Section 3.08. Optional Redemption Upon Public Equity Offerings.

At any time, or from time to time, on or prior to June 1, 2007, the Company may, at its option, use the net cash proceeds from one or more Public Equity Offerings to redeem up to 35% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued hereunder (a “Special Redemption”) at a Redemption Price equal to 109.0% of the principal amount thereof plus accrued and unpaid interest (including Additional Interest, if any) thereon, if any, to the Redemption Date; provided that

(1) at least 65% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued hereunder remains outstanding immediately after any such Special Redemption; and

(2) the Company makes such Special Redemption not more than 90 days after the consummation of any such Public Equity Offering.

Any redemption pursuant to this Section 3.08 shall be made pursuant to the provisions of Sections 3.01 through 3.06.

Section 3.09. Redemption for Taxation Reasons.

The Company may at any time, upon not less than 30 nor more than 60 days notice, redeem in whole but not in part the outstanding Notes at a redemption price of 100% of the principal amount thereof plus accrued interest (including Additional Interest, if any) and any Additional Amounts to the Redemption Date if the Company has become or would become obligated to pay any Additional Amounts in respect of the Notes or the Guarantees as a result of:

(a) any change in or amendment to the laws (or regulations promulgated thereunder) of Canada (or any political subdivision or taxing authority thereof or therein), or

(b) any change in or amendment to any published administrative position regarding the application, or any change in the judicial interpretation, of such laws or regulations,

which change or amendment is announced or is effective on or after the Issue Date, and such obligation to pay Additional Amounts cannot be avoided by the Company or such Guarantor taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company or such Guarantor would be obliged to pay Additional Amounts were a payment in respect of such Notes then due and payable. Prior to the distribution of any notice of redemption pursuant to this Section 3.09, the Company shall deliver to the Trustee an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an Opinion Of Counsel reasonably acceptable to the Trustee to the effect that the Company or any Guarantor, as the case may be, has or will become obligated to pay Additional Amounts as a result of such change or amendment.

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Any redemption pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06.

Section 3.10. Repurchase upon Change of Control Offer.

(a) In the event that, pursuant to Section 4.15, the Company shall be required to commence a Change of Control Offer, it shall follow the procedures specified in this Section 3.10.

(b) The Change of Control Offer shall remain open for a period from the date of the mailing of the notice of the Change of Control Offer described in clause (c) below until a date determined by the Company which is at least 30 but no more than 45 days from the date of mailing of such notice and no longer, except to the extent that a longer period is required by applicable law (the “Change of Control Offer Period”). On the Purchase Date, which shall be no later than the last day of the Change of Control Offer Period, the Company shall purchase the principal amount of Notes properly tendered in response to the Change of Control Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) Within 30 days following any Change of Control, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Change of Control Offer. The Change of Control Offer shall be made to all Holders. The notice, which shall govern the terms of the Change of Control Offer, shall state:

(1) the transaction or transactions that constitute the Change of Control, providing material information, to the extent publicly available, regarding the Person or Persons acquiring control, and stating that the Change of Control Offer is being made pursuant to this Section 3.10 and Section 4.15 and that, to the extent lawful, all Notes properly tendered will be accepted for payment;

(2) the Purchase Price, the last day of the Change of Control Offer Period, and the Purchase Date;

(3) that any Note not properly tendered or otherwise not accepted for repurchase will continue to accrue interest and Additional Interest, if any;

(4) that, unless the Company defaults in the payment of the amount due on the Purchase Date, all Notes or portions thereof accepted for repurchase pursuant to the Change of Control Offer shall cease to accrue interest and Additional Interest, if any, after the Purchase Date;

(5) that Holders electing to have any Notes purchased pursuant to the Change of Control Offer will be required to tender the Notes, with the form entitled Option of Holder to Elect Purchase on the reverse of the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice not later than the close of business on the third Business Day preceding the Purchase Date;

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(6) that Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for repurchase, and a statement that such Holder is withdrawing his election to have the Notes redeemed in whole or in part; and

(7) that Holders whose Notes are being repurchased only in part will be issued new Notes equal in principal amount to the portion of the Notes tendered (or transferred by book-entry transfer) that is not to be repurchased, which portion must be equal to US$1,000 in principal amount or an integral multiple thereof.

(d) On or before 10:00 A.M. New York City time on the Purchase Date, the Company shall to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Purchase Price, together with accrued and unpaid interest and Additional Interest, if any, thereon to the Purchase Date in respect of all Notes or portions thereof so tendered and accepted for repurchase and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being repurchased by the Company. The Paying Agent shall promptly (but in any case not later than five days after the Purchase Date) mail to each Holder of Notes so repurchased the amount due in connection with such Notes, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company in the form of an Officers’ Certificate shall authenticate and mail or deliver (or cause to transfer by book entry) to each relevant Holder a new Note, in a principal amount equal to any unpurchased portion of the Notes surrendered to the Holder thereof; provided that each such new Note shall be in a principal amount of US$l,000 or an integral multiple thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Purchase Date.

(e) If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, in each case to the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no interest or Additional Interest, if applicable, shall accrue on any Notes so purchased in connection with the Change of Control Offer on or after such Purchase Date.

Section 3.11. Repurchase upon Application of Net Cash Proceeds.

(a) In the event that, pursuant to Section 4.10, the Company shall be required to commence a Net Proceeds Offer, it shall follow the procedures specified in this Section 3.11.

(b) The notice of a Net Proceeds Offer shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. Each Net Proceeds Offer will be mailed to all Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of US$1,000 in exchange for cash. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. Upon the expiration of that period, the Company shall promptly (but in any event within three Business Days following such expiration) purchase the Notes properly tendered in accordance with this Section 3.11 and Section 4.10 and any other Applicable Indebtedness (other than Indebtedness under the Credit Agreement) containing provisions similar to those set forth in Section 4.10 properly tendered in accordance with the agreements or instruments governing such other Applicable Indebtedness. The notice, which shall govern the terms of the Net Proceeds Offer, shall state:

(1) that the Net Proceeds Offer is being made pursuant to this Section 3.11 and Section 4.10;

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(2) the Net Proceeds Offer Amount, the Purchase Price and the Purchase Date;

(3) that any Note not properly tendered or otherwise not accepted for repurchase shall continue to accrue interest and Additional Interest, if any;

(4) that, unless the Company defaults in the payment of the amount due on the Purchase Date, all Notes or portions thereof accepted for repurchase pursuant to the Net Proceeds Offer shall cease to accrue interest and Additional Interest, if any, after the Purchase Date;

(5) that Holders electing to have any Notes repurchased pursuant to any Net Proceeds Offer shall be required to tender the Notes, with the form entitled Option of Holder to Elect Purchase on the reverse of the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Purchase Date;

(6) that Holders will be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the Purchase Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for repurchase and a statement that such Holder is withdrawing his election to have such Notes repurchased in whole or in part; and

(7) that, to the extent Holders properly tender Notes (along with any such other Applicable Indebtedness of the Company properly tendered) in an amount exceeding the Net Proceeds Offer Amount, the tendered Notes will be purchased pro rata based on the aggregate amounts of Notes and such other Applicable Indebtedness of the Company properly tendered (and the Trustee shall select the tendered Notes of tendering Holders pro rata based on the amount of Notes and such other Applicable Indebtedness of the Company properly tendered).

(c) On or before 10:00 A.M. New York City time on the Purchase Date, the Company shall to the extent lawful, (i) accept for payment, pro rata in accordance with this Indenture to the extent necessary, the Net Proceeds Offer Amount of Notes or portions thereof properly tendered pursuant to the Net Proceeds Offer (along with such other Applicable Indebtedness of the Company properly tendered), or if less than the Net Proceeds Offer Amount has been tendered, all Notes properly tendered, (ii) deposit with the Paying Agent an amount equal to the Purchase Price, plus accrued and unpaid interest and Additional Interest, if any, thereon to the Purchase Date in respect of all Notes or portions thereof so tendered and accepted for repurchase and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being repurchased by the Company. The Paying Agent shall promptly (but in any case not later than five days after the Purchase Date) mail to each Holder of Notes so repurchased the amount due in connection with such Notes, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company in the form of an Officers’ Certificate shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion to the Holder thereof; provided that each such new Note shall be in a principal amount of US$1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Net Proceeds Offer on or as soon as practicable after the Purchase Date.

(d) If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, in each case to the

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Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no interest or Additional Interest, if applicable, shall accrue on any Notes so purchased in connection with the Net Proceeds Offer on or after such Purchase Date.

ARTICLE IV

COVENANTS

Section 4.01. Payment of Notes.

The Company shall pay or cause to be paid the principal, Redemption Price and Purchase Price of, and interest and Additional Interest (if any) on, the Notes on the dates, in the amounts and in the manner provided herein and in the Notes. Principal, Redemption Price, Purchase Price and interest shall be considered paid on the date due if the Paying Agent, if other than the Company, holds as of 10:00 A.M. New York City time on the due date money in U.S. dollars deposited by the Company in immediately available funds and designated for and sufficient to pay the aggregate amount then due. The Company shall pay all Additional Interest, if any, on the dates, in the amounts and in the manner set forth in the Registration Rights Agreement.

The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal, Redemption Price and Purchase Price at the applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

(a) The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an Affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Office of the Trustee.

(b) The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain an office or agency in the Borough of Manhattan, the City of New York, for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

(c) The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. The Trustee may resign such agency at any time by giving written notice to the Company no later than 30 days prior to the effective date of such resignation.

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Section 4.03. Reports to Holders.

(a) For so long as any Notes remain outstanding, the Company will furnish to the Holders of the Notes the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) Whether or not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, the Company shall file with the Commission and furnish to the Holders of the Notes and the Trustee, within the time periods required for filing such forms and reports as specified in the Commission’s rules and regulations:

(1) annual reports on Form 40-F or Form 20-F, as applicable, or any successor form, and

(2) quarterly reports on Form 10-Q or Form 6-K, as applicable, or any successor form, which, regardless of applicable requirements, shall contain, at a minimum, (i) a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries, (ii) the financial statements required by the Commission’s Regulation S-X, including without limitation, Rule 3-10 thereunder, (iii) with respect to the annual financial statements only, a report thereon by the Company’s independent chartered accountants, and (iv) a reconciliation to U.S. GAAP as permitted by the Commission for foreign private issuers.

(c) In addition, following the consummation of the Exchange Offer, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information and reports with the Commission for public availability within the time periods specified in the Commission’s rules and regulations; provided, however, that the Company shall not be obligated to file such reports with the Commission if the Commission does not permit such filings.

Section 4.04. Compliance Certificate.

(a) The Company and each Guarantor shall deliver to the Trustee, within 180 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in Default in the performance or observance of any of the terms, provisions and conditions of this Indenture (and, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default) of which he or she may have knowledge.

(b) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, promptly upon any Officer of the Company obtaining knowledge of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and describing its status with reasonable particularity and what action the Company is taking or proposes to take with respect thereto.

Section 4.05. Payment of Taxes and Other Claims.

The Company shall pay or discharge, and shall cause each of its Subsidiaries to pay or discharge, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

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Section 4.06. Stay, Extension and Usury Laws.

The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though such law has not been enacted.

Section 4.07. Limitation on Restricted Payments.

(a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment, unless, if at the time of such Restricted Payment or immediately after giving effect thereto:

(i) no Default or an Event of Default shall have occurred and be continuing; and

(ii) the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.09; and

(iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall not exceed the sum of:

(v) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company for the period (treating such period as a single accounting period) commencing with the first full fiscal quarter after the Issue Date to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (the “Reference Date”); plus

(w) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of the Company or warrants, options or other rights to acquire Qualified Capital Stock of the Company (but excluding any debt security that is convertible into, or exchangeable for, Qualified Capital Stock) and 100% of the principal amount of any Indebtedness of the Company or any Restricted Subsidiary (other than Indebtedness that by its terms is subordinated to the Notes) that has been converted into or exchanged for Qualified Capital Stock of the Company or Holdings (other than to the extent of any Qualified Capital Stock issued to any Restricted Subsidiary of the Company); plus

(x) without duplication of any amounts included in clause (iii)(w) above, 100% of the aggregate net cash proceeds of any equity contribution (or the Fair Market Value of an equity contribution made in the form of Capital Stock of Holdings so long as such Capital Stock is used as consideration paid in an Asset Acquisition or to repay Indebtedness) received by the Company from a holder of the Company’s Capital Stock subsequent to the Issue Date (excluding, in the case of clauses (iii)(w) and (x), any net cash proceeds from a Public Equity Offering to the extent used to redeem the Notes in compliance with the provisions set forth in Section 3.08); plus

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(y) without duplication, the sum of:

(1) the aggregate amount of the return to capital with respect to any Investment (other than a Permitted Investment) made subsequent to the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments;

(2) the net cash proceeds received by the Company or any of its Restricted Subsidiaries from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company); and

(3) upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the Fair Market Value of such Subsidiary;

provided, however, that the sum of clauses (1), (2) and (3) above shall not exceed the aggregate amount of all such Investments made subsequent to the Issue Date.

Notwithstanding the foregoing and without duplication, the Company will not be permitted to include the first $7.5 million of aggregate cash proceeds received by the Company from the issuance and sale of the Sponsor Preferred Stock on or before or subsequent to the Issue Date that would otherwise be permitted to be included in clause (iii)(w) above.

(b) The foregoing provisions will not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration of such dividend or distribution if the dividend or distribution would have been permitted on the date of declaration;

(2) the redemption, repurchase, or other acquisition or retirement for value of any shares of Capital Stock of the Company or Holdings, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or Holdings or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or Holdings;

(3) the defeasance, redemption, repurchase or other acquisition of any Indebtedness that by its terms is subordinated to the Notes either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of (a) a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or Holdings, or (b) Refinancing Indebtedness or (iii) with the substantially concurrent receipt of a cash capital contribution from a direct or indirect holder of the Company’s Capital Stock to defease, redeem, repurchase or otherwise acquire such Indebtedness;

(4) if no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, or other acquisition or retirement for value by the Company of Common Stock of the Company or Holdings from current or former officers, directors and employees of the Company or any of its Subsidiaries at any time or from their authorized representatives upon the death, disability or termination of employment of such employees or termination of their seat on the board of the Company, in an aggregate amount not to exceed $2.0 million in any calendar year;

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(5) the repurchase of Common Stock deemed to occur upon the exercise of stock options to the extent such Common Stock represents a portion of the exercise price of such stock options;

(6) payments to NACG Preferred to pay its or Holdings’ operating and administrative expenses including, without limitation, directors fees, employee salaries and other compensation, legal, accounting and audit expenses, compliance expenses and similar Canadian compliance expenses and corporate franchise and other taxes, whether similar or dissimilar, in each case arising from NACG Preferred’s ownership of the Company, Holdings’ ownership of NACG Preferred or the Company’s businesses of the type permitted by Section 4.19, in an aggregate amount not to exceed $1.0 million per fiscal year;

(7) if NACG Preferred files a consolidated or combined return on behalf of itself and the Company and/or any Restricted Subsidiary of the Company following an enabling change in the Income Tax Act (Canada), payments to NACG Preferred pursuant to any reasonable tax sharing agreement or arrangement but only to the extent that amounts payable from time to time by the Company under any such agreement do not exceed the corresponding tax payments that the Company would have been required to make to any relevant taxing authority had the Company not joined in such consolidated or combined return, but instead had filed returns including only the Company;

(8) payments by the Company in an amount not to exceed, in the aggregate, in any calendar year, $1.0 million to the Equity Investors pursuant to the Advisory Services Agreement for advisory services and transactions fees; and

(9) Restricted Payments not to exceed $8.5 million in the aggregate.

In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of Section 4.07(a), amounts expended pursuant to clauses (1), (2)(ii), (4), (7), (8) and (9) of this Section 4.07(b) shall be included in such calculation. The amount of any non-cash Restricted Payment shall be the Fair Market Value thereof at the date of the making of such Restricted Payment.

Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.

The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to:

(1) pay dividends or make any other distributions on or in respect of its Capital Stock;

(2) make loans or advances to the Company or any other Restricted Subsidiary or to pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary of the Company; or

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(3) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, except in each case for such encumbrances or restrictions existing under or by reason of:

(a) applicable law, rule, regulation or order;

(b) this Indenture, the Notes, the Guarantees and the Collateral Agreements;

(c) customary non-assignment provisions of any contract or of any lease governing a leasehold interest of, or any license held by, any Restricted Subsidiary of the Company;

(d) any instrument governing Capital Stock of a Person acquired by the Company or by any Restricted Subsidiary of the Company or governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;

(e) (i) the 8 ³/4% Senior Notes Indenture or any other indenture governing debt securities that are permitted to be incurred hereunder and are no more restrictive, taken as a whole, with respect to dividend and other payment restrictions affecting Restricted Subsidiaries than those contained in the 8 ³/4% Senior Notes Indenture or (ii) any other agreement existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date;

(f) the Credit Agreement;

(g) restrictions on the transfer of assets subject to any Lien permitted under this Indenture imposed by the holder of such Lien;

(h) restrictions imposed by any agreement to sell or dispose of assets or Capital Stock, which sale or disposition is permitted under this Indenture, pending the closing of such sale or disposition;

(i) customary provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) or in licenses or leases or in asset or stock sale agreements or agreements similar to any of the foregoing entered into in the ordinary course of business;

(j) restrictions on net worth or on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business;

(k) mortgages, purchase money obligations for property acquired in the ordinary course of business or Capitalized Lease Obligations that impose restrictions of the nature described in clause (c) above on the property acquired with such Indebtedness; and

(l) an agreement amending, supplementing, modifying, restating, renewing, replacing, substituting, refinancing, increasing, refunding, extending, deferring or restructuring an agreement referred to in clauses (b), (d), (e) and (g) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any

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such agreement are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in its reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clauses (b), (d), (e) and (g).

Section 4.09. Limitation on Incurrence of Additional Indebtedness.

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (other than Permitted Indebtedness); provided, however, that if no Default or Event of Default shall occur as a consequence of the incurrence of any such Indebtedness, the Company or any of its Restricted Subsidiaries that is or, upon such incurrence, becomes a Guarantor may incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof and the application of the proceeds thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0.

(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”), each of which shall be given independent effect:

(1) Indebtedness under the Notes issued on the Issue Date and the related Guarantees and the Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement and the related Guarantees;

(2) Indebtedness incurred pursuant to the Credit Agreement in an aggregate principal amount at any time outstanding not to exceed the excess of (i) the greater of (x) $50.0 million and (y) the Borrowing Base; minus (ii) the aggregate amount of permanent reductions to the revolving commitments thereunder resulting from the receipt of Net Cash Proceeds of Asset Sales as provided in Section 4.10;

(3) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereon;

(4) Interest Swap Obligations of the Company or any Restricted Subsidiary of the Company covering Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that such Interest Swap Obligations are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on its outstanding Indebtedness to the extent the notional principal amount of such Interest Swap Obligation does not, at the time of the incurrence thereof, exceed the principal amount of the Indebtedness to which such Interest Swap Obligation relates;

(5) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

(6) Indebtedness of a Restricted Subsidiary of the Company to the Company or to a Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a

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Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement), in each case subject to no Lien held by a Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement); provided that if as of any date any Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement) owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause (6) by the issuer of such Indebtedness in the amount of the Indebtedness no longer so held;

(7) Indebtedness of the Company to a Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement), in each case subject to no Lien other than a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement); provided that (a) any Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor is unsecured and subordinated, pursuant to a written agreement, to the Company’s obligations under the Notes and (b) if as of any date any Person other than a Wholly Owned Restricted Subsidiary of the Company or the holder of a Permitted Lien described in clause (1), (2), (3), (16) or (17) of the definition thereof (provided that in the case of such clauses (16) and (17), such Permitted Lien secures a Swap Agreement) owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness under this clause (7) by the Company in the amount of the Indebtedness no longer so held;

(8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days of incurrence;

(9) Indebtedness of the Company or any of its Restricted Subsidiaries (including Indebtedness in respect of standby letters of credit) in respect of bid or performance bonds, completion guarantees, performance guarantees, workers’ compensation claims, surety or appeal bonds, and payment obligations in connection with self-insurance or similar obligations, in the ordinary course of business;

(10) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries incurred in the ordinary course of business not to exceed $20.0 million at any one time outstanding;

(11) Refinancing Indebtedness of Indebtedness incurred under clauses (1) and (3) above and this clause (11) and Section 4.09(a);

(12) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture;

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(13) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition; and

(14) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount (or the accreted value, if applicable) not to exceed $5.0 million at any one time outstanding.

For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (14) above or is entitled to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with this Section 4.09 and such Indebtedness shall be treated as incurred only once. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. Indebtedness under the Credit Agreement outstanding on the Issue Date, if any, will be deemed incurred for purposes of this Section 4.09 under clause (2) of this Section 4.09(b).

Section 4.10. Limitation on Asset Sales.

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(i) the Company or the applicable Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of;

(ii) at least 75% of the consideration received by the Company or the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash, Cash Equivalents and/or Replacement Assets (as defined below) (with the amount of consideration attributable to any such Replacement Assets equal to the Fair Market Value thereof) and is received at the time of such disposition; provided that for purposes of the provision, each of the following will be deemed to be cash:

(A) the amount of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Guarantee of a Guarantor) that are expressly assumed by the transferee of any such assets and so long as the documents governing such liabilities provide that there is no further recourse to the Company or any of its Subsidiaries with respect to such liabilities; and

(B) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are converted (by sale or other disposition) by the Company or such Restricted Subsidiary into cash or Cash Equivalents within 180 days of such Asset Sale, to the extent of the cash or Cash Equivalents received in that conversion; and

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(iii) the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 180 days of receipt thereof either:

(A) to (i) permanently reduce the commitments under the Credit Agreement and to the extent that the aggregate amount of revolving loans and letters of credit exceed the amount of the commitments thereunder as so reduced, repay such revolving loans and/or cash collateralize such letters of credit in an aggregate amount equal to such excess and/or (ii) permanently prepay the term loans or other non-revolving funded debt, if any, under the Credit Agreement;

(B) to make an investment in property, plant, equipment or other non-current assets that replace the properties and assets that were the subject of such Asset Sale or in property, plant, equipment or other non-current assets that will be used or useful in (or all of the Capital Stock of an entity that becomes a Wholly Owned Restricted Subsidiary and is engaged in) the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses that are the same, similar, ancillary or reasonably related thereto or are reasonable extensions thereof (“Replacement Assets”); and/or

(C) a combination of prepayment and investment permitted by the foregoing clauses (A) and (B).

(b) Pending the final application of such Net Cash Proceeds, the Company may temporarily reduce borrowings under the Credit Agreement or invest such Net Cash Proceeds in Cash Equivalents. On the 181^st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (A), (B) and (C) of Section 4.10(a)(iii) (each, a “Net Proceeds Offer Trigger Date”), any portion of the Net Cash Proceeds that have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (A), (B) and (C) of Section 4.10(a)(iii) (each a “Net Proceeds Offer Amount”) shall be subsequently applied by the Company or such Restricted Subsidiary to make an offer pursuant to Section 3.11 to purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders and all holders of other Applicable Indebtedness (other than Indebtedness under the Credit Agreement) containing provisions similar to those set forth in this Section 4.10, on a pro rata basis, the maximum principal amount of Notes and such other Applicable Indebtedness that may be purchased with the Net Proceeds Offer Amount at a Purchase Price in cash equal to 100% of the principal amount thereof (or if such Indebtedness was issued with original issue discount, 100% of the accreted value), plus accrued and unpaid interest (including Additional Interest, if any) to the date of purchase. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the amount of cash received (other than such interest) shall constitute Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10 and Section 3.11.

(c) The Company may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to clause (b) above).

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(d) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10, and shall comply with the provisions of this Section 4.10 and Section 3.11 with respect to such deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10 and Section 3.11.

(e) Each notice of a Net Proceeds Offer will be mailed by first class mail to the Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of US$1,000 in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, the Trustee will select the Notes to be purchased on a pro rata basis. A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. If any Net Cash Proceeds remain after the consummation of any Net Proceeds Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash Proceeds will be reset at zero.

(f) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.10 or Section 3.11, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 or Section 3.11 by virtue thereof.

Section 4.11. Limitations on Transactions with Affiliates.

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each, an “Affiliate Transaction”), other than (x) Affiliate Transactions permitted under clause (c) below and (y) Affiliate Transactions on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of the Company or such Restricted Subsidiary.

(b) All Affiliate Transactions (and each series of related Affiliate Transactions that are part of a common plan) involving aggregate payments or other property with a Fair Market Value in excess of $5.0 million shall be approved by a majority of members of the Board of Directors of the Company or such Restricted Subsidiary (including a majority of the disinterested members thereof), as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions. If the Company or any Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions as part of a common plan) that involves an aggregate Fair Market Value of more than $10.0 million, the Company or such Restricted Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor.

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(c) The restrictions set forth in clauses (a) and (b) of this Section 4.11 shall not apply to:

(1) reasonable and customary directors’ fees, indemnification and similar arrangements, employees’ salaries, bonuses or employment agreements, compensation or employee benefit arrangements and incentive arrangements with any officer, director or employee of the Company or any Restricted Subsidiary entered into in the ordinary course of business and payments under any indemnification arrangements permitted by applicable law, as determined in good faith by the Company’s Board of Directors;

(2) transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries; provided that such transactions are not otherwise prohibited by this Indenture;

(3) any agreement as in effect as of the Issue Date or any amendment, supplement, modification, restatement, renewal, replacement, refinancing, increase, refunding, extension, substitution or restructuring thereof or thereto or any transaction contemplated by any of the foregoing, so long as any such amendment, supplement, modification, restatement, renewal, replacement, refinancing, increase, refunding, extension, substitution or restructuring is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date;

(4) payments to permit payments for NACG Preferred or Holdings’ employees and officers and directors similar to those provided in clause (1) above and payments by the Company in an amount not to exceed, in the aggregate, in any calendar year, $1.0 million to the Equity Investors pursuant to the Advisory Services Agreement for advisory services and transactions fees;

(5) loans or advances to directors, officers or employees in the ordinary course of business in an amount not to exceed $1.0 million per fiscal year;

(6) Restricted Payments, Permitted Investments described in clause (6), (11), (12), (13) or (16) of the definition thereof and intercompany Indebtedness described in clause (6) or (7) of the definition of the term “Permitted Indebtedness”;

(7) any transaction with an Affiliate where the only consideration paid by the Company or any Restricted Subsidiary is Qualified Capital Stock of the Company or Holdings;

(8) sales of Capital Stock (other than Disqualified Capital Stock) of the Company or any such Capital Stock of Holdings that has been contributed to the Company, in each case, to Affiliates of the Company; and

(9) if NACG Preferred files a consolidated or combined return on behalf of itself and the Company and/or any Restricted Subsidiary of the Company following an enabling change in the Income Tax Act (Canada), payments to or other transactions with NACG Preferred pursuant to any tax sharing agreement approved by the Board of Directors of the Company or the relevant Restricted Subsidiary between the Company (or any Restricted Subsidiary) and any other Person with which the Company (or Restricted Subsidiary) files a consolidated tax return or with which the Company (or Restricted Subsidiary) is part of a consolidated group for tax purposes, but only to the extent that amounts payable from time to time by the Company under any such agreement do not exceed the corresponding tax payments that the Company would have been required to make to any relevant taxing authority had the Company not joined in such consolidated or combined return, but instead had filed returns including only the Company.

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Section 4.12. Limitation on Liens.

The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind (other than Permitted Liens) against or upon any property or assets of the Company or any of its Restricted Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom (other than in respect of Permitted Liens).

Section 4.13. Continued Existence.

Subject to Article V, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate or other existence and the corporate or other existence of each Guarantor in accordance with the organizational documents (as the same may be amended from time to time) of the Company or such Guarantor, except to the extent that the Board of Directors of the Company determines in good faith that the preservation of such existence is no longer necessary or desirable in the conduct of the business of the Company or such Guarantor, taken as a whole, and that the loss thereof is not disadvantageous in any material respect to the Holders.

Section 4.14. Insurance Matters.

The Company shall provide or cause to be provided for itself and each of its Subsidiaries insurance (including appropriate self-insurance) against loss or damage of the kinds that, in the reasonable, good faith judgment of the Board of Directors of the Company, are appropriate for the conduct of the business of the Company and its Subsidiaries.

Section 4.15. Offer to Repurchase upon Change of Control.

(a) Upon the occurrence of a Change of Control, the Company will be required to offer to purchase all or a portion of each Holder’s Notes pursuant to the offer described in Section 3.10 (the “Change of Control Offer”), at a Purchase Price equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, thereon to the Purchase Date.

(b) The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

(c) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.15 or Section 3.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.15 or Section 3.10 by virtue thereof.

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Section 4.16. Additional Guarantees.

If (x) the Company or any of its Restricted Subsidiaries shall organize, acquire or otherwise invest in another Restricted Subsidiary (other than an Immaterial Subsidiary) or (y) any Restricted Subsidiary of the Company that was an Immaterial Subsidiary no longer satisfies the definition thereof, then:

(1) in the case of the occurrence of any event described in clause (x) above, the Company and each applicable Restricted Subsidiary of the Company shall (a) execute and deliver to the Trustee such amendments to the Collateral Agreements as may be necessary or as the Trustee reasonably determines to be advisable to grant to the Trustee, for the benefit of itself and the Holders, a perfected security interest in the Capital Stock of such new Restricted Subsidiary and any debt securities of such new Restricted Subsidiary held by the Company or any of its Restricted Subsidiaries, subject to the Permitted Liens, which are owned by the Company or such Restricted Subsidiary and required to be pledged pursuant to the Collateral Agreements, (b) subject to the Intercreditor Agreement, deliver to the Trustee any certificates representing such Capital Stock and debt securities, together with (i) in the case of such Capital Stock, undated stock powers or instruments of transfer, as applicable, endorsed in blank, and (ii) in the case of such debt securities, endorsed in blank, in each case executed and delivered by an Officer of the Company or such Restricted Subsidiary, as the case may be; and

(2) in the case of the occurrence of any event described in clause (x) or (y) above, such other Restricted Subsidiary shall:

(a) execute and deliver to the Trustee a supplemental indenture in form reasonably satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee on a senior secured basis all of the Company’s obligations under the Notes and this Indenture on the terms set forth herein;

(b) take such actions as may be necessary or as the Trustee reasonably determines to be advisable to grant to the Trustee, for the benefit of itself and the Holders, a perfected security interest in the assets of such other Restricted Subsidiary, subject to the Permitted Liens and the Intercreditor Agreement, including the filing of Personal Property Security Act (Alberta) financing statements and any other applicable personal property security filings or registrations in such jurisdictions as may be required by the Collateral Agreements or by law or as may be reasonably requested by the Trustee;

(c) take such further action and execute and deliver such other documents specified herein, the Collateral Agreements or otherwise reasonably requested by the Trustee to effectuate the foregoing; and

(d) deliver to the Trustee an Opinion of Counsel to the effect that such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Restricted Subsidiary and constitute legal, valid, binding and enforceable obligations of such Restricted Subsidiary and such other opinions regarding the perfection of such Liens in the assets, Capital Stock and debt securities of such Restricted Subsidiary, subject to customary exceptions.

Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes hereof.

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Section 4.17. Payments for Consent.

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes, any Collateral Agreement, the Registration Rights Agreement or the Intercreditor Agreement unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Section 4.18. Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries.

The Company will not permit or cause any of its Restricted Subsidiaries to issue or sell any Capital Stock (other than to the Company or to a Wholly Owned Restricted Subsidiary of the Company) or permit any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company) to own or hold any Capital Stock of any Restricted Subsidiary of the Company or any Lien or security interest therein (other than as required by applicable law or any Permitted Lien); provided, however, that this provision shall not prohibit (1) any issuance or sale if, immediately after giving effect thereto, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made under Section 4.07 if made on the date of such issuance or sale or (2) the sale of all of the Capital Stock of a Restricted Subsidiary in compliance with Section 4.10.

Section 4.19. Conduct of Business.

The Company and its Restricted Subsidiaries will not engage in any businesses that are not the same, similar, ancillary or reasonably related, to (or reasonable extensions thereof, as determined in good faith by the Board of Directors of the Company) businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date.

Section 4.20. Limitations on Sale and Leaseback Transactions.

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

(a) the Company or such Restricted Subsidiary could have (a) incurred the Indebtedness attributable to such Sale and Leaseback Transaction pursuant to Section 4.09 and (b) granted a Lien to secure such Indebtedness pursuant to Section 4.12;

(b) the consideration received in connection with such Sale and Leaseback Transaction is at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and

(c) the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Company or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, Section 4.10.

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Section 4.21. Limitation on Designation of Unrestricted Subsidiaries.

(a) The Company may designate any Subsidiary of the Company as an “Unrestricted Subsidiary” under this Indenture (a “Designation”) only if:

(1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation;

(2) the Company would be permitted to make, at the time of such Designation, an Investment pursuant to Section 4.07(a) in an amount (the “Designation Amount”) equal to the Fair Market Value of the Company’s proportionate interest in such Subsidiary on such date; and

(3) such Subsidiary does not own any Capital Stock of, or own or hold any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated.

(b) No Subsidiary shall be designated as an “Unrestricted Subsidiary” unless such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to the Company or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates; and

(3) is a Person with respect to which neither the Company nor any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Capital Stock or (b) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results.

(c) If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes hereof and any Indebtedness of such Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such date and, if the Indebtedness is not permitted to be incurred under Section 4.09 or the Lien is not permitted under Section 4.12, the Company shall be in default of the applicable covenant.

(d) The Company may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”) only if:

(1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and

(2) all Liens or Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, be permitted to be incurred or made under this Indenture.

(e) All Designations and Redesignations must be evidenced by a Board Resolution certifying compliance with the foregoing provisions.

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Section 4.22. Limitation on Layering.

The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of the Company or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Guarantee of such Guarantor, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Company or such Guarantor, as the case may be.

Section 4.23. Impairment of Security Interest.

Subject to the Intercreditor Agreement, neither the Company nor any of its Restricted Subsidiaries will take or omit to take any action which would adversely affect or impair in any material respect the Liens in favor of the Trustee with respect to the Collateral. Neither the Company nor any of its Restricted Subsidiaries shall grant to any Person (other than the Trustee), or permit any Person (other than the Trustee), to retain any interest whatsoever in the Collateral other than holders of Permitted Liens. Neither the Company nor any of its Restricted Subsidiaries will enter into any agreement that requires the proceeds received from any sale of Collateral to be applied to repay, redeem, defease or otherwise acquire or retire any Indebtedness of any Person, other than as permitted by this Indenture, the Notes, the Intercreditor Agreement and the Collateral Agreements. The Company shall, and shall cause each Restricted Subsidiary to, at its sole cost and expense, execute and deliver all such agreements and instruments as the Trustee shall reasonably request to more fully or accurately describe the property intended to be Collateral or the obligations intended to be secured by the Collateral Agreements. The Company shall, and shall cause each Restricted Subsidiary to, at their sole cost and expense, file or register any such notice filings or other agreements or instruments as may be necessary or desirable under applicable law to perfect the Liens created by the Collateral Agreements at such times and at such places as the Trustee may reasonably request.

Section 4.24. Real Estate Mortgages and Filings.

With respect to any fee interest in any real property (individually and collectively, the “Premises”) (a) owned by the Company or a Restricted Subsidiary on the Issue Date or (b) acquired by the Company or a Restricted Subsidiary after the Issue Date, with (i) a purchase price or (ii) as of the Issue Date, a Fair Market Value, of greater than $500,000, on the Issue Date in the case of clause (a) and within 90 days of the acquisition thereof in the case of clause (b):

(1) the Company shall deliver to the Trustee, as mortgagee, fully executed counterparts of a Debenture (or an amendment to an existing Debenture, if applicable) or, if requested by the Trustee, separate Mortgages, duly executed by the Company or such Restricted Subsidiary, together with evidence of the completion (or satisfactory arrangements for the completion), of all recordings and filings of such Debenture, amendment or Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the properties purported to be covered thereby;

(2) the Company shall deliver to the Trustee a customary title opinion in respect of the covered Premises in favor of the Trustee from legal counsel and in form and substance reasonably satisfactory to the Trustee; and

(3) the Company shall deliver to the Trustee, with respect to each of the covered Premises, the most recent survey of such Premises, together with either (i) an updated survey

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certification in favor of the Trustee from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit from an officer of the Company or such Restricted Subsidiary stating that there has been no change to the facts depicted in the survey.

Section 4.25. Leasehold Mortgages and Filings.

The Company and each of its Restricted Subsidiaries shall use its reasonable efforts to deliver a Debenture (or an amendment to an existing Debenture, if applicable) or, if requested by the Trustee, separate Mortgages with respect to the Company’s or any such Restricted Subsidiaries’ leasehold interests in the premises (the “Leased Premises”) occupied by the Company or such Restricted Subsidiary pursuant to leases (collectively, the “Leases,” and individually, a “Lease”), together with evidence of registration of such Debenture, amendment or Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the properties purported to be covered thereby.

(i) Prior to the effective date of any Lease to be entered into following the Issue Date and (ii) within 90 days of the Issue Date with respect to any Lease outstanding on the Issue Date, the Company and such Restricted Subsidiaries shall use its reasonable efforts to provide to the Trustee all of the items described in clauses (2) and (3) of Section 4.24 with respect to the leasehold interest and in addition shall use their respective reasonable commercial efforts to obtain an agreement executed by the lessor under the Lease, whereby the lessor consents to the Debenture, amendment to the Debenture or Mortgage, as the case may be, and agrees to provide notice of default to the Trustee and an opportunity for Trustee to cure such default and such other customary terms as the Trustee may reasonably request (whether granted by the instrument creating the leasehold estate or by applicable law), if any, and which shall be entered into by the Trustee.

Section 4.26. Landlord, Bailee and Consignee Waivers.

Each of the Company and each of its Restricted Subsidiaries that is a lessee of, or becomes a lessee of, real property on or in which it will maintain, store, hold or locate all or any of its assets having an aggregate Fair Market Value of at least $50,000, is, and will be, required to use its reasonable best efforts to deliver to the Trustee a landlord waiver, substantially in the form of Exhibit G hereto, executed by the lessor of such real property; provided that in the case where such lease is a lease in existence on the Issue Date or the lessee thereof that is a Restricted Subsidiary of the Company was not a Restricted Subsidiary of the Company on the Issue Date, the Company or such Restricted Subsidiary that is the lessee thereunder shall have 90 days from the Issue Date or the date it became a Restricted Subsidiary after the Issue Date, as the case may be, to satisfy, on a reasonable best efforts basis, such requirement; provided further, that no such waiver need be obtained with respect to any leased real property, if such leased real property is the subject of a Mortgage that has been delivered pursuant to Section 4.25. Each of the Company and each of its Restricted Subsidiaries that provides any of its assets having an aggregate Fair Market Value of at least $50,000 to a bailee or consignee agrees to be bound by the terms of the immediately preceding sentence (other than the second proviso thereto), mutatis mutandis; provided, that (i) the terms “landlord”, “lessee” and “lease” shall be replaced, respectively, with the terms “bailee” or “consignee”, as applicable, “bailor” or “consignor”, as applicable, and the “applicable agreement” and (ii) the condition that the lessee maintain, store, hold or locate all or any of its assets having an aggregate Fair Market Value of at least $50,000 shall instead be replaced with the condition that the Fair Market Value of the assets subject to the applicable bailment or consignment have a Fair Market Value of at least $50,000. In addition, each of the Company and each such Restricted Subsidiary shall, to the extent it delivers a landlord, bailee or consignee waiver to any Senior Lienholder and has not already delivered such a waiver mutatis mutandis under this Section 4.26, concurrently with such delivery, deliver a comparable waiver from the applicable landlord, bailee or consignee to the Trustee.

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ARTICLE V

SUCCESSORS

Section 5.01. Merger, Consolidation and Sale of Assets.

(a) The Company will not, in a single transaction or series of related transactions, amalgamate, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company’s assets (determined on a consolidated basis for the Company and the Company’s Restricted Subsidiaries) to any Person unless:

(1) either:

(a) the Company shall be the surviving or continuing corporation; or

(b) the Person (if other than the Company) formed by such amalgamation or consolidation or into which the Company is merged or the Person that acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company’s Restricted Subsidiaries substantially as an entirety (the “Surviving Entity”):

(x) shall be a corporation organized and validly existing under the laws of Canada or any province or territory thereof, the United States or any State thereof or the District of Columbia; and

(y) shall expressly assume, (i) by supplemental indenture (in form and substance reasonably satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest (including Additional Interest, if any) on all of the Notes and the performance of every covenant of the Notes, this Indenture and the Registration Rights Agreement on the part of the Company to be performed or observed thereunder including, without limitation, the Company’s obligation to pay any Additional Amounts and (ii) by amendment, supplement or other instrument (in form and substance reasonably satisfactory to the Trustee), executed and delivered to the Trustee, all obligations of the Company under the Collateral Agreements, and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law, but subject to the Intercreditor Agreement, to perfect or continue the perfection of the Lien created under the Collateral Agreements on the Collateral owned by or transferred to the Surviving Entity;

(2) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall (a) have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company

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immediately prior to such transaction (after excluding the effect of reasonable expenses incurred or anticipated to be incurred in connection with such transaction) and (b) be able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09;

(3) immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and

(4) the Company or the Surviving Entity shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such amalgamation, consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of related transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

(b) Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with the terms of the Guarantee and this Indenture in connection with any transaction complying with the provisions of Section 4.10) will not, and the Company will not cause or permit any Guarantor to, amalgamate or consolidate with or merge with or into any Person other than the Company or any other Guarantor unless:

(1) the entity formed by or surviving any such amalgamation, consolidation or merger (if other than the Guarantor) or to which such sale, lease, conveyance or other disposition shall have been made is a corporation organized and existing under the laws of Canada, any province or territory thereof, the United States or any State thereof or the District of Columbia;

(2) such entity assumes (a) by supplemental indenture (in form and substance reasonably satisfactory to the Trustee), executed and delivered to the Trustee, all of the obligations of the Guarantor on the Guarantee and the performance of every covenant of the Guarantee, this Indenture and the Registration Rights Agreement on the part of the Guarantor to be performed or observed thereunder and (ii) by amendment, supplement or other instrument (in form and substance reasonably satisfactory to the Trustee), executed and delivered to the Trustee, all obligations of the Guarantor under the Collateral Agreements, and in connection therewith shall cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Agreements on the Collateral owned by or transferred to the Surviving Entity;

(3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

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(4) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, the Company could satisfy the provisions of Section 5.01(a)(2).

Any amalgamation, merger or consolidation of a Guarantor with and into the Company (with, in the case of a merger or consolidation, the Company being the surviving entity) or another Guarantor that is a Wholly Owned Restricted Subsidiary of the Company need only comply with Section 5.01(a)(4).

Section 5.02. Successor Corporation Substituted.

Upon any amalgamation, consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with Section 5.01 in which the Company is not the continuing corporation, the successor Person formed by such amalgamation or consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such Surviving Entity had been named as such.

ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

Each of the following constitutes an “Event of Default”:

(a) the failure to pay interest, including Additional Interest, on any Notes when the same becomes due and payable and the default continues for a period of 30 days;

(b) the failure to pay the principal of or premium, if any, on any Notes, when such principal or premium becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);

(c) the failure to make a Change of Control Offer as described in Sections 4.15 and 3.10, failure to make a Net Proceeds Offer as described in Sections 4.10 and 3.11 or a default in the observance or performance of the covenants described in Sections 4.07, 4.09 or 5.01, which failure or default continues for a period of 30 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes (except with respect to the Section 5.01, which will constitute an Event of Default with such notice requirement but without such passage of time requirement);

(d) the failure to comply with any other covenant or agreement contained in this Indenture or any Collateral Agreement which default continues for a period of 45 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes;

(e) the failure to pay at final maturity (giving effect to any applicable grace periods and any extensions thereof) the stated principal amount of any Indebtedness of the Company or any Restricted Subsidiary of the Company, or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal

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amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at final stated maturity or which has been accelerated (in each case with respect to which the 20-day period described above has elapsed), aggregates $10.0 million or more at any time;

(f) one or more judgments in an aggregate amount in excess of $10.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged coverage in writing) shall have been rendered against the Company or any of its Restricted Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable;

(g) the Company or any Significant Subsidiary of the Company:

(i) commences a voluntary case or proceeding under any Bankruptcy Law seeking (A) to adjudicate itself bankrupt or insolvent or (B) the liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any Bankruptcy Law;

(ii) consents to, or fails to contest, the entry of an order for relief against it in an involuntary case or proceeding under any Bankruptcy Law;

(iii) consents to, or fails to contest, the appointment of a custodian, receiver, interim-receiver, liquidator, trustee or similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors;

(v) admits in writing its inability to pay its debts as they become due; or

(vi) takes any corporate action to authorize any of the foregoing actions;

(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief in an involuntary case or proceeding against the Company or any Significant Subsidiary of the Company;

(ii) appoints a custodian, receiver, interim-receiver, liquidator, trustee or similar official of the Company or any Significant Subsidiary or for all or substantially all of the property of any of the foregoing; or

(iii) orders the liquidation of the Company or any of its Significant Subsidiaries;

and the order or decree remains undismissed or unstayed and in effect for 60 consecutive days;

(i) any Guarantee of a Significant Subsidiary ceases to be in full force and effect or any Guarantee of a Significant Subsidiary is declared to be null and void and unenforceable or any Guarantee of a Significant Subsidiary is found to be invalid or any Guarantor that is a Significant Subsidiary denies its liability under its Guarantee (other than by reason of termination of this Indenture or release of a Guarantor from its Guarantee in accordance with the terms of this Indenture);

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(j) any Collateral Agreement at any time for any reason shall cease to be in full force and effect in all material respects, or ceases to give the Trustee the Liens, rights, powers and privileges purported to be created thereby, superior to and prior to the rights of all third Persons other than the holders of Permitted Liens and subject to no other Liens except as expressly permitted by the applicable Collateral Agreement; or

(k) the Company or any of the Guarantors, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of any Collateral Agreement.

Section 6.02. Acceleration.

If an Event of Default (other than an Event of Default specified in clauses (g) or (h) of Section 6.01 with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes may declare the principal of and premium, if any, and accrued interest, including Additional Interest, if any, on all the Notes to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that it is a “notice of acceleration” (the “Acceleration Notice”), and the same shall become immediately due and payable.

If an Event of Default specified in clauses (g) or (h) of Section 6.01 with respect to the Company occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest, including Additional Interest, if any, on all of the outstanding Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

At any time after a declaration of acceleration with respect to the Notes as described in the preceding paragraphs, the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration and its consequences:

(1) if the rescission would not conflict with any judgment or decree;

(2) if all existing Events of Default have been cured or waived except nonpayment of principal, premium, if any, or interest, including Additional Interest, if any, that has become due solely because of the acceleration;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest, including Additional Interest, if any, and overdue principal and premium, if any, which has become due otherwise than by such declaration of acceleration, has been paid;

(4) if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses, disbursements and its advances; and

(5) in the event of the cure or waiver of an Event of Default of the type described in clause (g) or (h) of Section 6.01, the Trustee shall have received an Officers’ Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03. Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, interest or Additional Interest, if any, on the Notes or to enforce the performance of any provision of the Notes, the Guarantees, this Indenture or, subject to the Intercreditor Agreement, the Collateral Agreements.

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The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding, and any recovery or judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

The Holders of a majority in principal amount of the Notes may waive any existing Default or Event of Default under this Indenture, and its consequences, except a default in the payment of the principal of or interest on any Notes. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05. Control by Majority.

Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture that the Trustee reasonably determines may be unduly prejudicial to the rights of other Holders of Notes or that may subject the Trustee to personal liability and shall be entitled to the benefit of Sections 7.01(c)(iii) and 7.01(e).

Section 6.06. Limitation on Suits.

A Holder of a Note may pursue a remedy with respect to this Indenture, the Notes, the Guarantees or, subject to the Intercreditor Agreement, the Collateral Agreements only if:

(a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(c) such Holder or Holders of Notes offer and, if requested, provide to the Trustee reasonable indemnity satisfactory to the Trustee against any loss, liability or expense;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

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Section 6.07. Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, or premium, if any, interest or Additional Interest, if any, on the Note, on or after the respective due dates thereon (including in connection with an offer to repurchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the written consent of such Holder.

Section 6.08. Collection Suit by Trustee.

If an Event of Default specified in Section 6.0l(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and Additional Interest, if any, and such further amounts as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expense, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents (including accountants, experts or such other processionals as the Trustee deems necessary, advisable or appropriate) and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

If the Trustee collects any money pursuant to this Article VI, it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second: if the Holders are forced to proceed against the Company directly without the Trustee, to the Holders for their collection costs;

Third: to Holders of Notes for amounts due and unpaid on the Notes for principal, Purchase Price, Redemption Price and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, Purchase Price, Redemption Price and Additional Interest, if any, and interest, respectively; and

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Fourth: to the Company, the Guarantors, if any, or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a special record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

Section 6.12. Restoration of Rights and Remedies.

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

ARTICLE VII

TRUSTEE

Section 7.01. Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, the Collateral Agreements and the Intercreditor Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the TIA and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, without investigation, as to the truth or the statements and the correctness of the opinions expressed therein, upon and statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform on their face to the requirements of this Indenture but not confirm or investigate the accuracy of mathematical calculations or other facts stated therein or otherwise verify the contents thereof.

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(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this clause (c) does not limit the effect of clause (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

(e) No provision of this Indenture, the Collateral Agreements and the Intercreditor Agreement shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture, the Collateral Agreements or the Intercreditor Agreement at the request of any Holder, pursuant to the provisions of this Indenture, the Collateral Agreements and the Intercreditor Agreement, including Section 6.05 of this Indenture, unless such Holder shall have offered to the Trustee indemnity reasonably satisfactory to it against any loss, liability or expense which might be incurred by it in compliance with such request or direction.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

Section 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrain from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel and Opinions of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys, accountants, experts and such other professionals as the Trustee deems necessary, advisable or appropriate and shall not be responsible for the misconduct or negligence of any attorney, accountant, expert or other such professional appointed with due care.

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(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture, the Collateral Agreements and the Intercreditor Agreement.

(e) Unless otherwise specifically provided herein, any demand, request, direction or notice from the Company shall be sufficiently evidenced by a written order signed by two Officers of the Company.

(f) The Trustee shall not be charged with knowledge of any Default or Event of Default under Section 6.01 (other than under Section 6.01(a) (subject to the following sentence) or Section 6.01(b)) unless either (i) a Responsible Officer shall have actual knowledge thereof, or (ii) the Trustee shall have received notice thereof in accordance with Section 12.02 from the Company or any Holder of the Notes. The Trustee shall not be charged with knowledge of the Company’s obligation to pay Additional Interest or Additional Amounts, or the cessation of such obligation, unless the Trustee receives written notice thereof from the Company or any Holder.

Section 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest within the meaning of the TIA it must eliminate such conflict within 90 days, apply (subject to the consent of the Company) to the Commission for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee shall also be subject to Sections 7.10 and 7.11.

Section 7.04. Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Guarantees or the Collateral Agreements (or the validity or perfection of any Lien purported to be granted thereunder) or the Intercreditor Agreement it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any offering memorandum or registration statement relating to the Notes other than its certificate of authentication.

Section 7.05. Notice of Defaults.

If a Default or Event of Default occurs and is continuing and is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default in payment on any Note (including payments pursuant to the redemption provisions of such Note), the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

Within 60 days after each December 1 beginning with the December 1 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

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A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the Commission and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange.

Section 7.07. Compensation, Reimbursement and Indemnity.

The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and the rendering by it of the services required hereunder and under the Collateral Agreements and the Intercreditor Agreement. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by or on behalf of it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s attorneys, accountants, experts and such other professionals as the Trustee deems necessary, advisable or appropriate.

The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture (including its duties under Section 9.06), including the costs and expenses of enforcing this Indenture, any Collateral Agreement, the Intercreditor Agreement or any Guarantee against the Company or a Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Company, any Guarantor, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend any claim or threatened claim asserted against the Trustee, and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Company under this Section 7.07 shall survive the resignation or removal of the Trustee, the satisfaction and discharge of this Indenture and the termination of this Indenture.

To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes and Guarantees on all money or property held or collected by the Trustee, except that held in trust to pay principal, Redemption Price or Purchase Price of or Additional Interest, if any, or interest on, particular Notes. Such Lien shall survive the resignation or removal of the Trustee, the satisfaction and discharge of this Indenture and the termination of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

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Section 7.08. Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a custodian, receiver or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the date on which the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

If a successor Trustee does not take office within 30 days after the retiring trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder of a Note who has been a bona fide holder of a Note or Notes for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, Etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation that is eligible under Section 7.10, the successor corporation without any further act shall be the successor Trustee.

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Section 7.10. Eligibility; Disqualification.

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof (including the District of Columbia) that is authorized under such laws to exercise corporate trust power, that is subject to supervision or examination by federal or state authorities and that has a combined net capital and surplus of at least US$100 million as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).

Section 7.11. Preferential Collection of Claims Against Company.

The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

Section 7.12. Trustee as Agent.

References to the Trustee in Sections 7.01, 7.02, 7.03, 7.04, 7.07 and 7.08 and the first paragraph of Section 7.09 shall include the Trustee in its role as an Agent.

Section 7.13. Sub-Collateral Agent.

(a) At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Collateral may at the time be located, the Company and the Trustee shall have the power to appoint, and, upon the written request of the Trustee or of the Holders of at least 25% in principal amount of the Notes outstanding, the Company shall for such purpose, join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as sub-collateral agent (each, a “Sub-Collateral Agent”), jointly with the Trustee, of all or any part of the Collateral with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power, deemed necessary or desirable, subject to the other provisions of this Section 7.13. If the Company does not join such appointment within 15 days after the receipt by it of a request to do so, or if an Event of Default shall have occurred and be continuing, the Trustee alone shall have the power to make such appointment.

(b) Should any written instrument from the Company be required by any Sub-Collateral Agent so appointed for more fully confirming to such Sub-Collateral Agent such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Company.

(c) Every Sub-Collateral Agent shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely:

(i) The Notes shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely by the Trustee.

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(ii) The rights, powers, duties and obligations hereby conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such Sub-Collateral Agent, jointly as shall be provided in the instrument appointing such Sub-Collateral Agent, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such Sub-Collateral Agent.

(iii) The Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company evidenced by a Board Resolution, may accept the resignation of or remove any Sub-Collateral Agent appointed under this Section 7.13, and, in case an Event of Default has occurred and is continuing, the Trustee shall have power to accept the resignation of, or remove, any such Sub-Collateral Agent without the concurrence of the Company. Upon the written request of the Trustee, the Company shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any Sub-Collateral Agent so resigned or removed may be appointed in the manner provided in this Section 7.13.

(iv) The Trustee shall not be personally liable by reason of any act or omission of any Sub-Collateral Agent hereunder.

(v) Any act of Holders delivered to the Trustee shall be deemed to have been delivered to each such Sub-Collateral Agent.

(d) Computershare Trust Company of Canada is hereby appointed as a Sub-Collateral Agent and its acceptance of the same shall be evidenced by its execution of any Collateral Agreement; provided that the Trustee and the Company shall execute, deliver and perform any other agreements or instruments as may be necessary or proper to effectuate such appointment.

(e) Notwithstanding any other provision hereof, any references herein to a Collateral Agreement or any related document or instrument stated to granted in favor of the Trustee or to which the Trustee is a party shall be deemed to mean, if applicable, such Collateral Agreement or related document or instrument stated to granted in favor of the Trustee and/or the Sub-Collateral Agent or to which the Trustee or the Sub-Collateral Agent is a party.

ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at its option evidenced by a resolution of its Board of Directors set forth in an Officers’ Certificate, at any time, elect to have its obligations and the obligations of any Guarantors discharged with respect to the then outstanding Notes in accordance with either Section 8.02 or 8.03 as provided in this Article VIII.

Section 8.02. Legal Defeasance and Discharge.

Upon the Company’s exercise under Section 8.01 of the option applicable to this Section 8.02, the Company and any Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date

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the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Guarantors, if any, shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes and any Guarantees thereon, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 and the other Sections of this Indenture referred to in clauses (a) through (d) below, and to have satisfied all their other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest, including Additional Interest, if any, on the Notes when such payments are due;

(b) the Company’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payments;

(c) the rights, powers, trust, duties and immunities of the Trustee and the Company’s obligations in connection therewith; and

(d) the Legal Defeasance provisions of this Article VIII.

Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.02, notwithstanding the prior exercise of its option under Section 8.03.

Section 8.03. Covenant Defeasance.

Upon the Company’s exercise under Section 8.01 of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04, be released from its obligations under the covenants contained in Sections 3.10, 3.11, 4.03, 4.04, 4.07 through 4.12, 4.14 through 4.16, 4.18 through 4.26 and 5.01 with respect to the outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04, Sections 6.01(c) through 6.01(f) and 6.01(i) through 6.01(k) shall not constitute Events of Default.

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Section 8.04. Conditions to Legal or Covenant Defeasance.

The following are the conditions precedent to the application of either Section 8.02 or 8.03 to the outstanding Notes as specified:

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, non-callable U.S. government obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest, including Additional Interest, if any, on the Notes on the stated date for payment thereof or on the applicable Redemption Date, as the case may be;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

(a) the Company has received from, or there has been published by, the Internal Revenue Service or the Canada Revenue Agency, as the case may be, a ruling; or

(b) since the date of this Indenture, there has been a change in the applicable Canadian or U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Canadian or U.S. federal income tax purposes or become subject to Canadian non-resident withholding tax as a result of such Legal Defeasance and will be subject to Canadian or U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders will not recognize income, gain or loss for Canadian or U.S. federal income tax purposes or become subject to Canadian non-resident withholding tax as a result of such Covenant Defeasance and will be subject to Canadian or U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or insofar as Defaults or Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91^st day after the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(6) the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;

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(7) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and

(8) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that assuming no intervening bankruptcy of the Company between the date of deposit and the 91^st day following the date of deposit, after the 91^st day following the date of deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable or (B) will become due and payable on the maturity date within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

Section 8.05. Deposited Money and U.S. Government Securities to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06, all money and U.S. Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05 only) pursuant to Section 8.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, Redemption Price of, and Additional Interest, if any, or interest on, the Notes, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Securities deposited pursuant to Section 8.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or U.S. Government Securities held by it as provided in Section 8.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal, Redemption Price of, or Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof as a general creditor, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, at the expense of the Company, if required by applicable law cause to be published once, in The New York Times and The Wall Street

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Journal (national editions), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days after the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 8.07. Reinstatement.

If the Trustee or Paying Agent is unable to apply any U.S. dollars or U.S. Government Securities in accordance with Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Company under this Indenture, the Notes and the Collateral Agreements and the Guarantors under this Indenture, the Guarantees and the Collateral Agreements shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03, as the case may be; provided, however, that, if the Company makes any payment with respect to any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Securities held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors, if any, and the Trustee may amend or supplement this Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement without the consent of any Holder of a Note:

(1) to cure any ambiguity, omission, defect or inconsistency contained therein;

(2) to provide for the assumption of the Company’s or a Guarantor’s obligations to the Holders of the Notes pursuant to Article V;

(3) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the TIA;

(4) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the rights of any Holder of the Notes under this Indenture, the Notes, the Guarantees, the Collateral Agreements or the Intercreditor Agreement in any material respect;

(5) to allow any Subsidiary or any other Person to guarantee the Notes;

(6) to evidence or provide for a successor Trustee in accordance with the terms of Section 7.08;

(7) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(8) to release a Guarantor and the Liens granted by such Guarantor in favor of the Trustee as permitted by this Indenture and the relevant Guarantee; or

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(9) if necessary, in connection with any addition or release of Collateral permitted under the terms of this Indenture, the Intercreditor Agreement or Collateral Agreements,

so long as such amendment does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect. In formulating its opinion on such matters, the Trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel.

Upon the written request of the Company, accompanied by a Board Resolution (evidenced by an Officers’ Certificate) authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Company in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

Except as provided below in this Section 9.02, the Company, the Trustee and the Guarantors, if any, may amend or supplement this Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a tender offer or exchange offer for the Notes), and, subject to Sections 6.02, 6.04 and 6.07, any existing Default or Event of Default or compliance with any provision of this Indenture, the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes).

Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver of any provision of this Indenture, the Notes, the Guarantees, the Collateral Agreements or the Intercreditor Agreement;

(2) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest or Additional Interest, if any, on any Notes;

(3) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption or reduce the Redemption Price therefor;

(4) make any Notes payable in money other than that stated in the Notes;

(5) make any change in provisions of this Indenture relating to the right of each Holder to receive payment of principal of or premium, if any, or interest, including Additional Interest, if any, on such Note on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Notes to waive Defaults or Events of Default;

(6) after the Company’s obligation to purchase Notes arises thereunder, amend, change or modify in any material respect the obligation of the Company to make and

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consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect to any Asset Sale that has been consummated or, after such Change of Control has occurred or such Asset Sale has been consummated, modify any of the provisions or definitions with respect thereto; or

(7) modify or change any provision of this Indenture or the related definitions affecting the ranking of the Notes or any Guarantee or any Lien created under any Collateral Agreement in a manner that adversely affects the Holders of the Notes;

(8) release any Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or this Indenture otherwise than in accordance with the terms of this Indenture or the Intercreditor Agreement;

(9) release all or substantially all of the Collateral other than in accordance with the terms of this Indenture and the Collateral Agreements or the Intercreditor Agreement;

(10) modify or change the provisions of this Indenture relating to the eligibility to receive, or the computation of, Additional Amounts in a manner that adversely affects the rights of any Holder; or

(11) make any change to Section 9.01 or this Section 9.02.

Upon the written request of the Company accompanied by a resolution of the Board (evidenced by an Officers’ Certificate) authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Section 9.03. Compliance with TIA.

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not

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made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and therefor binds every Holder.

Section 9.05. Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendment, Etc.

The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until the Board approves such amended or supplemental indenture. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive, in addition to the documents required by Sections 12.04 and 12.05, and, subject to Section 7.01, shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

ARTICLE X

GUARANTEE

Section 10.01. Unconditional Guarantee.

Each Guarantor by executing a counterpart of this Indenture or a supplemental indenture as provided in Section 4.16 hereby unconditionally guarantees (each, a “Guarantee”), on a senior secured basis and jointly and severally, to each Holder of a Note authenticated and delivered by the Trustee, that: (i) the principal of and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, upon redemption, purchase pursuant to Article III or otherwise, and interest on the overdue principal, if any, and interest on any overdue installment of interest, to the extent lawful, on the Notes and all other obligations of the Company to the Holders hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at maturity, by acceleration, upon redemption, purchase pursuant to Article III or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.03. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, the recovery of any judgment against the Company, and action to enforce the same or any other circumstance (other than performance) which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations

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contained in the Notes, this Indenture and in this Guarantee. If any Holder or the Trustee is required by any court or otherwise to return to the Company, any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article VI, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guarantee.

Each of the Guarantors hereby indemnifies the Holders on demand against any loss or liability suffered by them as a result of its Guarantee being or becoming unenforceable, invalid or illegal in whole or in part. The covenants and agreements on the part of the Guarantors herein contained shall be joint and several obligations, and no Guarantor shall be released from liability hereunder by reason of this Guarantee ceasing to be binding on any other Guarantor.

Section 10.02. Severability.

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

Section 10.03. Limitation of Guarantor’s Liability.

Each Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the obligations of such Guarantor under the Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to Section 10.05, result in the obligations of such Guarantor under the Guarantee not constituting such fraudulent transfer or conveyance.

Section 10.04. Release of Guarantor.

(a) Any Guarantee by a Guarantor (and, except with respect to any event described in clause (1)(A), (B) or (C) below, any Liens granted by it pursuant to any Collateral Agreement) shall be automatically and unconditionally released and discharged (provided, however, that if any event described in clause (3) shall occur, such Liens shall not be released and discharged with respect to the assets or Capital Stock so sold or otherwise disposed), without any further action required on the part of the Trustee or any Holder of the Notes, upon:

(1) (A) the amalgamation or consolidation of such Guarantor with the Company or any Guarantor that is a Wholly Owned Restricted Subsidiary of the Company; (B) the merger of such Guarantor with or into the Company or any Guarantor that is a Wholly Owned Restricted Subsidiary of the Company; (C) the sale of all or substantially all of the assets of such Guarantor to the Company or any Guarantor that is a Wholly Owned Restricted Subsidiary of the Company; or (D) the dissolution of such Guarantor;

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(2) the Designation of such Guarantor as an Unrestricted Subsidiary pursuant to Section 4.21; or

(3) (A) the sale or other disposition (by merger or otherwise) of all or substantially all of the assets of such Guarantor to any Person that is not a Restricted Subsidiary of the Company, or (B) the sale or other disposition (by merger or otherwise) to any Person that is not a Restricted Subsidiary of the Company of such of the Capital Stock of such Guarantor owned directly or indirectly by the Company so that the Company no longer owns, directly or indirectly, greater than 50% of the Common Stock of such Guarantor; provided that such sale or disposition of such Capital Stock or assets is otherwise in compliance with the terms of this Indenture.

(b) The Trustee shall, if the Company requests, deliver an appropriate instrument evidencing such release upon receipt of a request by the Company accompanied by an Officers’ Certificate and Opinion of Counsel certifying as to the compliance with this Section 10.04.

(c) All Guarantees shall be of no further force and effect upon the occurrence of (i) a Legal Defeasance or a Covenant Defeasance pursuant to Section 8.02 or 8.03, subject to reinstatement pursuant to Section 8.07 under the circumstances described therein or (ii) a satisfaction and discharge pursuant to Section 11.01, subject to reinstatement pursuant to Section 11.04 under the circumstances described therein.

Section 10.05. Contribution.

In order to provide for just and equitable contribution among the Guarantors, the Guarantors agree, inter se, that in the event any payment or distribution is made by any Guarantor (a “Funding Guarantor”) under the Guarantee, such Funding Guarantor shall be entitled at the election of the Company to a contribution from all other Guarantors in a pro rata amount based on the Adjusted Net Assets (as defined below) of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company’s obligations with respect to the Notes or any other Guarantor’s obligations with respect to the Guarantee. “Adjusted Net Assets” of such Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Guarantee, of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), excluding debt in respect of the Guarantee of such Guarantor, as they become absolute and matured.

Section 10.06. Waiver of Subrogation.

Until all Obligations under the Notes and this Indenture are paid in full, each Guarantor, hereby irrevocably waives any claims or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under the Guarantee and this Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of any Holder against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or

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indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders, and shall, forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.06 is knowingly made in contemplation of such benefits.

Section 10.07. Execution of Guarantee.

To evidence its guarantee to the Holders set forth in this Article X, each Guarantor executing this Indenture or subsequently required to execute and deliver a Guarantee pursuant to Section 4.16 hereby agrees to execute the Guarantee in substantially the form attached hereto as Exhibit C, which shall be endorsed on each Note ordered to be authenticated and delivered by the Trustee. Each Guarantor hereby agrees that its Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. Each such Guarantee shall be signed on behalf of each Guarantor by two Officers, or an Officer and an Assistant Secretary or one Officer shall sign and one Officer or an Assistant Secretary (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall attest to such Guarantee prior to the authentication of the Note on which it is endorsed, and the delivery of such Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of such Guarantee on behalf of such Guarantor. Such signatures upon the Guarantee may be by manual or facsimile signature of such officers and may be imprinted or otherwise reproduced on the Guarantee, and in case any such officer who shall have signed the Guarantee shall cease to be such officer before the Note on which such Guarantee is endorsed shall have been authenticated and delivered by the Trustee or disposed of by the Company, such Note nevertheless may be authenticated and delivered or disposed of as though the Person who signed the Guarantee had not ceased to be such officer of the Guarantor.

Section 10.08. Waiver of Stay, Extension or Usury Laws.

Each Guarantor hereby covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive each such Guarantor from performing its Guarantee as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) each such Guarantor hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE XI

SATISFACTION AND DISCHARGE

Section 11.01. Satisfaction and Discharge.

This Indenture (and all Liens on Collateral in connection with the issuance of the Notes) will be discharged and will cease to be of further effect (except as set forth below) as to all outstanding Notes and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture when:

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(1) either:

(a) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or

(b) all Notes not theretofore delivered to the Trustee for cancellation (1) have become due and payable by reason of the mailing of a notice of redemption or otherwise, (2) will become due and payable at their stated maturity within one year, or (3) are to be called for redemption within one year, under arrangements reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in U.S. dollars in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest, including Additional Interest, if any, on the Notes to the date of maturity or redemption, as the case may be, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

(2) the Company has paid all other sums payable under this Indenture and the Collateral Agreements by the Company; and

(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the Company’s obligations in Sections 2.03, 2.04, 2.06, 2.07, 2.11, 7.07, 7.08, 11.02, 11.03, 11.04, 12.02 and 12.03, and the Trustee’s and Paying Agent’s obligations in Sections 11.02 and 11.03 shall survive until the Notes are no longer outstanding. Thereafter, only the Company’s obligations in Section 7.07 shall survive.

Section 11.02. Deposited Funds to Be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 11.03, all funds (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 11.02 only) pursuant to Section 11.01 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, Redemption Price of, and Additional Interest, if any, or interest on, the Notes, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the funds deposited pursuant to Section 11.01 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

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Section 11.03. Repayment to Company.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal, Redemption Price of, or Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof as a general creditor, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, at the expense of the Company, if required by applicable law cause to be published once, in The New York Times and The Wall Street Journal (national editions), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days after the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 11.04. Reinstatement.

If the Trustee or Paying Agent is unable to apply any funds in accordance with Section 11.02, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Company under this Indenture, the Notes and the Collateral Agreements and the Guarantors under this Indenture, the Guarantees and the Collateral Agreements shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 11.01; provided, however, that, if the Company makes any payment with respect to any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the funds held by the Trustee or Paying Agent.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Trust Indenture Act Controls.

If any provision hereof limits, qualifies or conflicts with a provision of the TIA or another provision that would be required or deemed under such Act to be part of and govern this Indenture if this Indenture were subject thereto, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 12.02. Notices.

Any notice or communication by the Company, any Guarantor or the Trustee to others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Company or any Guarantor:

c/o North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5A7

Facsimile: (780) 960-7103

Attention: Vincent Gallant

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With a copy to:

Bracewell & Giuliani LLP

711 Louisiana Street, Suite 2300

Houston, Texas 77002

Attention: Gary W. Orloff

Facsimile: 713-221-2166

If to the Trustee:

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Fax: (817) 885-8650

The Company or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed, or in the case of any offer to purchase Notes under Section 3.09, 3.10 or 3.11 upon the date the communication is postmarked; when answered back, if telexed, but on the next Business Day if received after normal business hours; when receipt acknowledged, if telecopied, but on the next Business Day if received after normal business hours; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery, except that notices to the Trustee shall be effective only upon receipt.

Any notice or communication to a Holder shall be mailed by first class mail, postage prepaid, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the address receives it.

If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

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Notwithstanding the location of offices for delivery of notices, the corporate trust office of the Trustee is located at c/o Wells Fargo Bank, N.A., MAC T5415-030, 45 Broadway, 12^th Floor, New York, New York 10006.

Section 12.03. Communication by Holders of Notes with Other Holders of Notes.

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 12.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company and/or any Guarantor to the Trustee to take any action under this Indenture, the Company and/or any Guarantor shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) stating that, in the opinion of the signer, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) if requested by the Trustee, an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 12.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

(a) a statement that the Person making such certificate or opinion has read such covenant or condition;

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

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

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

Section 12.06. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

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Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.

No past, present or future director, officer, employee, incorporator, agent or stockholder of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. No past, present or future director, officer, employee, incorporator, agent or stockholder of any of the Guarantors or any of their respective Affiliates, if any, as such, shall have any liability for any obligations of the Guarantors under the Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes and Guarantees by accepting a Note and a Guarantee waives and releases all such liabilities. The waiver and release are part of the consideration for issuance of the Notes and the Guarantees.

Section 12.08. Judgment Currency.

(a) If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due under this Indenture or the Notes in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Trustee could purchase the Original Currency with the Other Currency on the Business Day preceding the day on which final judgment is given or, if permitted by applicable law, on the day on which the judgment is paid or satisfied.

(b) The obligations of the Company and the Guarantors in respect of any sum due in the Original Currency under this Indenture or the Notes shall, notwithstanding any judgment in any Other Currency, be discharged only to the extent that on the Business Day following receipt by the Trustee of any sum adjudged to be so due in the Other Currency, the Trustee may, in accordance with normal banking procedures, purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due in the Original Currency, the Company and the Guarantors agree, to the fullest extent permitted by law, as a separate obligation and notwithstanding the judgment, to indemnify the Trustee and each Holder against any loss.

Section 12.09. Payment of Additional Amounts.

(a) All payments made by the Company or any Guarantor under or with respect to the Notes or the Guarantees will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, interest, assessment or other governmental charge imposed or levied by or on behalf of the Government of Canada or any province or territory thereof or by any authority or agency therein or thereof having power to tax (“Taxes”), unless the Company or such Guarantor is required to withhold or deduct Taxes under Canadian law or by the interpretation or administration thereof. If, after the Issue Date, the Company or any Guarantor is so required to withhold or deduct any amount for or on account of Taxes from any payment made under or with the respect to the Notes or the Guarantees, the Company or the Guarantor, as the case may be, shall pay as additional interest to each Holder of Notes that are outstanding on the date of the required payments, such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by such Holder (including the Additional Amounts) after all required withholdings or deductions is not less than the amount such Holder would have received if such Taxes had not been withheld or deducted; provided that no Additional Amounts will be payable with respect to a payment made in respect of a beneficial owner of a Note:

(i) with which the Company or any Guarantor does not deal at “arm’s length” (as defined for purposes of the Income Tax Act (Canada)) at the time of making such payment;

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(ii) that is subject to such Taxes by reason of its being connected with Canada or any province or territory thereof otherwise than by the mere holding of the Notes or the receipt of payments thereunder;

(iii) that failed to comply with a reasonable and timely request of the Company to provide information concerning such beneficial owner’s nationality, residence, identity or connection with Canada or any political subdivision or authority thereof, if and to the extent that due and timely compliance with such request would have reduced or eliminated any Taxes with respect to which Additional Amounts would have otherwise been payable in respect of such beneficial owner but for this clause; provided, that no request will be considered timely if delivered less than 60 days prior to the date on which the Company was required to receive such information in order to reduce or eliminate such Taxes; or

(iv) any combination of the above clauses in this proviso (an “Excluded Holder”).

(b) The Company or any Guarantor will also:

(i) make all required withholdings or deductions; and

(ii) remit the full amount deducted or withheld to the relevant authority in accordance with applicable law.

(c) The Company will furnish, within 30 days after the date the payment of any Taxes is due pursuant to applicable law, to the Holders of Notes that are outstanding on the date of the required payment, copies of tax receipts, if any, evidencing that all required withholdings or deductions have been made by the Company or any Guarantor, as the case may be.

(d) The Company or the Guarantor, as the case may be, will indemnify and hold harmless each Holder of Notes that are outstanding on the date of the required payment (other than an Excluded Holder) and upon written request reimburse each such Holder for the amount of:

(i) any Taxes so levied or imposed and paid by such Holder as a result of payments made under or with respect to the Notes or the Guarantee;

(ii) any liability (including, without limitation, penalties, interest and expense) arising therefrom or with respect thereto;

(iii) any expenses incurred by the Holder in connection with the payment of any Taxes by such Holder that were levied or imposed as a result of payments made under or with respect to the Notes or the Guarantee; and

(iv) any Taxes imposed with respect to any reimbursement under clause (i), (ii) or (iii) above, but excluding any such Taxes on such Holder’s net income.

(e) At least 30 days prior to each date on which any payment under or with respect to the Notes or the Guarantees is due and payable, if the Company or any Guarantor becomes obligated to pay Additional Amounts with respect to such payment, the Company or such Guarantor, as applicable, will deliver to the Trustee an Officers’ Certificate stating that such Additional Amounts will be payable, the amount so payable and such other information as is necessary to enable the Trustee to pay such Additional Amounts to the Holders of the Notes on the payment date.

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(f) Whenever in this Indenture there is mentioned, in any context:

(i) the payment of principal (and premium, if any);

(ii) purchase prices in connection with a repurchase of Notes;

(iii) interest to be paid on the Notes (including Additional Interest, if any); or

(iv) any other amount payable on or with respect to any of the Notes or the Guarantees

such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this section to the extent, that, in such context, Additional Amounts are, were or would be payable in respect thereof.

Section 12.10. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

THE VALIDITY AND INTERPRETATION OF THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HERETO AGREES TO SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE GUARANTEES, IF ANY, AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS IN RESPECT OF SUCH SUIT OR ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES AND THE GUARANTEES. EACH OF THE TRUSTEE, THE COMPANY AND ANY GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. The Company and each Guarantor hereby irrevocably appoints CT Corporation System (the “Process Agent”), with an office on the date hereof at 111 Eighth Avenue, New York, New York 10011, U.S.A., as its agent to receive on its behalf service of copies of the summons and complaint and any other process which may be served in any action or proceeding between the parties hereto or any holder and arising out of the Indenture, Collateral Agreements, Registration Rights Agreement, Notes or Guarantees brought in any New York state or federal court. Such service may be made by mailing by certified mail or delivering a copy of such process to the Company or any Guarantor, in care of the Process Agent at the address specified above for the Process Agent, and the Company and each Guarantor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. The Company and each Guarantor also irrevocably consents to such service upon it by the mailing by certified mail of copies thereof by U.S. air mail to its address set forth in Section 12.02. Nothing herein shall affect the right of the Trustee or any Holder of the Notes to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Company or any Guarantor in any other jurisdiction.

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Section 12.11. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 12.12. Successors.

All agreements of the Company and any Guarantor in this Indenture and the Notes and Guarantees shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 12.13. Severability.

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

Section 12.14. Counterpart Originals.

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

Section 12.15. Table of Contents, Headings, Etc.

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture, which have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 12.16. Qualification of Indenture.

The Company shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees for the Company, the Trustee and the Holders) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Company any such Officers’ Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

ARTICLE XIII

COLLATERAL

Section 13.01. Grant of Security Interest.

(a) To secure the due and punctual payment of the principal of, premium, if any, and interest, or Additional Interest, if any, on the Notes and all other Obligations due hereunder and under the Guarantees and the Collateral Agreements when and as the same shall be due and payable, whether on an interest payment date, by acceleration, purchase, repurchase, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest (to the extent permitted by law), if any, on the Notes and the performance of all other obligations of the Company and the Guarantors to the Holders, any

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Agent or the Trustee under this Indenture, the Collateral Agreements, the Guarantees and the Notes, the Company and the Guarantors hereby covenant to cause the Collateral Agreements to be executed and delivered concurrently with this Indenture. The Collateral Agreements shall provide for the grant by the Company and Guarantors party thereto to the Trustee or a Sub-Collateral Agent of a security interest in the Collateral pursuant to the applicable Collateral Agreements.

(b) Each Holder, by its acceptance of a Note, consents and agrees to the terms of each Collateral Agreement and the Intercreditor Agreement, as the same may be in effect or may be amended from time to time in accordance with their respective terms, and authorizes and directs each of the Trustee or a Sub-Collateral Agent, as applicable, to enter into this Indenture, the Collateral Agreements and the Intercreditor Agreement and to perform its obligations and exercise its rights thereunder in accordance therewith. The Company shall, and shall cause each Guarantor to, do or cause to be done, at its sole cost and expense, all such actions and things as may be necessary or proper, or as may be required by the provisions of the Collateral Agreements, to assure and confirm to the Trustee or a Sub-Collateral Agent, as applicable, the security interests in the Collateral contemplated hereby and by the Collateral Agreements, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes, Guarantees and Collateral Agreements secured thereby, according to the intent and purpose herein and therein expressed and subject to the Intercreditor Agreement. The Company shall, and shall cause each Guarantor to, take any and all actions required or as may reasonably be requested by the Trustee or a Sub-Collateral Agent, as applicable, to cause the Collateral Agreements to create and maintain, as security for the Obligations contained in this Indenture, the Notes, the Collateral Agreements and the Guarantees valid and enforceable, perfected (except as expressly provided herein or therein) security interests in and on all the Collateral, in favor of the Trustee or a Sub-Collateral Agent, superior to and prior to the rights of all third Persons other than as set forth herein and in the Intercreditor Agreement, and subject to no other Liens, in each case, except as expressly provided herein or therein.

Section 13.02. Recording and Opinions.

(a) The Company shall, and shall cause each Guarantor to, at its sole cost and expense, take or cause to be taken all action required to perfect, maintain, preserve and protect the security interests in the Collateral granted by the Collateral Agreements, including (i) the filing or registration of financing statements, continuation statements, collateral assignments and any instruments of further assurance, in such manner and in such places as required by law to preserve and protect fully the rights of the Holders, any Sub-Collateral Agent and the Trustee under this Indenture and the Collateral Agreements to all property comprising the Collateral, and (ii) to the extent not delivered to the Collateral Agent pursuant to the terms of the Intercreditor Agreement, the delivery of the certificates evidencing the securities pledged under any Collateral Agreement, duly endorsed in blank to the Collateral Agent (or, upon payment in full of Indebtedness under the Credit Agreement, the Trustee), it being understood that concurrently with the execution of this Indenture financing statements shall have been filed or registered or the Company and the Guarantors, to the extent required under applicable personal property security laws, shall have delivered financing statements for filing by the Initial Purchaser or its agents. The Company shall from time to time promptly pay all financing and continuation statement recording and/or filing fees, charges and recording and similar taxes relating to this Indenture, the Collateral Agreements and any amendments hereto or thereto and any other instruments of further assurance required pursuant hereto or thereto.

(b) The Company shall furnish to the Trustee, at such time as required by TIA Section 314(b) and, as reasonably requested by the Trustee, promptly after the execution and delivery of any other instrument of further assurance or amendment granting, perfecting, protecting, preserving or making effective a security interest pursuant to any Collateral Agreement, an Opinion of Counsel either (i) stating that, in the opinion of such counsel, this Indenture and the Collateral Agreements, financing statements

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and fixture filings, if applicable, then executed and delivered, as applicable, and all other instruments of further assurance or amendment then executed and delivered have been properly recorded, registered and filed, and to the extent not delivered to the Collateral Agent pursuant to the terms of the Intercreditor Agreement, all certificates evidencing securities pledged to the Trustee for the benefit of itself and the Holders under any Collateral Agreement have been delivered and duly endorsed in blank, to the extent necessary to perfect the security interests created by this Indenture and the Collateral Agreements and reciting the details of such action or referring to prior Opinions of Counsel in which such details are given, and stating that as to such Collateral Agreements and such other instruments, such recording, registering, filing and delivery are the only recordings, registerings, filings and deliveries necessary to perfect such security interest and that no re-recordings, re-registerings, re-filings or re-deliveries are necessary to maintain such perfection, and further stating that all financing statements and continuation statements have been executed and filed, and to the extent not delivered to the Collateral Agent pursuant to the terms of the Intercreditor Agreement all such certificates have been delivered, that are necessary fully to preserve and protect the rights of and perfect such security interests of the Trustee for the benefit of itself and the Holders, under the Collateral Agreements or (ii) stating that, in the Opinion of such Counsel, no other action is necessary to perfect any security interest created under this Indenture, the Notes or any of the Collateral Agreements as intended by this Indenture, the Notes or any such Collateral Agreement.

Section 13.03. Release of Collateral.

(a) Neither the Trustee nor any Sub-Collateral Agent shall at any time release Collateral from the security interests created by the Collateral Agreements unless such release is in accordance with the provisions of this Indenture and the applicable Collateral Agreements or the Intercreditor Agreement.

(b) Subject to the Intercreditor Agreement, at any time when a Default or an Event of Default shall have occurred and be continuing, no release of Collateral pursuant to the provisions of this Indenture and the Collateral Agreements shall be effective as against the Holders.

(c) The release of any Collateral from the terms of the Collateral Agreements shall not be deemed to impair the security on all remaining Collateral under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to this Indenture and the Collateral Agreements or the Intercreditor Agreement. To the extent applicable, the Company shall cause TIA Section 314(d) relating to the release of property from the security interests created by this Indenture and the Collateral Agreements to be complied with. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer of the Company, except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care. A Person is “independent” if such Person (a) is in fact independent, (b) does not have any direct financial interest or any material indirect financial interest in the Company or in any Affiliate of the Company and (c) is not an officer, employee, promoter, underwriter, trustee, partner or director or person performing similar functions to any of the foregoing for the Company. The Trustee and each Sub-Collateral Agent shall be entitled to receive and rely upon a certificate provided by any such Person confirming that such Person is independent within the foregoing definition.

(d) Notwithstanding any provision to the contrary herein, Collateral comprised of accounts receivable, inventory or (provided that an Event of Default shall not have occurred and be continuing) the proceeds of the foregoing shall be subject to release upon sales of such inventory and collection of the proceeds of such accounts receivable in the ordinary course of business. Such release shall occur automatically upon the occurrence of such events, but if requested in writing by the Company, the Trustee shall (and shall instruct each applicable Sub-Collateral Agent to) execute and deliver such documents,

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instruments and statements and take all such other actions promptly upon receipt of such instructions as the Company may reasonably request to evidence or confirm that the Collateral falling under this Section 13.03 has been released from the Liens of all applicable Collateral Agreements.

Section 13.04. Specified Releases of Collateral.

Subject to Section 13.03, Collateral may be released from the Lien and security interest created by the Collateral Agreements at any time or from time to time in accordance with the provisions of the Collateral Agreements and the Intercreditor Agreement, or as provided hereby. Upon the request of the Company pursuant to an Officers’ Certificate and an Opinion of Counsel certifying that all conditions precedent hereunder have been met and without the consent of any Holder, the Company and the Guarantors will be entitled to releases of assets included in the Collateral from the Liens securing the obligations under the Notes and the Guarantees under any one or more of the following circumstances:

(1) to enable the Company (or a Guarantor) to consummate asset dispositions permitted or not prohibited under Section 4.10;

(2) if any Subsidiary that is a Guarantor is released from its Guarantee in accordance with the terms of this Indenture, such Subsidiary’s assets will also be released;

(3) if the Company exercises its legal defeasance option or covenant defeasance option as described above under Section 8.01;

(4) upon satisfaction and discharge of this Indenture in accordance with Section 11.01 or payment in full in cash of the principal of and premium, if any, accrued and unpaid interest and Additional Interest, if any, on the Notes and all other Obligations under this Indenture, the Notes, the Collateral Agreements, the Guarantees and the Intercreditor Agreement that are then due and payable; or

(5) as required pursuant to the terms of the Intercreditor Agreement.

Upon receipt of such Officers’ Certificate and such Opinion of Counsel and any necessary or proper instruments of termination, satisfaction or release prepared by the Company, the Trustee and each applicable Sub-Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Collateral Agreements and the Intercreditor Agreement.

Section 13.05. Release upon Satisfaction or Defeasance of All Outstanding Obligations.

The Liens on, and pledges of, all Collateral will also be terminated and released upon (i) payment in full of the principal of, premium, if any, on, accrued and unpaid interest and Additional Interest, if any, on the Notes and all other Obligations hereunder, the Guarantees and the Collateral Agreements that are due and payable at or prior to the time such principal, premium, if any, accrued and unpaid interest and Additional Interest, if any, are paid, (ii) a satisfaction and discharge of this Indenture as described above under Section 11.01 or (iii) the occurrence of a Legal Defeasance or Covenant Defeasance as described above under Section 8.01.

Section 13.06. Form and Sufficiency of Release.

In the event that the Company or any Guarantor has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that may be sold,

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exchanged or otherwise disposed of by the Company or such Guarantor, and the Company or such Guarantor requests in writing the Trustee or the applicable Sub-Collateral Agent to furnish a written disclaimer, release or quit-claim of any interest in such property under this Indenture, the Intercreditor Agreement and the Collateral Agreements, the Trustee or the applicable Sub-Collateral Agent shall execute, acknowledge and deliver to the Company or such Guarantor (in proper form prepared by the Company or such Guarantor) such an instrument promptly after satisfaction of the conditions set forth herein for delivery of any such release. Notwithstanding the preceding sentence, all purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Trustee or the applicable Sub-Collateral Agent hereunder as sufficient for the purpose of this Indenture and as constituting a good and valid release of the property therein described from the Lien of this Indenture and of the Collateral Agreements.

Section 13.07. Purchaser Protected.

No purchaser or grantee of any property or rights purporting to be released herefrom shall be bound to ascertain the authority of the Trustee or the Sub-Collateral Agent to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Indenture, the Collateral Agreements or the Intercreditor Agreement to be sold or otherwise disposed of by the Company or any Guarantor be under any obligation to ascertain or inquire into the authority of the Company or any Guarantor to make such sale or other disposition.

Section 13.08. Authorization of Actions To Be Taken by the Trustee and each Sub-Collateral Agent Under the Collateral Agreements.

Subject to the provisions of this Indenture, the applicable Collateral Agreements and the Intercreditor Agreement, each Holder, by acceptance of its Note(s) agrees that (a) the Trustee or a Sub-Collateral Agent, if applicable, shall execute and deliver the Collateral Agreements and the Intercreditor Agreement, and any amendments thereto, and act in accordance with the terms thereof, (b) the Trustee or such Sub-Collateral Agent may, in its sole discretion and without the consent of the Trustee or the Holders, take all actions it deems necessary or appropriate in order to (i) enforce any of the terms of the Collateral Agreements or the Intercreditor Agreement and (ii) collect and receive any and all amounts payable in respect of the Obligations of the Company and the Guarantors hereunder and under the Notes, the Guarantees, the Intercreditor Agreement and the Collateral Agreements and (c) the Trustee or such Sub-Collateral Agent shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any act that may be unlawful or in violation of the Collateral Agreements, the Intercreditor Agreement or this Indenture, and suits and proceedings as the Trustee or such Sub-Collateral Agent may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest thereunder or be prejudicial to the interests of the Holders). Notwithstanding the foregoing, the Trustee or such Sub-Collateral Agent, as the case may be, may, at the expense of the Company, request the direction of the Holders with respect to any such actions and upon receipt of the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes, shall take such actions; provided that all actions so taken shall, at all times, be in conformity with the requirements of the Intercreditor Agreement.

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Section 13.09. Authorization of Receipt of Funds by the Trustee Under the Collateral Agreements.

Each Sub-Collateral Agent is authorized to receive any funds for the benefit of itself, the Trustee and the Holders distributed under the Collateral Agreements and the Intercreditor Agreement and to the extent not prohibited under the Intercreditor Agreement, for turnover to the Trustee to make further distributions of such funds to itself, the Trustee and the Holders in accordance with the provisions of Section 6.10 and the other provisions of this Indenture.

Section 13.10. Intercreditor Agreement.

This Article XIII and the Collateral Agreements are subject to the terms, limitations and conditions set forth in the Intercreditor Agreement.

[SIGNATURES ON FOLLOWING PAGE]

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SIGNATURES

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

COMPANY:
NORTH AMERICAN ENERGY PARTNERS INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President, Finance
GUARANTORS:
NORTH AMERICAN CONSTRUCTION GROUP INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President, Finance
NORTH AMERICAN CAISSON LTD.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN CONSTRUCTION LTD.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN ENGINEERING INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President

Indenture

NORTH AMERICAN ENTERPRISES LTD.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN INDUSTRIES INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN MAINTENANCE LTD.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN MINING INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN PIPELINE INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN ROAD INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President

Indenture

NORTH AMERICAN SERVICES INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN SITE DEVELOPMENT LTD.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NORTH AMERICAN SITE SERVICES INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
GRIFFITHS PILE DRIVING INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President
NACG FINANCE LLC
By:	/s/ Chris Hayman
Name:	Chris Hayman
Title:	Secretary

Indenture

TRUSTEE:
WELLS FARGO BANK, N.A., as Trustee
By:	/s/ Melissa Scott
Name:	Melissa Scott
Title:	Vice President

Indenture

EXHIBIT A

FORM OF SERIES A NOTE

(Face of Note)

NORTH AMERICAN ENERGY PARTNERS INC.

9% SENIOR SECURED NOTE DUE 2010

[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATIONS UNDER

¹ To be included only if the Note is issued in global form.

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THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144(K) (OR ANY SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR ANY PREDECESSOR OF THIS NOTE) AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY OTHER JURISDICTION, INCLUDING ANY STATE OF THE UNITED STATES, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR TRANSFER AGENT’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

The following legend is prescribed by applicable Canadian securities legislation and applies to trades in this Note involving persons in Canada:

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (1) MAY 19, 2005 AND (2) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.

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NORTH AMERICAN ENERGY PARTNERS INC.

9% SENIOR SECURED NOTE DUE 2010

CUSIP No. [            ]

No. [    ] US$                                         

Interest Payment Dates: June 1 and December 1, commencing December 1, 2005 Record Dates: May 15 and November 15.

NORTH AMERICAN ENERGY PARTNERS INC., a Canadian federal corporation (the “Company,” which term includes any successor corporation under the indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or registered assigns, the principal sum of US$                     on June 1, 2010.

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefits under the Indenture referred to on the reverse hereof or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

Dated:

NORTH AMERICAN ENERGY PARTNERS INC.

By:

Name:

Title:

By:

Name:

Title:

This is one of the Notes referred to in the within-mentioned Indenture:

WELLS FARGO BANK, N.A., as Trustee
By:
	Authorized Signatory

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(Back of Series A Note)

9% Senior Secured Notes due 2010

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest. The Company promises to pay interest on the principal amount of this Note at the rate of 9% per annum from the date of original issuance until maturity and shall pay Additional Interest, if any, pursuant to the registration rights agreement referred below. The Company shall pay interest and Additional Interest, if any, semi-annually on June 1, and December 1 of each year, commencing December 1, 2005, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be December 1, 2005. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue payments of the principal, Purchase Price and Redemption Price at the rate stated above; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any (without regard to any applicable grace periods), hereon at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. For purposes of the Interest Act (Canada), (i) the yearly rate of interest which is equivalent to the rate of interest for any period of less than one year is the rate of interest for such period multiplied by a fraction, the numerator of which is the actual number of days in the 12-month period commencing on the first day of such period and the denominator of which is the actual number of days elapsed in such period, (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation in respect of this Note and (iii) the rates of interest stipulated in respect of this Note are intended to be nominal rates and not effective rates or yields.

2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest as provided below) and Additional Interest, if any, to the Persons who are Holders of Notes at the close of business on the May 15 and November 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, Redemption Price, Purchase Price, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal, Redemption Price and Purchase Price of, and interest and Additional Interest (if any) on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Trustee or the Paying Agent at least five days before the relevant payment date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

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3. Paying Agent and Registrar. Initially, Wells Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. Indenture; Guarantee. The Company initially issued US$60,481,000 in aggregate principal amount of the Notes under an Indenture dated as of May 19, 2005 (the “Indenture”) by and among the Company, the Guarantors party thereto from time to time and the Trustee. The Company may issue Additional Notes under the Indenture from time to time, subject to limitations set forth in the Indenture. The terms of the Notes include those stated in the Indenture, as amended or supplemented from time to time, and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.C. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, such provisions of the Indenture shall govern and be controlling. The Notes are general obligations of the Company.

To guarantee the due and punctual payment of the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, each Guarantor and each future Restricted Subsidiary (other than Immaterial Subsidiaries) will unconditionally guarantee, jointly and severally, such obligations pursuant to the terms of the Indenture. Each Guarantee will be subject to release as provided in the Indenture.

5. Optional Redemption. Beginning on June 1, 2008, the Company may redeem the Notes at its option, in whole or in part, during any period set forth below at the redemption price (expressed as percentages of the principal amount thereof) set forth opposite such period:

Year	Percentage
On or after June 1, 2008 and prior to May 1, 2009	104.50	%
On or after June 15, 2009 and prior to May 1, 2010	102.25	%
On June 1, 2010	100.00	%

In addition, the Company must pay accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed as described in the Indenture.

6. Optional Redemption Upon Public Equity Offering. At any time, or from time to time, on or prior to June 1, 2007, the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings to redeem up to 35% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued under the Indenture (a

A-6

“Special Redemption”) at a redemption price of 109% of the principal amount thereof plus accrued and unpaid interest (including Additional Interest, if any) thereon, if any, to the Redemption Date; provided that (1) at least 65% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued under the Indenture remains outstanding immediately after any such Special Redemption, and (2) the Company makes such Special Redemption not more than 90 days after the consummation of any such Public Equity Offering.

7. Mandatory Redemption. Except as set forth in Paragraph 10 below with respect to repurchases of Notes in certain events, the Company shall not be required to make mandatory redemption or repurchase payments with respect to the Notes.

8. Redemption for Taxation Reasons. The Company may at any time redeem in whole but not in part the outstanding Notes at a redemption price of 100% of the principal amount thereof plus accrued interest (including Additional Interest, if any) and Additional Amounts to the Redemption Date if the Company has become or would become obligated to pay any Additional Amounts in respect of the Notes or the Guarantees as a result of: (a) any change in or amendment to the laws (or regulations promulgated thereunder) of Canada (or any political subdivision or taxing authority thereof or therein), or (b) any change in or amendment to any published administrative position regarding the application, or any change in the judicial interpretation, of such laws or regulations, which change or amendment is announced or is effective on or after the Issue Date, and such obligation to pay Additional Amounts cannot be avoided by the Company or such Guarantor taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company or such Guarantor would be obliged to pay Additional Amounts were a payment in respect of such Notes then due and payable. Prior to the distribution of any notice of redemption pursuant to Section 3.09 of the Indenture, the Company shall deliver to the Trustee an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an Opinion of Counsel reasonably acceptable to the Trustee to the effect that the Company or any Guarantor, as the case may be, has or will become obligated to pay Additional Amounts as a result of such change or amendment.

9. Selection and Notice of Redemption. Subject to the provisions of the Indenture, a notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than US$1,000 may be redeemed in part but only in whole multiples of US$1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption.

If less than all of the Notes are to be redeemed, the Trustee shall select the Notes or portions thereof to be redeemed (a) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or (b) if the Notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

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10. Mandatory Offers to Repurchase.

(a) Change of Control Offer. Upon the occurrence of a Change of Control (unless the Company has exercised its right to redeem the Notes as described in paragraph 5 or paragraph 8 above and in the Indenture), the Company shall be required to make an offer to repurchase all or any part (equal to US$1,000 or an integral multiple thereof) of each Holder’s Notes at a Purchase Price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase, in accordance with the procedures set forth in the Indenture.

(b) Net Proceeds Offer. Upon certain Asset Sales, the Company may be required to utilize a portion of the net proceeds received from such Asset Sale to offer to repurchase Notes from the Holders at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase, in accordance with the provisions of the Indenture.

11. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of US$1,000 and integral multiples of US$1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

12. Persons Deemed Owners. The registered Holder of a Note shall be treated as its owner for all purposes, and neither the Company, the Trustee nor any Agent shall be affected by any notice to the contrary.

13. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture and the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for the assumption of the Company’s obligations to Holders of the Notes pursuant to Article V of the Indenture, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not, in the opinion of the Trustee, adversely affect the legal rights under the Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement of any such Holder in any material respect, to comply with the Trust Indenture Act, to evidence or provide for a successor Trustee or additional Guarantors, to provide for uncertificated Notes in addition to or in place of certificated Notes, to release a Guarantor and the Liens granted by such Guarantor in favor of the Trustee as permitted by the Indenture or Guarantee, or if necessary, in connection with any addition or

A-8

release of Collateral permitted under the Indenture, the Intercreditor Agreement or the Collateral Agreements. In formulating its opinion on such matters, the Trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel.

14. Defaults and Remedies. If an Event of Default (other than certain events of bankruptcy or insolvency) shall occur and be continuing, the Trustee or the Holders of at least twenty-five percent (25%) in principal amount of outstanding Notes may declare the unpaid principal of (and premium, if any) and accrued and unpaid interest and Additional Interest, if any, on all the Notes to be immediately due and payable by notice in writing to the Company and the Trustee specifying the Event of Default and that it is a “notice of acceleration.” Certain events of bankruptcy or insolvency are Events of Default which will result in the unpaid principal of (and premium, if any) and accrued and unpaid interest on all the Notes to become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. For a comprehensive list of the Defaults and Remedies in connection with these Notes, see Article VI of the Indenture.

Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with applicable law or the Indenture that the Trustee determines may be unduly prejudicial to the rights of the other Holders or that may subject the Trustee to personal liability. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in the payment of principal of or, premium, if any, or interest on any Note) if and so long as a committee of its Responsible Officers in good faith determines that withholding notice is in the interests of the Holders.

15. Trustee Dealings with Company. Subject to certain limitations, the Trustee under the Indenture, in its individual or any other capacity, may become owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates as if it were not Trustee.

16. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes and Guarantees by accepting a Note and a Guarantee waives and releases all such liabilities. The waiver and release are part of the consideration for issuance of the Notes and the Guarantees.

17. Authentication. This Note shall not be valid until authenticated by the signature of the Trustee or an authenticating agent.

A-9

18. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

19. Discharge Prior to Maturity. If the Company deposits with the Trustee or Paying Agent cash or U.S. Government Securities sufficient to pay the principal or Redemption Price of, and interest and Additional Interest, if any, on, the Notes to maturity or a specified Redemption Date and satisfies certain conditions specified in the Indenture, the Company and the Guarantors will be discharged from the Indenture, except for certain Sections thereof, or from their obligations to comply with certain Sections thereof.

20. Governing Law. The validity and interpretation of the Indenture, the Guarantees and this Note will be governed by and construed in accordance with the laws of the state of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. Each party hereto agrees to submit to the jurisdiction of any New York state court sitting in the Borough of Manhattan in the City of New York or any federal court sitting in the Borough of Manhattan in the City of New York in respect of any suit, action or proceeding arising out of or relating to the Indenture, the Guarantees, if any, and the Notes, and irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts in respect of such suit or action or proceeding arising out of or relating to the Indenture, the Notes and the Guarantees. Each of the Trustee, the Company and any Guarantor irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury and any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

21. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption or repurchase as a convenience to Holders. No representation is made as to the correctness or accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption or repurchase and reliance may be placed only on the other identification numbers placed thereon.

22. Registration Rights. Pursuant to a Registration Rights Agreement, dated as of May 19, 2005, among the Company, the Guarantors and the Initial Purchaser, the Company will be obligated upon the occurrence of certain events to consummate an exchange offer pursuant to which the Holder of this Note shall have the right to exchange this Note for a Note which has been registered under the Securities Act, evidencing the same continuing debt, in like principal amount and having terms identical in all material respects as this Note. The Holders shall be entitled to receive certain Additional Interest in the event such exchange offer is not consummated and upon certain other conditions, all pursuant to and in accordance with the terms of such registration rights agreement.

A-10

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Request may be made to:

North American Energy Partners Inc.

Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5A7

Facsimile: (780) 960-7103

Attention: Vincent Gallant

A-11

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name address and zip code)

and irrevocably appoint                                                                                                                                     agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee:
	(Participant in recognized signature guarantee medallion program)

A-12

OPTION OF HOLDER TO ELECT PURCHASE

If you wish to elect to have all or any portion of this Note purchased by the Company pursuant to Section 4.10 (“Net Proceeds Offer”) or Section 4.15 (“Change of Control Offer”) of the Indenture, check the applicable boxes

¨  Net Proceeds Offer:	¨  Change of Control Offer:
in whole ¨	in whole ¨
in part     ¨	in part     ¨
Amount to be purchased: US$	Amount to be purchased: US$

Dated:	Signature:
		(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:
	(Participant in recognized signature guarantee medallion program)

Social Security Number or

Taxpayer Identification Number:                                                                                                                   

A-13

SCHEDULE OF EXCHANGES OF NOTES

The following exchanges of a part of this Global Note for Certificated Notes or a part of another Global Note have been made:

Date of Exchange Amount of decrease in principal amount of this Global Note Amount of increase in principal amount of this Global Note Principal amount of this Global Note following such decrease (or increase) Signature of authorized officer of Trustee

A-14

EXHIBIT B

FORM OF SERIES B NOTE

(Face of Note)

NORTH AMERICAN ENERGY PARTNERS INC.

9% SENIOR SECURED NOTE DUE 2010

[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]²

The following legend is prescribed by applicable Canadian securities legislation and applies to trades in this Note involving persons in Canada:

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (1) MAY 19, 2005 AND (2) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.

² To be included only if the Note is issued in global form.

B-1

NORTH AMERICAN ENERGY PARTNERS INC.

9% SENIOR SECURED NOTE DUE 2010

CUSIP No. [            ]

No.              US$                        

Interest Payment Dates: June 1 and December 1, commencing December 1, 2005 Record Dates: May 15 and November 15.

NORTH AMERICAN ENERGY PARTNERS INC., a Canadian federal corporation (the “Company,” which term includes any successor corporation under the indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or registered assigns, the principal sum of US$                     on June 1, 2010.

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefits under the Indenture referred to on the reverse hereof or be valid or obligatory for any purpose.

B-2

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

Dated:

NORTH AMERICAN ENERGY PARTNERS INC.

By:

Name:

Title:

By:

Name:

Title:

This is one of the Notes referred to in the within-mentioned Indenture:

WELLS FARGO BANK, N.A.,
as Trustee
By:
	Authorized Signatory

B-3

(Back of Series B Note)

9% Senior Secured Notes due 2010

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest. The Company promises to pay interest on the principal amount of this Note at the rate of 9% per annum from the date of original issuance until maturity and shall pay Additional Interest, if any, pursuant to the registration rights agreement referred below. The Company shall pay interest and Additional Interest, if any, semi-annually on June 1 and December 1 of each year, commencing December 1, 2005, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be December 1, 2005. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue payments of the principal, Purchase Price and Redemption Price at the rate stated above; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest, if any (without regard to any applicable grace periods), hereon at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. For purposes of the Interest Act (Canada), (i) the yearly rate of interest which is equivalent to the rate of interest for any period of less than one year is the rate of interest for such period multiplied by a fraction, the numerator of which is the actual number of days in the 12-month period commencing on the first day of such period and the denominator of which is the actual number of days elapsed in such period, (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation in respect of this Note and (iii) the rates of interest stipulated in respect of this Note are intended to be nominal rates and not effective rates or yields.

2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest as provided below) and Additional Interest, if any, to the Persons who are Holders of Notes at the close of business on the May 15 and November 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, Redemption Price, Purchase Price, interest and Additional Interest, if any, at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal, Redemption Price and Purchase Price of, and interest and Additional Interest (if any) on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Trustee or the Paying Agent at least five days before the relevant payment date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

B-4

3. Paying Agent and Registrar. Initially, Wells Fargo Bank, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. Indenture; Guarantee. The Company initially issued US$60,481,000 in aggregate principal amount of the Notes under an Indenture dated as of May 19, 2005 (the “Indenture”) by and among the Company, the Guarantors party thereto from time to time and the Trustee. The Company may issue Additional Notes under the Indenture from time to time, subject to limitations set forth in the Indenture. The terms of the Notes include those stated in the Indenture, as amended or supplemented from time to time, and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.C. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, such provisions of the Indenture shall govern and be controlling. The Notes are general obligations of the Company.

To guarantee the due and punctual payment of the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, each Guarantor and each future Restricted Subsidiary (other than Immaterial Subsidiaries) will unconditionally guarantee, jointly and severally, such obligations pursuant to the terms of the Indenture. Each Guarantee will be subject to release as provided in the Indenture.

5. Optional Redemption. Beginning on June 1, 2008, the Company may redeem the Notes at its option, in whole or in part, during any period set forth below at the redemption price (expressed as percentages of the principal amount thereof) set forth opposite such period:

Year	Percentage
On or after June 1, 2008 and prior to June 1, 2009	104.50	%
On or after June 1, 2009 and prior to June 1, 2010	102.25	%
On June 1, 2010	100.00	%

In addition, the Company must pay accrued and unpaid interest and Additional Interest, if any, on the Notes redeemed as described in the Indenture.

6. Optional Redemption Upon Public Equity Offering. At any time, or from time to time, on or prior to June 1, 2007, the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings to redeem up to 35% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued under the Indenture (a

B-5

“Special Redemption”) at a redemption price of 109% of the principal amount thereof plus accrued and unpaid interest (including Additional Interest, if any) thereon, if any, to the Redemption Date; provided that (1) at least 65% of the aggregate principal amount of the Notes (which includes Additional Notes, if any) issued under the Indenture remains outstanding immediately after any such Special Redemption, and (2) the Company makes such Special Redemption not more than 90 days after the consummation of any such Public Equity Offering.

7. Mandatory Redemption. Except as set forth in Paragraph 10 below with respect to repurchases of Notes in certain events, the Company shall not be required to make mandatory redemption or repurchase payments with respect to the Notes.

8. Redemption for Taxation Reasons. The Company may at any time redeem in whole but not in part the outstanding Notes at a redemption price of 100% of the principal amount thereof plus accrued interest (including Additional Interest, if any) and Additional Amounts to the Redemption Date if the Company has become or would become obligated to pay any Additional Amounts in respect of the Notes or the Guarantees as a result of: (a) any change in or amendment to the laws (or regulations promulgated thereunder) of Canada (or any political subdivision or taxing authority thereof or therein), or (b) any change in or amendment to any published administrative position regarding the application, or any change in the judicial interpretation, of such laws or regulations, which change or amendment is announced or is effective on or after the Issue Date, and such obligation to pay Additional Amounts cannot be avoided by the Company or such Guarantor taking reasonable measures available to it; provided, however, that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Company or such Guarantor would be obliged to pay Additional Amounts were a payment in respect of such Notes then due and payable. Prior to the distribution of any notice of redemption pursuant to Section 3.09 of the Indenture, the Company shall deliver to the Trustee an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and an Opinion of Counsel reasonably acceptable to the Trustee to the effect that the Company or any Guarantor, as the case may be, has or will become obligated to pay Additional Amounts as a result of such change or amendment.

9. Selection and Notice of Redemption. Subject to the provisions of the Indenture, a notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than US$1,000 may be redeemed in part but only in whole multiples of US$1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption.

If less than all of the Notes are to be redeemed, the Trustee shall select the Notes or portions thereof to be redeemed (a) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or (b) if the Notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

B-6

10. Mandatory Offers to Repurchase.

(a) Change of Control Offer. Upon the occurrence of a Change of Control (unless the Company has exercised its right to redeem the Notes as described in paragraph 5 or paragraph 8 above and in the Indenture), the Company shall be required to make an offer to repurchase all or any part (equal to US$1,000 or an integral multiple thereof) of each Holder’s Notes at a Purchase Price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase, in accordance with the procedures set forth in the Indenture.

(b) Net Proceeds Offer. Upon certain Asset Sales, the Company may be required to utilize a portion of the net proceeds received from such Asset Sale to offer to repurchase Notes from the Holders at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase, in accordance with the provisions of the Indenture.

11. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of US$1,000 and integral multiples of US$1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

12. Persons Deemed Owners. The registered Holder of a Note shall be treated as its owner for all purposes, and neither the Company, the Trustee nor any Agent shall be affected by any notice to the contrary.

13. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture and the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for the assumption of the Company’s obligations to Holders of the Notes pursuant to Article V of the Indenture, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not, in the opinion of the Trustee, adversely affect the legal rights under the Indenture, the Notes, the Guarantees, the Collateral Agreements and the Intercreditor Agreement of any such Holder in any material respect, to comply with the Trust Indenture Act, to evidence or provide for a successor Trustee or additional Guarantors, to provide for uncertificated Notes in addition to or in place of certificated Notes, to release a Guarantor and the Liens granted by such Guarantor in favor of the Trustee as permitted by the Indenture or Guarantee, or if necessary, in connection with any addition or

B-7

release of Collateral permitted under the Indenture, the Intercreditor Agreement or the Collateral Agreements. In formulating its opinion on such matters, the Trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel.

14. Defaults and Remedies. If an Event of Default (other than certain events of bankruptcy or insolvency) shall occur and be continuing, the Trustee or the Holders of at least twenty-five percent (25%) in principal amount of outstanding Notes may declare the unpaid principal of (and premium, if any) and accrued and unpaid interest and Additional Interest, if any, on all the Notes to be immediately due and payable by notice in writing to the Company and the Trustee specifying the Event of Default and that it is a “notice of acceleration.” Certain events of bankruptcy or insolvency are Events of Default which will result in the unpaid principal of (and premium, if any) and accrued and unpaid interest on all the Notes to become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. For a comprehensive list of Defaults and Remedies in connection with these Notes, see Article IV of the Indenture.

Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with applicable law or the Indenture that the Trustee determines may be unduly prejudicial to the rights of the other Holders or that may subject the Trustee to personal liability. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in the payment of principal of or, premium, if any, or interest on any Note) if and so long as a committee of its Responsible Officers in good faith determines that withholding notice is in the interests of the Holders.

15. Trustee Dealings with Company. Subject to certain limitations, the Trustee under the Indenture, in its individual or any other capacity, may become owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates as if it were not Trustee.

16. No Recourse Against Others. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any of its Affiliates, as such, shall have any liability for any obligations of the Company or any of its Affiliates under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes and Guarantees by accepting a Note and a Guarantee waives and releases all such liabilities. The waiver and release are part of the consideration for issuance of the Notes and the Guarantees.

17. Authentication. This Note shall not be valid until authenticated by the signature of the Trustee or an authenticating agent.

B-8

18. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

19. Discharge Prior to Maturity. If the Company deposits with the Trustee or Paying Agent cash or U.S. Government Securities sufficient to pay the principal or Redemption Price of, and interest and Additional Interest, if any, on, the Notes to maturity or a specified Redemption Date and satisfies certain conditions specified in the Indenture, the Company and the Guarantors will be discharged from the Indenture, except for certain Sections thereof, or from their obligations to comply with certain Sections thereof.

20. Governing Law. The validity and interpretation of the Indenture, the Guarantees and this Note will be governed by and construed in accordance with the laws of the state of New York, but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. Each party hereto agrees to submit to the jurisdiction of any New York state court sitting in the Borough of Manhattan in the City of New York or any federal court sitting in the Borough of Manhattan in the City of New York in respect of any suit, action or proceeding arising out of or relating to the Indenture, the Guarantees, if any, and the Notes, and irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts in respect of such suit or action or proceeding arising out of or relating to the Indenture, the Notes and the Guarantees. Each of the Trustee, the Company and any Guarantor irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury and any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

21. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption or repurchase as a convenience to Holders. No representation is made as to the correctness or accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption or repurchase and reliance may be placed only on the other identification numbers placed thereon.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Request may be made to:

North American Energy Partners Inc.

Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5A7

Facsimile: (780) 960-7103

Attention: Vincent Gallant

B-9

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name address and zip code)

and irrevocably appoint                                                                                                                                     agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:                     

Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Signature Guarantee:
	(Participant in recognized signature guarantee medallion program)

B-10

OPTION OF HOLDER TO ELECT PURCHASE

If you wish to elect to have all or any portion of this Note purchased by the Company pursuant to Section 4.10 (“Net Proceeds Offer”) or Section 4.15 (“Change of Control Offer”) of the Indenture, check the applicable boxes

¨  Net Proceeds Offer:	¨  Change of Control Offer:
in whole    ¨	in whole    ¨
in part        ¨	in part       ¨
Amount to be purchased: US$	Amount to be purchased: US$

Dated:	Signature:
		(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:
	(Participant in recognized signature guarantee medallion program)

Social Security Number or

Taxpayer Identification Number:                                                                                                                   

B-11

SCHEDULE OF EXCHANGES OF NOTES

The following exchanges of a part of this Global Note for Certificated Notes or a part of another Global Note have been made:

Date of Exchange Amount of decrease in principal amount of this Global Note Amount of increase in principal amount of this Global Note Principal amount of this Global Note following such decrease (or increase) Signature of authorized officer of Trustee

B-12

EXHIBIT C

GUARANTEE

Each undersigned Guarantor hereby unconditionally guarantees (each, a “Guarantee”), on a senior secured basis and jointly and severally, to each Holder of a Note authenticated and delivered by the Trustee, that: (i) the principal of and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration, upon redemption, purchase pursuant to Article III of the Indenture or otherwise, and interest on the overdue principal, if any, and interest on any overdue installment of interest, to the extent lawful, on the Notes and all other obligations of the Company to the Holders hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at maturity, by acceleration, upon redemption, purchase pursuant to Article III of the Indenture or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.03 of the Indenture. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, the recovery of any judgment against the Company, and action to enforce the same or any other circumstance (other than performance) which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and in this Guarantee. If any Holder or the Trustee is required by any court or otherwise to return to the Company, any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article VI of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guarantee.

Capitalized terms used herein have the meanings given in the Indenture, dated May 19, 2005, among North American Energy Partners Inc., the Guarantors named therein and Wells Fargo Bank, N.A., as Trustee.

THE VALIDITY AND INTERPRETATION OF THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE

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STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE GUARANTOR HERETO AGREES TO SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE.

This Guarantee is subject to release upon the terms set forth in the Indenture.

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[GUARANTOR(S)]

By:

Name:

Title:

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EXHIBIT D(1)

FORM OF REGULATION S CERTIFICATE

                    ,             

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Re: North American Energy Partners Inc. (the “Company”)

9% Senior Secured Notes due 2010 (the “Notes”)

Ladies and Gentlemen:

This letter relates to US$                      principal amount at maturity of Notes represented by a certificate (the “Legended Certificate”) which bears a legend outlining restrictions upon transfer of such Legended Certificate. Pursuant to Section 2.01 of the Indenture (the “Indenture”) dated as of May 19, 2005 relating to the Notes, we hereby certify that we are (or we will hold such securities on behalf of) a person outside the United States to whom the Notes could be transferred in accordance with Rule 904 of Regulation S promulgated under the U.S. Securities Act of 1933, as amended.

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this letter have the meanings set forth in Regulation S.

Very truly yours,
[Name of Transferee]
By:
	Authorized Signature

D(1)-1

EXHIBIT D(2)

CERTIFICATE TO BE DELIVERED

UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES

                    ,             

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Re: North American Energy Partners Inc. (the “Company”)

9% Senior Secured Notes due 2010 (the “Notes”)

Ladies and Gentlemen:

This Certificate relates to US$                      principal amount of Notes held in

¨  book-entry* or  ¨ certificated form*

by                                                                                  (the “Transferor”).

The Transferor:*

¨  has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Note held by the Depositary a Note or Notes in certificated, registered form of authorized denominations in an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above); or

¨  has requested the Trustee by written order to exchange or register the transfer of a Note or Notes.

In connection with such request and in respect of each such Note, the Transferor does hereby certify that Transferor is familiar with the Indenture relating to the above captioned Notes and as provided in Section 2.06 of such Indenture, the transfer of this Note does not require registration under the Securities Act (as defined below) because:*

¨  Such Note is being acquired for the Transferor’s own account, without transfer.

¨  Such Note is being transferred to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) in reliance on Rule 144A and accordingly the undersigned does hereby certify that the Note is being transferred to a person that the transferor reasonably believes is purchasing the Note for its own account, or for one or

* Check applicable box or boxes.

D(2)-1

more accounts with respect to which such Person exercises sole investment discretion and the Notes have been transferred in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities law of any state of the United States.

¨  Such Note is being transferred to an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in accordance with Regulation D under the Securities Act.

¨  Such Note is being transferred pursuant to an exemption from registration in accordance with Regulation S under the Securities Act.

¨  Such Note is being transferred in accordance with Rule 144 under the Securities Act, or pursuant to an effective registration statement under the Securities Act.

¨  Such Note is being transferred (i) in reliance on and in compliance with an exemption from the registration requirements of the Securities Act, other than Rule 144A, 144 or Rule 904 under the Securities Act, and (ii) to the extent Canadian securities laws, regulations, instruments or rules are applicable, pursuant to an exemption from the prospectus and registration requirements of such laws, regulations, instruments or rules. An Opinion of Counsel to the effect that such transfer does not require registration under the Securities Act accompanies this Certificate.

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

	Very truly yours,
	[INSERT NAME OF TRANSFEROR]
	By:
	Name:
	Title:
Date:

D(2)-2

EXHIBIT E

FORM OF CERTIFICATE TO BE

DELIVERED IN CONNECTION WITH

TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                    ,             

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Re: North American Energy Partners Inc. (the “Company”)

9% Senior Secured Notes due 2010 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed purchase of 9% Senior Secured Notes due 2010 (the “Notes”) of the Company, we confirm that:

1. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture dated as of May 19, 2005 relating to the Notes (the “Indenture”) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”) and applicable Canadian securities laws, regulations, instruments and rules.

2. We understand that the Notes have not been registered and that a prospectus has not been filed under the Securities Act or any other applicable securities law, and that the Notes may not be offered, sold or otherwise transferred except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should offer, sell, transfer, pledge, hypothecate or otherwise dispose of any Notes, we will do so only (A) to the Company or any Subsidiary thereof, (B) inside the United States to a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act, (C) inside the United States to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes to you a signed letter substantially in the form of this letter, (D) outside the United States to a foreign person in compliance with Rule 904 of Regulation S under the Securities Act, and, if such person is a resident of Canada, pursuant to an exemption from the prospectus and registration requirements of applicable Canadian securities laws, regulations, instruments and rules, (E) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available), (F) in accordance with another exemption from the registration requirements of the Securities Act, or (G) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein and in the Indenture.

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3. We understand that, with respect to any proposed transfer of any Notes, pursuant to paragraphs 2(B), 2(C), 2(D) and 2(E) above, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed transfer complies with such restrictions and that with respect to any transfer in accordance with paragraph 2(F) we will be required to furnish to you and the Company such legal opinions and other information as you or the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. We further understand that the Notes purchased by us will bear a legend to such effect. We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act.

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are acquiring the Notes for investment purposes and not with a view to, or offer of sale in connection with, any distribution in violation of the Securities Act or the securities laws of any state of the United States or any other applicable jurisdiction, and we are each able to bear the economic risk of our or its investment.

5. We are acquiring the Notes purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

Very truly yours,
(Name of Transferee)
By:
	Authorized Signature

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EXHIBIT F

FORM OF CERTIFICATE TO BE DELIVERED

IN CONNECTION WITH TRANSFERS

PURSUANT TO REGULATION S

                    ,             

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Re: North American Energy Partners Inc. (the “Company”)

9% Senior Secured Notes due 2010 (the “Notes”)

Dear Sirs:

In connection with our proposed sale of $                     aggregate principal amount at maturity of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the Securities Act of 1933, as amended, and, accordingly, we represent that:

(1) the offer of the Notes was not made to a person in the United States;

(2) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States;

(3) no directed selling efforts have been made by us, any of our affiliates or any person acting on our behalf in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

(4) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act of 1933; and

(5) if we are a dealer or a person receiving a selling concession fee or other remuneration in respect of the Notes, and the proposed transfer takes place within 40 days of the Issue Date (as defined in the Indenture), or we are an officer or director of the Company or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with Rule 904(b) of Regulation S.

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You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this letter have the meanings set forth in Regulation S.

Very truly yours,
[Name of Transferor]
By:
	Authorized Signature

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EXHIBIT G

ESTOPPEL AND LEASE RECOGNITION AGREEMENT

TO:	BNP PARIBAS (CANADA) and its successors and assigns, as administrative agent (the “Administrative Agent”)
AND TO:	GE CANADA FINANCE HOLDING COMPANY and its successors and assigns, as collateral agent (the “Collateral Agent”)
AND TO:	Wells Fargo Bank, N.A., and its successors and assigns, as trustee and agent (the “Trustee”)
AND TO:	The Swap Lenders, as defined in the Credit Agreement
FROM:	[                                    ] (the “Landlord”)
RE:	Lease for [                                                     ] (the “Premises”)

On the understanding that the Administrative Agent and the Collateral Agent shall be relying upon this Estoppel Certificate in proceeding with and closing the Credit Agreement (the “Credit Agreement”) dated May 19, 2005 among North American Energy Partners Inc., as borrower, the Administrative Agent, the Collateral Agent and the Persons party thereto as lenders, as amended, supplemented, restated, replaced or refinanced from time to time, and that the Trustee shall be relying upon this Estoppel Certificate in proceeding with and closing the Senior Second Lien Secured Note Indenture dated May 19, 2005 pursuant to which the Senior Second Lien Secured Notes (as defined in the Credit Agreement) are issued, as such note indenture may be amended, supplemented, restated, replaced or refinanced from time to time, the Landlord confirms that as of the date hereof:

1. The lease of the Premises between [                                         ] (the “Tenant”) dated [                     ], [                                                          ], was validly authorized, executed and delivered by the Tenant and is unmodified and in full force and effect (the lease and any renewals and amendments thereto and assignments thereof are herein collectively called the “Lease”). The lands and buildings comprising the Premises are located entirely on the lands described in the Lease.

2. The term of the Lease is [                                     ], which term commenced on [                         ] and terminates on [                             ], and the Tenant is in possession of the Premises and has been carrying on business in accordance with the terms of the Lease.

3. All the rights and obligations of the Landlord and the Tenant are contained in the Lease.

4. All minimum rent and additional rent including the percentage rent and the tenant recoveries, if applicable, (collectively, the “Rent”) payable under the Lease have been paid to the date hereof, and neither the Rent nor a security deposit has been prepaid.

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5. There is no existing default by either the Landlord or the Tenant under the terms of the Lease and the Lease is in good standing and all conditions under the Lease have been satisfied.

6. There are no abatements rights, set-offs, claims, defenses or counterclaims by either of the Landlord or the Tenant against the other in respect of the Lease.

7. All work to be done by the Landlord within or to the Premises has been completed and all tenant allowances and inducements have been paid.

8. No litigation or governmental or municipal proceeding have been commenced or are pending or threatened by or against the Landlord with respect to the Premises which, if decided against the Landlord, would adversely impair its ability to comply with the terms of the Lease.

9. To the best of the Landlord’s knowledge, no litigation or governmental or municipal proceedings have been commenced or are pending or threatened by or against the Tenant with respect to the Premises which, if decided against the Tenant, would adversely impair its ability to comply with the terms of the Lease.

10. (a) The minimum rent under the Lease is [                     ] monthly and the Tenant’s present monthly payment of additional rent is $                 .

(b) The minimum rent payable under the Lease has been paid to                     ,              and the additional rent payable under the Lease has been paid to                     ,             .

11. The Tenant has no express or implied right to terminate this Lease.

12. The Premises have been completed in accordance with the terms of the Lease and there are no claims outstanding for defective workmanship and/or materials.

The Landlord agrees with the Administrative Agent, Collateral Agent and the Trustee (collectively, the “Agents”) as follows:

1. The Landlord agrees to deliver to the Agents a copy of any written notice which is sent by the Landlord to the Tenant dealing with any default or alleged default by the Tenant under the Lease. For the purposes of the Lease and this agreement, the addresses for notices to the Agents are:

BNP Paribas (Canada) as Administrative Agent BNP Paribas One Front Street, 23rd Fl. San Francisco CA 94111	GE Canada Finance Holding Company as Collateral Agent 100 California Street, 10th Fl. San Francisco, CA 94111	Wells Fargo Bank, N.A. as Trustee and Agent 505 Main Street Fort Worth, Texas 76102
Attention: Anthony Wilson, Merchant Banking Group Tel: (415) 772-1526 Fax: (415) 398-4240	Attention: Daniel Shapiro, Global Sponsor Finance Tel: (415) 277-7407 Fax: (415) 277-7443	Attention: Melissa Scott Fax: (817) 885-8650

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and to

BNP Paribas

77 King Street West

Suite 4100, P.O. Box 31

Royal Trust Tower, TD

Centre

Toronto, Ontario M5K 1N8

Attention: Eric Borromeo,

Vice-President

Tel: (416) 365-6719

Fax: (416) 947-9995

The Landlord further agrees that the Agents, at their option, shall have the right to remedy the default within the time period for remedying the default set out in the Lease prior to the exercise by the Landlord of any of the Landlord’s rights under the Lease. If, pursuant to its security or otherwise, the Agents take possession of the Premises, the Landlord agrees to permit such person or persons to remain in possession of the Premises provided that such person or persons agree to perform the Tenant’s obligations under the Lease and agrees in writing with the Landlord to be bound by all the terms and conditions of the Lease while such person or persons is in possession of the Premises.

2. This Agreement will take effect on the completion of the financing transaction under the Credit Agreement.

3. This Agreement may be executed in any number of counterparts, with the same effect as if all the parties had signed the same document and will become effective once a signed counterpart is delivered by each of the parties to the other. This Agreement shall be deemed to be executed under seal even if a party to this Agreement fails to affix its seal to this Agreement.

4. This Agreement may be executed by a party and delivered by telecopy and if so executed and transmitted this Agreement will be for all purposes effective as if the parties had delivered and executed the original Agreement.

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DATED effective                     ,             .

[LANDLORD]
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
BNP PARIBAS (CANADA)
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
GE CANADA FINANCE HOLDING COMPANY
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
WELLS FARGO BANK, N.A.
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory

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CONSENT AND AGREEMENT REGARDING ASSIGNMENT OF EQUIPMENT LEASES

[LESSOR]

TO:	BNP Paribas (Canada) and its successors and assigns in its capacity as administrative agent (the “Administrative Agent”), GE Canada Finance Holding Company and its successors and assigns in its capacity as collateral agent (“Collateral Agent”), and the banks and financial institutions from time to time party, as lenders, to the credit agreement dated May 19, 2005 (the “Credit Agreement”) among North American Energy Partners Inc., as borrower, the Administrative Agent, the Collateral Agent, and such lenders, as such Credit Agreement may be amended, supplemented, restated, replaced or refinanced from time to time;
AND TO:	Wells Fargo Bank, N.A., and its successors and assigns in its capacity as trustee and agent (the “Trustee”) for the Second Lien Secured Parties under that certain Senior Second Lien Secured Note Indenture dated May 19, 2005 pursuant to which the Senior Second Secured Notes (as defined in the Credit Agreement) are issued, as such note indenture may be amended, supplemented, restated, replaced or refinanced from time to time;
AND TO:	North American Energy Partners Inc. and Affiliates
AND TO:	The Swap Lenders, as defined in the Credit Agreement

The undersigned (the “Lessor”) hereby:

1. consents to the assignment and transfer (by way of mortgage or security) in favour of the secured creditors of the Assignor of the right, title and interest of North American Construction Group Inc. or any affiliate thereof (the “Assignor”) in, to and under all equipment lease agreements previously or hereafter entered into between the Lessor and the Assignor (collectively, the “Equipment Leases”) and all equipment leased thereunder, including without limitation the lease agreements described in Schedule “A” attached hereto and any equipment described in any lease schedules entered into from time to time pursuant to such equipment lease agreements; and

2. agrees with the Administrative Agent, the Collateral Agent and the Trustee (collectively, the “Agents”) that the Lessor will not terminate any of the Equipment Leases or exercise any other remedy thereunder as a result of any default thereunder or any other circumstance without (a) first giving prior written notice to the Agents setting forth the Lessor’s intention to terminate or exercise any such other remedy and reasonable details of the default or other circumstance giving rise to the right to terminate or exercise such other remedy, and (b) allowing the Agents or any other person at their direction to cure, remedy or otherwise remove the default or other circumstance within the 60 day period following the giving of such notice (and if the default or other circumstance is so cured, remedied or removed within such period, the right to terminate or any other remedy will not be exercised as a result thereof). Any such notice shall be sent to the following addresses or to such other person or address as may be provided by notice in writing to the Lessor from time to time:

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BNP Paribas (Canada) as Administrative Agent BNP Paribas One Front Street, 23rd Floor San Francisco CA 94111	GE Canada Finance Holding Company as Collateral Agent 100 California Street, 10th Fl. San Francisco, CA 94111	Wells Fargo Bank, N.A. as Trustee and Agent 505 Main Street Fort Worth, Texas 76102
Attention: Anthony Wilson, Merchant Banking Group Tel: (415) 772-1526 Fax: (415) 398-4240	Attention: Daniel Shapiro, Global Sponsor Finance Tel: (415) 277-7407 Fax: (415) 277-7443	Attention: Melissa Scott Fax: (817) 885-8650
and to BNP Paribas 77 King Street West Suite 4100, P.O. Box 31 Royal Trust Tower, TD Centre Toronto, Ontario M5K 1N8
Attention: Eric Borromeo, Vice-President Tel: (416) 365-6719 Fax: (416) 947-9995

The Lessor shall, upon the reasonable request of the Assignor and at the expense of the Assignor, update Schedule A hereto, execute any further documents, give any further notices and take any further actions as may be reasonably required by the Assignor in order to further evidence or give further effect to the consent described above. The Lessor hereby authorizes the Assignor or its legal counsel to register any financing statements or other notices registered or filed against the Assignor (or any amendments to any of the foregoing) in order to reflect the assignment and transfer described in paragraph one above.

A faxed or electronic copy of an executed copy of this consent shall have the same force and effect as an originally executed copy of this consent.

This consent shall be binding upon the undersigned and its successors and assigns.

Dated as of the          day of              ,         

[LESSOR]

By:

Name:

Title:

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SCHEDULE “A” TO CONSENT TO ASSIGNMENT OF EQUIPMENT LEASES

Description of Equipment Leases

1.

Lessee Lessor Type of Agreement Date of Agreement

2. Lease Schedules to the foregoing master equipment lease(s) relating to the following equipment:

Unit Number Description Serial No. Lessor CCA

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FORM OF COLLATERAL ACCESS AGREEMENT

(PROCESSOR/WAREHOUSE COMPANY/CONSIGNEE)³

TO:	BNP PARIBAS (CANADA) and its successors and assigns, as administrative agent (the “Administrative Agent”)
AND TO:	GE CANADA FINANCE HOLDING COMPANY and its successors and assigns, as collateral agent (the “Collateral Agent”)
AND TO:	WELLS FARGO BANK, N.A. and its successors and assigns, as trustee and agent (the “Trustee”, and together with the Collateral Agent, the “Secured Parties”)
AND TO:	The Swap Lenders, as defined in the Credit Agreement
FROM:	[Insert name and principal address of bailee/consignee] (the “Holder”)
RE:	Goods of [Name of Debtor(s)] located at facilities of the Holder

Ladies and Gentlemen:

On the understanding that the Administrative Agent and the Collateral Agent shall be relying upon this Collateral Access Agreement in proceeding with and closing the Credit Agreement (the “Credit Agreement”) dated May 19, 2005 among North American Energy Partners Inc., as borrower, the Administrative Agent, the Collateral Agent and the Persons party thereto as lenders, as amended, supplemented, restated, replaced or refinanced (including with the same or different lenders) from time to time, and that the Trustee shall be relying upon this Collateral Access Agreement in proceeding with and closing the note indenture dated May 19, 2005 pursuant to which the 9% senior secured notes due 2010 are issued, as such note indenture may be amended, supplemented, restated, replaced or refinanced from time to time, the Holder agrees that as of the date hereof:

1. The Holder’s correct legal name and principal address are set forth above.

2. If in the future, the Holder changes the legal form in which it conducts business or changes its business name or changes its principal address it agrees to provide the Secured Parties with prompt written notice of the change.

3. [Name of Issuer / Debtor] (the “Company”), from time to time, has and will deliver merchandise, equipment, inventory or other goods owned by the Company (the “Goods”) to the Holder for [storage/processing/on consignment/otherwise]⁴ at your facilities at the addresses set out in Schedule A. The Holder agrees to provide prompt written notice to the Secured Parties of a change in or addition to the addresses set out in Schedule A.

4. The Company has granted a continuing general lien upon and security interest in favor of each of the Collateral Agent and the Trustee (the “Security Interests”) in all the present and future tangible and intangible personal property of the Company, including, without limitation, the Goods.

³ This form of Collateral Access Agreement is to be executed by processors, warehouse companies or consignees

⁴ Specify terms of arrangement.

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5. The Company is the owner of the Goods and the grant by the Company of the Security Interests does not constitute a default under any agreement involving the Company and the Holder, and to the extent that such agreement requires the Holder’s consent, the Holder hereby consents.

6. The Holder does not have title to any of the Goods, nor does the Holder have any claim to or lien upon any of the Goods (other than for customary warehousing and processing charges); and any and all right of distraint or levy, right of retention or other interest which the Holder may now have or hereafter have in any of the Goods shall be subject and subordinate in every respect to the Security Interests. The Holder has not been notified by any other person that it has or purports to have a security interest, hypothec or other lien in or claim to the Goods. If the Holder issues storage receipts or other documents of title which evidence any Goods now or hereinafter delivered to the Holder, the Holder will make them non-negotiable and note on them that they have been issued for the account of the Collateral Agent and the Trustee.

7. The Holder will allow the Secured Parties, their auditors or other designees access to the locations set out in Schedule A, upon reasonable prior notice, during ordinary business hours in order to inspect the Goods and verify the type and quantity thereof. In addition, if the Secured Parties elect to remove the Goods from the Holder’s premises pursuant to direction under paragraph 8 below, the Holder will grant the Secured Parties access to such premises, upon reasonable prior notice, during ordinary business hours to do so and will not hinder the Secured Parties’ actions in removing the Goods.

8. Until further notice, the Holder may release any Goods to any authorized agent of the Company or upon the Company’s request and the Holder may issue non-negotiable warehouse receipts or non-negotiable documents of title to the Company. However, upon written direction of the Secured Parties, the Holder agrees not to deliver any further Goods to the Company or its designated recipient, but to hold all Goods subject to the Secured Parties’ further direction (such further direction may include, without limitation, a direction for the release of the Goods to the Secured Parties) and, upon receipt of such written direction, the Holder agrees to issue no further warehouse receipts or other documents of title, except as directed by the Secured Parties.

9. The Company agrees that the Holder shall have no liability to the Company if the Holder complies with the Secured Parties’ written directions as described above. The Company further agrees that it will continue to pay all storage expenses related to the storage of the Goods and will reimburse the Holder for all reasonable costs and expenses incurred as a direct result of the Holder’s compliance with the terms and provisions of this Collateral Access Agreement.

10. If the Company defaults under any agreement it has with the Holder relating to the Goods, the Holder will not exercise any remedy under such agreement or applicable law or in equity unless the Holder has provided the Secured Parties with written notice of such default and given the Secured Parties 30 business days to cure a default and, during such time, the Holder will allow the Secured Parties to enter each of the locations set out in Schedule A and remove the Goods. If any default is cured during the applicable period, the Holder agrees to rescind the notice of default, but the

G-9

Secured Parties shall have no obligation to cure any default of the Company or, having commenced such cure, to complete such cure. Notwithstanding the foregoing, the Holder’s failure to provide such notice shall not render the Holder liable to the Secured Parties in any manner or diminish or otherwise affect the Holder’s rights under any such agreement with the Company.

11. Any notice to the Secured Parties shall be sent to the following addresses or to such other person or address as may be provided by notice in writing to the Holder from time to time:

BNP Paribas (Canada)	GE Canada Finance Holding Company	Wells Fargo Bank, N.A.
BNP Paribas One Front Street, 23rd Floor San Francisco CA 94111	100 California Street, 10th Fl. San Francisco, CA 94111	505 Main Street Fort Worth, Texas 76102
Attention: Anthony Wilson, Merchant Banking Group Tel: (415) 772-1526 Fax: (415) 398-4240	Attention: Daniel Shapiro, Global Sponsor Finance Tel: (415) 277-7407 Fax: (415) 277-7443	Attention: Melissa Scott Fax: (817) 885-8650
and to
BNP Paribas 77 King Street West Suite 4100, P.O. Box 31 Royal Trust Tower, TD Centre Toronto, Ontario M5K 1N8
Attention: Eric Borromeo, Vice-President Tel: (416) 365-6719 Fax: (416) 947-9995

12. This Collateral Access Agreement may be executed in any number of counterparts, with the same effect as if all the parties had signed the same document and will become effective once a signed counterpart is delivered by each of the parties to the other. This Collateral Access Agreement shall be deemed to be executed under seal even if a party to this Collateral Access Agreement fails to affix its seal to this Collateral Access Agreement.

13. This Collateral Access Agreement may be executed by a party and delivered by telecopy and if so executed and transmitted this Collateral Access Agreement will be for all purposes effective as if the parties had delivered and executed the original Collateral Access Agreement.

G-10

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK

G-11

DATED effective             , 2005.

[NAME OF HOLDER]
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
[THE COMPANY]
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
BNP PARIBAS (CANADA)
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
GE CANADA FINANCE HOLDING COMPANY
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory
WELLS FARGO BANK, N.A.
Per:		(c/s)
	Name:
	Authorized Signatory
Per:
	Name:
	Authorized Signatory

G-12

SCHEDULE “A” TO COLLATERAL ACCESS AGREEMENT

Addresses of Holder’s Facilities

[Include all of the Holder’s addresses where the Company’s Goods are located]

G-13

EX-4.3

EXHIBIT 4.3

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

NORTH AMERICAN ENERGY PARTNERS INC.

AND

THE GUARANTORS NAMED HEREIN

AS ISSUERS

AND

JEFFERIES & COMPANY, INC.

AS INITIAL PURCHASER

DATED AS OF MAY 19, 2005

Registration Rights Agreement

This Registration Rights Agreement (this “Agreement”) is made and entered into as of May 19, 2005, by and among North American Energy Partners Inc., a Canadian federal corporation (the “Company”), the Guarantors listed on Schedule I hereto (the “Guarantors” and, together with the Company, the “Issuers”) and Jefferies & Company, Inc. (the “Initial Purchaser”), who has agreed to purchase the Issuers’ 9% Senior Secured Notes due 2010 (the “Initial Notes”) pursuant to the Purchase Agreement (as defined below).

This Agreement is made pursuant to the Purchase Agreement, dated as of April 26, 2005, as amended (the “Purchase Agreement”), by and among the Issuers and the Initial Purchaser (i) for the benefit of the Initial Purchaser and (ii) for the benefit of the holders from time to time of the Initial Notes (including the Initial Purchaser). In order to induce the Initial Purchaser to purchase the Initial Notes, the Issuers have agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchaser set forth in Section 4(a) of the Purchase Agreement.

The parties hereby agree as follows:

Section 1.     Definitions

As used in this Agreement, the following capitalized terms shall have the following meanings:

Additional Interest: As defined in Section 5 hereof.

Advice: As defined in Section 6(c) hereof.

Broker Dealer: Any broker or dealer registered under the Exchange Act.

Closing Date: The date of this Agreement.

Commission: The Securities and Exchange Commission.

Consummate: A registered Exchange Offer shall be deemed “Consummated” for purposes of this Agreement upon the occurrence of all of the following (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Issuers to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Initial Notes that were tendered by Holders thereof pursuant to the Exchange Offer.

Effectiveness Target Date: As defined in Section 5 hereof.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Exchange Notes: The 9% Senior Secured Notes due 2010, of the same series under the Indenture as the Initial Notes, to be issued to Holders in exchange for Transfer Restricted Notes pursuant to this Agreement.

Exchange Offer: The registration by the Issuers under the Securities Act of the Exchange Notes pursuant to a Registration Statement pursuant to which the Issuers offer the Holders of all outstanding Transfer Restricted Notes the opportunity to exchange all such outstanding Transfer Restricted Notes held by such Holders for Exchange Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Notes tendered in such exchange offer by such Holders.

Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus.

Guarantor: As defined in the preamble hereto.

Holders: As defined in Section 2(b) hereof.

Indemnified Holder: As defined in Section 8(a) hereof.

Indenture: The Indenture, dated as of May 19, 2005, among the Issuers and Wells Fargo Bank, N.A., as trustee (the “Trustee”), pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof.

Initial Notes: The 9% Senior Secured Notes due 2010, of the same series under the Indenture as the Exchange Notes, for so long as such securities constitute Transfer Restricted Notes.

Initial Placement: The issuance and sale by the Issuers of the Initial Notes to the Initial Purchaser pursuant to the Purchase Agreement.

Initial Purchaser: As defined in the preamble hereto.

Interest Payment Date: As defined in the Notes.

NASD: The National Association of Securities Dealers, Inc.

Notes: The Initial Notes and the Exchange Notes.

Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

Prospectus: The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post effective amendments, and all material incorporated by reference into such Prospectus.

Registration Default: As defined in Section 5 hereof.

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Registration Statement: Any registration statement of the Company relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Notes pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement, in each case, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein.

Securities Act: The Securities Act of 1933, as amended.

Shelf Filing Deadline: As defined in Section 4 hereof.

Shelf Registration Statement: As defined in Section 4 hereof.

Transfer Restricted Note: Each Note until entitled to be resold to the public by the Holder thereof without restriction under applicable federal or state securities laws or the date on which all such Notes cease to be outstanding.

Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa to 77bbbb) as in effect on the date of the Indenture.

Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public.

Section 2.     Securities Subject To This Agreement

(a) Transfer Restricted Notes. The notes entitled to the benefits of this Agreement are the Transfer Restricted Notes.

(b) Holders of Transfer Restricted Notes. A Person is deemed to be a holder of Transfer Restricted Notes (each, a “Holder”) whenever such Person owns Transfer Restricted Notes.

Section 3.     Registered Exchange Offer

(a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Issuers shall (i) file with the Commission within 90 days after the Closing Date, a single Registration Statement under the Securities Act relating to the Exchange Notes and the Exchange Offer, (ii) use their respective commercially reasonable efforts to cause such Registration Statement to become effective within 180 days after the Closing Date, (iii) in connection with the foregoing, file (A) all pre effective amendments to such Registration Statement as may be necessary in order to cause such Registration Statement to become effective and (B) if applicable, a post-effective amendment to such Registration Statement pursuant to Rule 430A under the Securities Act, (iv) cause all necessary filings in connection with the registration and qualification of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (v) upon the effectiveness of such Registration Statement, commence the Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form permitting registration of the

3

Exchange Notes to be offered in exchange for the Transfer Restricted Notes and to permit resales of Notes held by Broker Dealers as contemplated by Section 3(c) below.

(b) The Issuers shall use their respective commercially reasonable efforts to (i) keep the Exchange Offer Registration Statement continuously effective and (ii) keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 30 days after the date notice of the Exchange Offer is mailed to the Holders. The Issuers shall cause the Exchange Offer to comply with all applicable federal and state securities laws and all applicable Canadian securities laws. No securities other than the Notes shall be included in the Exchange Offer Registration Statement. The Issuers shall use their respective commercially reasonable efforts to cause the Exchange Offer to be Consummated promptly after the Exchange Offer Registration Statement has become effective, but in no event later than 225 days after the Closing Date. Any Registration Statement or other document delivered to persons in Canada in connection with the Exchange Offer that constitutes an “offering memorandum” for the purposes of applicable Canadian securities laws shall contain all disclosure required by such laws. The Exchange Notes shall carry the applicable legend specified in Section 2.5 of Multilateral Instrument 45-102 of the Canadian Securities Administrators. The Issuers shall file all reports required by applicable Canadian securities laws in respect of the issuance of Exchange Notes to persons in Canada.

(c) The Issuers shall indicate in a “Plan of Distribution” section contained in the Prospectus forming a part of the Exchange Offer Registration Statement that any Broker-Dealer who holds Initial Notes that are Transfer Restricted Notes and that were acquired for its own account as a result of market-making activities or other trading activities (other than Transfer Restricted Notes acquired directly from the Issuers), may exchange such Initial Notes pursuant to the Exchange Offer; however, such Broker Dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the Exchange Notes received by such Broker Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker Dealer of the Prospectus contained in the Exchange Offer Registration Statement. Such “Plan of Distribution” section shall also contain all other information with respect to such resales by Broker Dealers that the Commission may require in order to permit such resales pursuant thereto, but such “Plan of Distribution” shall not name any such Broker Dealer or disclose the amount of Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement.

The Issuers shall use their respective commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Notes acquired by Broker Dealers for their own accounts as a result of market making activities or other trading activities, and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) 180 days from the date on which the Exchange Offer Registration Statement is declared effective and (ii)

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the date on which a Broker Dealer is no longer required to deliver a prospectus in order to resell the Exchange Notes or in connection with market making or other trading activities.

The Issuers shall provide sufficient copies of the latest version of such Prospectus to Broker Dealers promptly upon request at any time during such 180 day (or shorter as provided in the foregoing sentence) period in order to facilitate such resales.

Section 4.     Shelf Registration

(a) Shelf Registration. If (i) the Issuers are not required to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Issuers determine in good faith after consultation with counsel that the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), or (ii) any Holder of Transfer Restricted Notes notifies the Company in writing prior to the 20th day following the consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker Dealer, and holds Initial Notes acquired directly from the Issuers or one of their respective affiliates, then, upon such Holder’s request, the Issuers shall:

(x) use their respective commercially reasonable efforts to cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the “Shelf Registration Statement”) as promptly as practicable after receipt of notice pursuant to Section 4(a) (such date being the “Shelf Filing Deadline”), which Shelf Registration Statement shall provide for resales of all Transfer Restricted Notes the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and

(y) use their respective commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 90th day after the Shelf Filing Deadline.

The Issuers shall use their respective commercially reasonable efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for resales of Notes by the Holders of Transfer Restricted Notes entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period ending on the earlier of (i) two years from the Closing Date or such shorter period that will terminate when all the Transfer Restricted Notes covered by the Shelf Registration Statement have been sold in the manner set forth and as contemplated by the Registration Statement and (ii) the date on which the Notes become eligible for resale without volume restrictions pursuant to Rule 144 under the Securities Act.

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(b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Notes may include any of its Transfer Restricted Notes in any Shelf Registration Statement pursuant to this Agreement, or be entitled to any Additional Interest, if any, with respect thereto, unless and until such Holder furnishes to the Company in writing, within 15 business days after receipt of a request therefor, such information as the Company may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary prospectus included therein. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading.

Section 5.     Additional Interest

If (i) any of the Registration Statements required by this Agreement is not filed with the Commission on or prior to the date specified for such filing in this Agreement, (ii) any of such Registration Statements has not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated within 225 days after the Closing Date or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective without being succeeded immediately by a post effective amendment to such Registration Statement that cures such failure to be effective and that is itself immediately declared effective (each such event referred to in clauses (i) through (iv), a “Registration Default”), the Issuers (A) acknowledge and agree that the Holders of the Transfer Restricted Notes will suffer damages if any Registration Default were to occur and that it would not be feasible to ascertain the extent of such damages with precision and (B) accordingly, jointly and severally, hereby agree to pay to each Holder of the Transfer Restricted Notes affected thereby Additional Interest in an amount equal to one quarter of one percent (0.25%) per annum on principal amounts of the Transfer Restricted Notes held by such Holder during the 90 day period immediately following the occurrence of any Registration Default and shall increase by an additional one quarter of one percent (0.25%) per annum on the principal amounts of such Transfer Restricted Notes at the end of each subsequent 90 day period, but in no event shall such increase exceed 2.00% per annum (any such interest assessed upon the occurrence of Registration Default is referred to as “Additional Interest”); provided, however, that (i) the circumstances under which the Issuers may be required to pay Additional Interest are not cumulative and (ii) Additional Interest on the Transfer Restricted Notes shall cease to accrue upon the earlier of (a) when all Registration Defaults have been cured or (b) upon the second anniversary of the Closing Date (or if Rule 144(k) is amended to provide for a shorter restrictive period, such shorter period).

The Company shall notify the Trustee within 3 business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid.

All accrued Additional Interest shall be payable, in the manner provided for the payment of interest in the Notes, on each applicable Interest Payment Date.

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Section 6.     Registration Procedures

(a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Issuers shall comply with all of the provisions of Section 6(c) below, shall use their respective commercially reasonable efforts to effect such exchange to permit the sale of Transfer Restricted Notes being sold in accordance with the intended method or methods of distribution thereof, and shall comply with all of the following provisions:

(i) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Notes shall furnish, upon the request of the Issuers, prior to the Consummation thereof, a written representation to the Issuers (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an affiliate of any of the Issuers, as defined in Rule 405 promulgated under the Securities Act, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution, within the meaning of the Securities Act, of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Notes shall otherwise cooperate in the Issuers’ preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (which may include any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Notes obtained by such Holder in exchange for Initial Notes acquired by such Holder directly from the Issuers.

(b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Issuers shall comply with all the provisions of Section 6(c) below and shall use their respective commercially reasonable efforts to effect such registration to permit the sale of the Transfer Restricted Notes being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Issuers shall as expeditiously as possible prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Notes in accordance with the intended method or methods of distribution thereof.

(c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Notes

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(including, without limitation, any Registration Statement and the related Prospectus required to permit resales of Transfer Restricted Notes by Broker Dealers), the Issuers shall:

(i) use their respective commercially reasonable efforts to keep such Registration Statement continuously effective and provide all requisite financial statements (including, if required by the Securities Act or any regulations thereunder, financial statements of the Guarantors) for the period specified in Section 3 or 4 of this Agreement, as applicable; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Notes during the period required by this Agreement, the Issuers shall file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use their respective commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

(ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Notes covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

(iii) advise the underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Notes for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities

8

commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Notes under state securities or Blue Sky laws, the Issuers shall use their respective commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

(iv) furnish without charge to the Initial Purchaser, each selling Holder named in any Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review of such Holders and underwriter(s) in connection with such sale, if any, for a period of at least five business days, and the Issuers will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which the Initial Purchaser of Transfer Restricted Notes covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within five business days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period). The objection of the Initial Purchaser or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of material fact or omits to state any material fact necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Securities Act;

(v) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the Initial Purchaser, each selling Holder named in any Registration Statement, and to the underwriter(s), if any, make the Issuers’ representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriter(s), if any, reasonably may request;

(vi) make available at reasonable times for inspection by the Initial Purchaser, any managing underwriter participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by the Initial Purchaser or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of the Issuers, and cause the officers, directors, managers, managing members, general partners and employees of the Issuers, to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such Registration Statement subsequent to the filing thereof and prior to its effectiveness;

(vii) if requested by any selling Holders or the underwriter, if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders and underwriter(s), if any, may reasonably request to have included therein, including, without limitation, information relating to the “Plan of Distribution” of the Transfer

9

Restricted Notes, information with respect to the principal amount of Transfer Restricted Notes being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Notes to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

(viii) if not already rated by an appropriate rating agency, cause the Transfer Restricted Notes covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of Notes covered thereby or the underwriter(s), if any;

(ix) furnish to each selling Holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules, all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference);

(x) deliver to each selling Holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Issuers hereby consent to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Notes covered by the Prospectus or any amendment or supplement thereto;

(xi) enter into such customary agreements (including an underwriting agreement), and make such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Notes pursuant to any Registration Statement contemplated by this Agreement, all to such extent as may be reasonably requested by the Initial Purchaser or by any Holder of Transfer Restricted Notes or underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and in connection with any Underwritten Registration pursuant to a Shelf Registration Statement, the Issuers shall:

(1) furnish to the Initial Purchaser, each selling Holder and each underwriter, if any, in such substance and scope as they may request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Shelf Registration Statement:

(A) a certificate, dated the date of effectiveness of the Shelf Registration Statement signed by the Chief Financial Officer of the Company, confirming, as of the date thereof, the matters set forth in Section 8(j) of the Purchase Agreement, and such other matters as such parties may reasonably request;

10

(B) an opinion, dated the date of effectiveness of the Shelf Registration Statement of counsel for the Issuers, covering the matters set forth in Section 8(e) of the Purchase Agreement and such other matters as such parties may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Issuers, representatives of the independent public accountants for the Issuers, the Initial Purchaser’s representatives and the Initial Purchaser’s counsel in connection with the preparation of such Registration Statement and the related Prospectus and has considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel’s attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and

(C) a customary comfort letter, dated as of the date of effectiveness of the Shelf Registration Statement from the Issuers’ independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters by underwriters in connection with primary underwritten offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 8(g) of the Purchase Agreement, without exception;

(2) if requested, set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 7 hereof with respect to all parties to be indemnified pursuant to said Section; and

(3) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with

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any customary conditions contained in the underwriting agreement or other agreement entered into by the Issuers pursuant to this clause (xi), if any.

If at any time the representations and warranties of the Issuers contemplated in this clause (xi) cease to be true and correct, the Company shall so advise the Initial Purchaser and the underwriter(s), if any, and each selling Holder promptly and, if requested by such Persons, shall confirm such advice in writing;

(xii) prior to any public offering of Transfer Restricted Notes, cooperate with the selling Holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Notes under the securities or Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s) may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Notes covered by the Shelf Registration Statement; provided, however, that no Issuer shall be required to register or qualify as a foreign corporation where it is not then so qualified or to take any action that would subject it to the service of process in suits or to taxation in any jurisdiction where it is not then so subject;

(xiii) shall issue, upon the request of any Holder of Initial Notes covered by the Shelf Registration Statement, Exchange Notes pursuant to the Exchange Offer, having an aggregate principal amount equal to the aggregate principal amount of Initial Notes surrendered to the Issuers by such Holder in exchange therefor or being sold by such Holder; such Exchange Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Initial Notes held by such Holder shall be surrendered to the Issuers for cancellation;

(xiv) cooperate with the selling Holders and the underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Notes to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Notes to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least five business days prior to any sale of Transfer Restricted Notes made by such underwriter(s);

(xv) use their respective commercially reasonable efforts to obtain the consent or approval of each governmental agency or authority that may be required to effect the registration contemplated herein of the Transfer Restricted Notes covered by the Registration Statement to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Notes, subject to the proviso contained in clause (xii) above;

(xvi) if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Notes, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

12

(xvii) provide a CUSIP number for all Exchange Notes not later than the effective date of the Registration Statement and provide the Trustee under the Indenture with printed certificates for the Exchange Notes which are in a form eligible for deposit with the Depositary Trust Company;

(xviii) cooperate with any underwriter in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of the NASD; and

(xix) otherwise use their respective commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earning statement meeting the requirements of Rule 158 (which need not be audited) for the twelve month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Notes are sold to underwriters in a firm or best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Issuers’ first fiscal quarter commencing after the effective date of the Registration Statement;

(xx) cause the Indenture to be qualified under the Trust Indenture Act not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Securities to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and to execute and use their respective commercially reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner;

(xxi) cause all Transfer Restricted Notes covered by the Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of Initial Notes or the managing underwriter(s), if any;

(xxii) provide promptly to each Holder upon request each document filed with the Commission pursuant to the requirements of Section 13 and Section 15 of the Exchange Act; and

(xxiii) use their respective commercially reasonable efforts to take all other steps necessary or advisable to effect the registration of the Registrable Securities covered by a Registration Statement contemplated hereby.

Each Holder agrees by acquisition of a Transfer Restricted Note that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Notes pursuant to the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is

13

advised in writing (the “Advice”) by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Notes that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice.

Section 7.     Registration Expenses

All expenses incident to the Issuers’ performance of or compliance with this Agreement will be borne by the Issuers, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses (including filings made by the Initial Purchaser or any Holder with the NASD (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the rules and regulations of the NASD)); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv) messenger and delivery services and telephone expenses of the Issuers and all fees and disbursements of counsel for the Issuers; (v) all application and filing fees in connection with listing the Exchange Notes on a national securities exchange or automated quotation system pursuant to the requirements thereof; (vi) all fees and disbursements of independent certified public accountants of the Issuers (including the expenses of any special audit and comfort letters required by or incident to such performance); (vii) all reasonable fees and disbursements of not more than one counsel chosen by the Holders of a majority in aggregate principal amount of the Transfer Restricted Notes to be included in the Shelf Registration Statement; and (viii) all fees and expenses relating to the qualification of the Indenture under the applicable securities laws.

The Issuers will, in any event, bear their respective internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuers.

Section 8.     Indemnification

(a) The Issuers jointly and severally agree to indemnify and hold harmless (i) each Holder and each participating Broker-Dealer and (ii) each person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder or participating Broker-Dealer (any of the persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives, managers, managing members, general partners and agents of any Holder, Broker-Dealer or any controlling person (any person referred to in clause (i), (ii) or (iii)

14

may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), joint or several, directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information relating to any of the Holders furnished in writing to the Company by any of the Holders expressly for use therein. This indemnity agreement shall be in addition to any liability which the Issuers may otherwise have.

(b) Each Holder of Transfer Restricted Notes agrees, severally and not jointly, to indemnify and hold harmless the Issuers and their respective directors, officers managers, managing members, general partners who sign a Registration Statement, and any person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Issuers, and the respective officers, directors, partners, employees, representatives, managers, managing members, general partners and agents of each such person, to the same extent as the foregoing indemnity from the Issuers to each of the Indemnified Holders, but only with respect to claims and actions based on statements or omissions made in reliance upon and conformity with such information furnished in writing by such Holder expressly for use in any Registration Statement and only to the extent such losses are judicially determined by a court of competent jurisdiction in a final unappealable order to have resulted primarily from (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in any Registration Statement, or in any amendment or supplement thereto, any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In case any action or proceeding shall be brought against the Issuers or their respective directors, managers, managing members, general partners or officers or any such controlling person in respect of which indemnity may be sought against a Holder of Transfer Restricted Notes, such Holder shall have the rights and duties given the Issuers and the Issuers or their respective directors, managers, managing members, general partners or officers or such controlling person shall have the rights and duties given to each Holder by the preceding paragraph. In no event shall the liability of any selling Holder hereunder be greater in amount than (i) the dollar amount of the proceeds received by such Holder upon the sale of the Notes giving rise to such indemnification obligation over (ii) the aggregate amount of damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

(c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the

15

indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability that it may have under this Section 8 except to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and; provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under this Section 8, except to the extent that any such failure referenced in this sentence results in the forfeiture by the indemnifying party of substantial rights and defenses. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Indemnified Holders shall have the right to employ counsel to represent jointly the Indemnified Holders and their respective directors, officers, employees, managers, managing members, general partners and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Holders against the Issuers under this Section 8 if, in the reasonable judgment of the Indemnified Holders, it is advisable for the Indemnified Holders and those directors, officers, employees, managers, managing members, general partners and controlling persons to be jointly represented by separate counsel, and in that event the fees and expenses of such separate counsel shall be paid by the Issuers. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuers, on the one hand, and the Holders, on the other hand, from the Initial Placement (which in the case of the Issuers shall be deemed to be equal to the total net proceeds from the Initial Placement as set forth on the cover page of the Offering Circular, dated May 13, 2005), or if such allocation is not

16

permitted by applicable law, the relative fault of the Issuers, on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Issuers, on the one hand, and of the Indemnified Holder, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers or by the Indemnified Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

The Issuers and each Holder of Transfer Restricted Notes agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, none of the Holders (and its related Indemnified Holders) shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total discount received by such Holder with respect to the Initial Notes exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(d) are several in proportion to the respective principal amount of Initial Notes held by each of the Holders hereunder and not joint.

Section 9.     Rule 144A

Unless any Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuers shall, for so long as any Transfer Restricted Notes remain outstanding, make available to any Holder or beneficial owner of Transfer Restricted Notes in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Notes from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Notes pursuant to Rule 144A.

Section 10.     Participation In Underwritten Registrations

No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such

17

arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock up letters and other documents required under the terms of such underwriting arrangements.

Section 11.     Selection Of Underwriters

The Holders of Transfer Restricted Notes covered by the Shelf Registration Statement who desire to do so may sell such Transfer Restricted Notes in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Notes included in such offering; provided, that such investment bankers and managers must be reasonably satisfactory to the Issuers.

Section 12.     Miscellaneous

(a) Remedies. The Issuers hereby agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by any Issuer of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate; provided, however, that any such right to specific performance shall be subject to principles of customary commercial reasonableness, as determined by a court of competent jurisdiction.

(b) No Inconsistent Agreements. No Issuer will, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. No Issuer has entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuers’ securities under any agreement in effect on the date hereof.

(c) Adjustments Affecting the Securities. The Issuers will not take any action, or permit any change to occur, with respect to the Notes that would adversely affect the ability of the Holders to Consummate any Exchange Offer, unless such action or change is required by applicable law.

(d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless the Issuers have obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Notes; provided, however, that Section 8(d) and this Section 12(d) may not be amended, modified or supplemented without the prior written consent of each Holder. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Notes being tendered or registered; provided that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchaser

18

hereunder, the Issuers shall obtain the written consent of the Initial Purchaser with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective.

(e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery:

(i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and

(ii) if to the Company or any other Issuer:

North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016, Highway 60

Acheson, AB

Canada T7X 5A7

Telephone: (780) 960-4380

Facsimile: (780) 960-7103

Attention: Allen Maydonik

with a copy to:

Bracewell & Guiliani LLP

711 Louisiana, Suite 2300

Pennzoil Place, South Tower

Houston, Texas 77002

Telephone: (713) 221-1306

Facsimile: (713) 221-2166

Attention: Gary W. Orloff

(iii) if to the Initial Purchaser:

Jefferies & Company, Inc.

520 Madison Avenue

12th Floor

New York, NY 10022

Attention: Lloyd H. Feller, Esq.

with a copy to:

Mayer, Brown, Rowe & Maw LLP

1675 Broadway

New York, NY 10019

Telephone: (212) 506-2500

Facsimile: (212) 262-1910

Attention: Ronald S. Brody, Esq.

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All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if faxed; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture.

(f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Notes; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign acquired Transfer Restricted Notes from such Holder.

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HERETO AGREES TO SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS IN RESPECT OF SUCH SUIT OR ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. THE ISSUERS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. Nothing herein shall affect the right of any

20

party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Issuers in any other jurisdiction.

(j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k) Securities Held by the Company or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Securities is required hereunder, Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(l) Currency. (a) If, for the purposes of making any payments, it is necessary to convert a sum due under this Registration Rights Agreement in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Company could purchase the Original Currency with the Other Currency on the business day preceding the day on which payment is required. (b) The obligations of the Company and the Guarantors in respect of any sum due in the Original Currency under this Registration Rights Agreement shall be discharged only to the extent that on the business day following receipt by the Holders of any amounts due in the Other Currency, the Holders may, in accordance with normal banking procedures, purchase the Original Currency with such Other Currency. If the amount of the Original Currency so purchased is less than the sum originally due in the Original Currency, the Company and the Guarantors agree, as a separate obligation to indemnify each Holder against any loss.

(m) Entire Agreement. This Agreement together with the Purchase Agreement, the Notes, and the Indenture is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuers with respect to the Transfer Restricted Notes. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

COMPANY:
NORTH AMERICAN ENERGY PARTNERS INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
GUARANTORS:
NORTH AMERICAN CONSTRUCTION GROUP INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN CAISSON LTD.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN CONSTRUCTION LTD.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN ENGINEERING INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President

S-1

NORTH AMERICAN ENTERPRISES LTD.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN INDUSTRIES INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN MAINTENANCE LTD.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN MINING INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN PIPELINE INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President

S-2

NORTH AMERICAN ROAD INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN SERVICES INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN SITE DEVELOPMENT LTD.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NORTH AMERICAN SITE SERVICES INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
GRIFFITHS PILE DRIVING INC.
By:		/s/    VINCENT GALLANT
	Name:	Vincent Gallant
	Title:	Vice President
NACG FINANCE LLC
By:		/s/    CHRIS HAYMAN
	Name:	Chris Hayman
	Title:	Secretary

S-3

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written.
JEFFERIES & COMPANY, INC. as Initial Purchaser
By:	/s/ Brent Stevens
Name:	Brent Stevens
Title:	Executive Vice President

S-4

Schedule I

NACG Finance LLC

North American Construction Group Inc.

North American Caisson Ltd.

North American Construction Ltd.

North American Engineering Ltd.

North American Enterprises Ltd.

North American Industries Inc.

North American Maintenance Ltd.

North American Mining Inc.

North American Pipeline Inc.

North American Road Inc.

North American Services Inc.

North American Site Development Ltd.

North American Site Services Inc.

Griffiths Pile Driving Inc.

EX-5.1

EXHIBIT 5.1

June 7, 2005

North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5A7

Canada

Ladies and Gentlemen:

We have acted as counsel to North American Energy Partners Inc., a corporation incorporated under the Canadian Business Corporations Act (the “Company”), in connection with the offer by the Company to exchange US$1,000 principal amount of its 9% Exchange Senior Secured Notes due 2010 (the “Exchange Notes”) for each US$1,000 principal amount of its 9% Senior Secured Notes due 2010 issued on May 19, 2005 (the “Original Notes”), of which an aggregate of US$60,481,000 principal amount of Original Notes is outstanding (the “Exchange Offer”). The Company is filing with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-4 (the “Registration Statement”), with respect to the Exchange Offer under the Securities Act of 1933, as amended (the “Securities Act”).

We have examined originals or copies of (a) the Indenture, dated as of May 19, 2005 (the “Indenture”), by and among the Company, the guarantors named therein and Wells Fargo Bank, N.A., as Trustee (the “Trustee”), pursuant to which the Original Notes were issued and the Exchange Notes will be issued, (b) the Articles of Incorporation and By-Laws of the Company, each as amended to date, (c) certain resolutions adopted by the Board of Directors of the Company, and (d) such other documents and records as we have deemed necessary and relevant for the purposes hereof. In addition, we have relied on certificates of officers of the Company and of public officials and others as to certain matters of fact relating to this opinion and have made such investigation of law as we have deemed necessary and relevant as a basis hereof. In such examination and investigation, we have assumed the genuineness of all signatures, the authenticity of all documents and records submitted to us as originals, the conformity to authentic original documents and records of all documents and records submitted to us as copies, and the truthfulness of all statements of fact contained therein. We have also assumed the due

North American Energy Partners Inc.

June 7, 2005

Page 2

execution and delivery of the Indenture and the due authentication of the Original Notes by a duly authorized officer of the Trustee.

Based on the foregoing and subject to the limitations, assumptions and qualifications set forth herein, and having due regard for such legal considerations as we deem relevant, we are of the opinion that:

1. the Company has been incorporated under the laws of Canada and has not been dissolved; and

2. the Original Notes have been validly authorized and issued, the Exchange Notes have been validly authorized, and (subject to the Registration Statement becoming effective, the Indenture being qualified under the Trust Indenture Act of 1939 and any state securities or Blue Sky laws or Canadian federal or provincial securities laws being complied with) when (i) the Exchange Notes have been duly executed by duly authorized officers of the Company, (ii) the Exchange Notes have been duly authenticated by the Trustee under the Indenture, and (iii) the Original Notes have been validly tendered and not withdrawn and have been received and accepted by the Company, all in accordance with the terms of the Exchange Offer as set forth in the Registration Statement, the Exchange Notes issued in exchange for the Original Notes in accordance with the terms of the Exchange Offer will be validly issued and legally binding obligations of the Company entitled to the benefits of the Indenture.

Insofar as the law of Canada or any provinces thereof is applicable to the matters discussed herein, we have relied upon the opinion of Borden Ladner Gervais LLP, a copy of which is attached hereto.

We hereby consent to the filing of this opinion with the Commission as Exhibit 5 to the Registration Statement and to the references to our firm under the heading “Validity of the Exchange Notes” in the Prospectus included in the Registration Statement. By giving such consent, we do not admit that we are experts with respect to any part of the Registration Statement, including this Exhibit, within the meaning of the term “expert” as used in the Securities Act or the rules and regulations thereunder.

Very truly yours,

/s/ Bracewell & Giuliani LLP

Bracewell & Giuliani LLP

Attachment A

Borden Ladner Gervais LLP

Lawyers • Patent & Trade-mark Agents

Scotia Plaza, 40 King Street West

Toronto, Ontario, Canada M5H 3Y4

tel.: (416) 367-6000 fax: (416) 367-6749

www.blgcanada.com

June 7, 2005

Bracewell & Guiliani LLP

711 Louisiana, Suite 2300

Houston, TX 77002

U.S.A.

Ladies and Gentlemen:

We have acted as Canadian counsel to North American Energy Partners Inc. (the “Company”), a corporation incorporated under the Canada Business Corporations Act, in connection with an offer by the Company to exchange US$1,000 principal amount of its 9% Exchange Senior Notes due 2010 (the “Exchange Notes”) for each US$1,000 principal amount of its 9% Senior Secured Notes due 2010 issued on May 19, 2005 (the “Original Notes”) of which an aggregate of US$60,481,000 principal amount of Original Notes is outstanding (the “Exchange Offer”). In relation to the Exchange Offer, we understand that the Company is filing with the United States Securities and Exchange Commission (the “Commission”) a registration statement on Form F-4 (the “Registration Statement”) with respect to the Exchange Offer under the United States Securities Act of 1933, as amended (the “Securities Act”).

Qualifications

This opinion is, with your approval, predicated upon and qualified in its entirety by the following:

(a) We have made no investigation of the laws of any jurisdiction other than, and the opinions hereinafter expressed are confined to, the laws of the Provinces of Ontario and Alberta and the federal laws of Canada applicable in such provinces, each as at the date hereof.

(b) In expressing the opinions set out in paragraph 1, we have obtained and relied upon a Certificate of Compliance dated June 2, 2005 issued by Industry Canada in respect of the Company, and have assumed, with your concurrence, that such certificate evidences that the Company has not been dissolved as of the date hereof.

(c) In expressing the opinions set out herein, we have not conducted any searches of public records for the purpose of providing such opinion.

(d) The opinions expressed below are given as at the date hereof. We expressly disclaim any obligation to advise those persons to whom this opinion is addressed of any matters (including without limitation any facts or circumstances or any subsequently enacted, published or reported laws, regulations or judicial decisions

having retroactive effect) which may come to our attention after the date hereof and which may affect any of the opinions set out herein.

(e) Reliance on these opinions after the date hereof must be on the assumption that there has been no change in the law or in the facts on which the opinions are based.

Assumptions

In the course of the foregoing investigations and examinations, we have assumed the genuineness of all signatures, the legal capacity at all relevant times of any natural persons signing any documents, the authenticity of all documents submitted to us as originals, the conformity to authentic originals of all documents submitted to us as certified or true copies or as reproductions (including documents received by facsimile machine) and the accuracy of all certificates of public officials and corporate officers.

Based on the foregoing and subject to the qualifications and limitations set forth herein, and having due regard for such legal considerations as we deem necessary, we are of the opinion that:

1. The Company has been incorporated under the laws of Canada, and has not been dissolved and the Company has all the necessary corporate power and authority to own property and to conduct business and to execute and deliver, and to perform all its obligations under the Exchange Notes.

2. Each of the Original Notes and the Exchange Notes to be issued in exchange for the Original Notes in accordance with the terms of the Exchange Offer have been validly authorized by the Company.

This opinion is given solely for the use of the parties to whom it is addressed and only in connection with the Exchange Offer and we hereby consent to the attachment of this opinion to the opinion of Bracewell & Guiliani LLP, as part of the filing of such opinion as an Exhibit 5 to the Registration Statement, and the filing of this opinion as an Exhibit 5 to the Registration Statement, with the United States Securities and Exchange Commission. We also consent to the reference to our firm under the heading “Validity of the Exchange Notes” in the Prospectus included in the Registration Statement. By giving such consent, we do not admit that we are experts with respect to any part of the Registration Statement, including any Exhibit 5 wherein this opinion is included, within the meaning of the term “expert” as used in the Securities Act or the rules or regulations thereunder.

Yours truly,

BORDEN LADNER GERVAIS LLP

EX-5.2

EXHIBIT 5.2

Borden Ladner Gervais LLP

Lawyers • Patent & Trade-mark Agents

Scotia Plaza, 40 King Street West

Toronto, Ontario, Canada M5H 3Y4

tel.: (416) 367-6000 fax: (416) 367-6749

www.blgcanada.com

June 7, 2005

Bracewell & Guiliani LLP

711 Louisiana, Suite 2300

Houston, TX 77002

U.S.A.

Ladies and Gentlemen:

We have acted as Canadian counsel to North American Energy Partners Inc. (the “Company”), a corporation incorporated under the Canada Business Corporations Act, in connection with an offer by the Company to exchange US$1,000 principal amount of its 9% Exchange Senior Notes due 2010 (the “Exchange Notes”) for each US$1,000 principal amount of its 9% Senior Secured Notes due 2010 issued on May 19, 2005 (the “Original Notes”) of which an aggregate of US$60,481,000 principal amount of Original Notes is outstanding (the “Exchange Offer”). In relation to the Exchange Offer, we understand that the Company is filing with the United States Securities and Exchange Commission (the “Commission”) a registration statement on Form F-4 (the “Registration Statement”) with respect to the Exchange Offer under the United States Securities Act of 1933, as amended (the “Securities Act”).

Qualifications

This opinion is, with your approval, predicated upon and qualified in its entirety by the following:

(a) We have made no investigation of the laws of any jurisdiction other than, and the opinions hereinafter expressed are confined to, the laws of the Provinces of Ontario and Alberta and the federal laws of Canada applicable in such provinces, each as at the date hereof.

(b) In expressing the opinions set out in paragraph 1, we have obtained and relied upon a Certificate of Compliance dated June 2, 2005 issued by Industry Canada in respect of the Company, and have assumed, with your concurrence, that such certificate evidences that the Company has not been dissolved as of the date hereof.

(c) In expressing the opinions set out herein, we have not conducted any searches of public records for the purpose of providing such opinion.

(d) The opinions expressed below are given as at the date hereof. We expressly disclaim any obligation to advise those persons to whom this opinion is addressed of any matters (including without limitation any facts or circumstances or any subsequently enacted, published or reported laws, regulations or judicial decisions

having retroactive effect) which may come to our attention after the date hereof and which may affect any of the opinions set out herein.

(e) Reliance on these opinions after the date hereof must be on the assumption that there has been no change in the law or in the facts on which the opinions are based.

Assumptions

In the course of the foregoing investigations and examinations, we have assumed the genuineness of all signatures, the legal capacity at all relevant times of any natural persons signing any documents, the authenticity of all documents submitted to us as originals, the conformity to authentic originals of all documents submitted to us as certified or true copies or as reproductions (including documents received by facsimile machine) and the accuracy of all certificates of public officials and corporate officers.

Based on the foregoing and subject to the qualifications and limitations set forth herein, and having due regard for such legal considerations as we deem necessary, we are of the opinion that:

1. The Company has been incorporated under the laws of Canada, and has not been dissolved and the Company has all the necessary corporate power and authority to own property and to conduct business and to execute and deliver, and to perform all its obligations under the Exchange Notes.

2. Each of the Original Notes and the Exchange Notes to be issued in exchange for the Original Notes in accordance with the terms of the Exchange Offer have been validly authorized by the Company.

This opinion is given solely for the use of the parties to whom it is addressed and only in connection with the Exchange Offer and we hereby consent to the attachment of this opinion to the opinion of Bracewell & Guiliani LLP, as part of the filing of such opinion as an Exhibit 5 to the Registration Statement, and the filing of this opinion as an Exhibit 5 to the Registration Statement, with the United States Securities and Exchange Commission. We also consent to the reference to our firm under the heading “Validity of the Exchange Notes” in the Prospectus included in the Registration Statement. By giving such consent, we do not admit that we are experts with respect to any part of the Registration Statement, including any Exhibit 5 wherein this opinion is included, within the meaning of the term “expert” as used in the Securities Act or the rules or regulations thereunder.

Yours truly,

BORDEN LADNER GERVAIS LLP

2

EX-10.1

EXHIBIT 10.1

CREDIT AGREEMENT

DATED AS OF MAY 19, 2005

AMONG

NORTH AMERICAN ENERGY PARTNERS INC.

as Borrower,

THE LENDERS LISTED HEREIN,

as Lenders,

BNP PARIBAS (CANADA),

as Administrative Agent

and

GE CANADA FINANCE HOLDING COMPANY,

as Collateral Agent

TABLE OF CONTENTS

	Page No.
SECTION 1. DEFINITIONS	2
1.1 Certain Defined Terms	2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement	35
1.3 Other Definitional Provisions and Rules of Construction	36
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS	36
2.1 Revolving Loan Commitments; Making of Loans; the Register	36
2.2 Interest on the Loans	43
2.3 Fees	46
2.4 Repayments; Voluntary and Mandatory Prepayments; Application of Proceeds	46
2.5 Use of Proceeds	54
2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality	54
2.7 Statement of Lenders; Obligation of Lenders to Mitigate	56
2.8 Replacement of a Lender	57
2.9 Illegality	58
SECTION 3. BANKERS’ ACCEPTANCES	58
3.1 Acceptance of Bankers’ Acceptances; Form and Execution	58
3.2 Power of Attorney; Provision of Bankers’ Acceptances to Lenders	60
3.3 Mechanics of Issuance	62
3.4 Rollover of Bankers’ Acceptances	63
3.5 Conversion into Bankers’ Acceptances	63
3.6 Conversion from Bankers’ Acceptances	63
3.7 BA Equivalent Advances	63
3.8 Termination of Bankers’ Acceptances	64
3.9 Stamping Fees	64
3.10 No Issuance, Conversion or Rollover during Default	64
SECTION 4. LETTERS OF CREDIT	65
4.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein	65

i

4.2 Letter of Credit Fees	67
4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit	68
4.4 Obligations Absolute	71
4.5 Nature of Issuing Lenders’ Duties	72
SECTION 5. SECURITY	72
5.1 Collateral Documents	72
5.2 Registration	73
5.3 Sharing Collateral Documents	74
5.4 Form of Collateral Documents	75
5.5 After-Acquired Property	75
5.6 Continuing Collateral Documents	76
5.7 Dealing with Collateral Documents	76
5.8 Effectiveness	76
5.9 Release and Discharge of Collateral Documents	77
5.10 Transfer of Collateral Documents	77
SECTION 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT	77
6.1 Conditions to Closing	77
6.2 Conditions to All Loans	83
6.3 Conditions to Letters of Credit	84
6.4 Waiver	85
SECTION 7. COMPANY’S REPRESENTATIONS AND WARRANTIES	85
7.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries	85
7.2 Authorization of Borrowing, etc.	86
7.3 Financial Condition	87
7.4 No Material Adverse Change; No Restricted Junior Payments	87
7.5 Title to Properties; Liens; Real Property; Intellectual Property	87
7.6 Litigation; Adverse Facts	89
7.7 Payment of Taxes	89
7.8 Performance of Agreements; Material Contracts	89
7.9 Benefit Plans	90
7.10 Certain Fees	90
7.11 Environmental Protection	90

ii

7.12 Employee Matters	91
7.13 Solvency	91
7.14 Matters Relating to Collateral	91
7.15 Disclosure	92
7.16 Related Documents	92
7.17 Accounts	92
7.18 Compliance with Existing Senior Notes	93
7.19 Deemed Repetition	93
SECTION 8. COMPANY’S AFFIRMATIVE COVENANTS	93
8.1 Financial Statements and Other Reports	93
8.2 Existence, etc.	99
8.3 Payment of Taxes and Claims; Tax	99
8.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds	100
8.5 Inspection Rights; Lender Meeting	102
8.6 Compliance with Laws, etc.	103
8.7 Environmental Matters	103
8.8 First Priority Liens	105
8.9 Execution of Subsidiary Guarantee; Collateral Documents After the Closing Date; Further Assurances	105
8.10 Cash Management	107
SECTION 9. COMPANY’S NEGATIVE COVENANTS	109
9.1 Indebtedness	109
9.2 Liens and Related Matters	110
9.3 Investments; Acquisitions	112
9.4 Contingent Obligations	113
9.5 Restricted Junior Payments	114
9.6 Financial Covenants	115
9.7 Restriction on Fundamental Changes; Asset Sales	117
9.8 Transactions with Shareholders and Affiliates	118
9.9 Sales and Lease-Backs	119
9.10 Conduct of Business	119

iii

9.11 Amendments or Waivers of Certain Agreements	119
9.12 Fiscal Year	120
SECTION 10. EVENTS OF DEFAULT	120
10.1 Failure to Make Payments When Due	120
10.2 Default in Other Agreements	121
10.3 Breach of Certain Covenants	121
10.4 Breach of Warranty	121
10.5 Other Defaults Under Loan Documents	121
10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.	122
10.7 Voluntary Insolvency	122
10.8 Judgments and Attachments	123
10.9 Dissolution	123
10.10 Seizure	123
10.11 Change in Control	123
10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations	123
10.13 Conduct of Business By Holdings	124
10.14 Conduct of Business by Finance Co.	124
10.15 Amendment of Certain Documents of Holdings	124
SECTION 11. ADMINISTRATIVE AGENT AND COLLATERAL AGENT	125
11.1 Appointment	125
11.2 Powers and Duties; General Immunity	127
11.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness	128
11.4 Right to Indemnity	129
11.5 Successor Agents and Swing Line Lender	129
11.6 Collateral Documents and Guarantees	130
11.7 Duties of Other Agents	132
11.8 Administrative Agent May File Proofs of Claim	132
11.9 Borrowing Base Communication	133
SECTION 12. MISCELLANEOUS	133
12.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit	133

iv

12.2 Expenses	137
12.3 Indemnity	138
12.4 Set-Off; Security Interest in Deposit Accounts	140
12.5 Ratable Sharing	140
12.6 Amendments and Waivers	141
12.7 Independence of Covenants	143
12.8 Notices; Effectiveness of Signatures	143
12.9 Survival of Representations, Warranties and Agreements	144
12.10 Failure or Indulgence Not Waiver; Remedies Cumulative	144
12.11 Marshalling; Payments Set Aside	144
12.12 Severability	145
12.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver	145
12.14 Release of Subsidiary Guarantee	145
12.15 Release of Security Interest on Asset Disposition	146
12.16 Applicable Law	146
12.17 Construction of Agreement; Nature of Relationship	146
12.18 Consent to Jurisdiction and Service of Process	147
12.19 Waiver of Jury Trial	147
12.20 Confidentiality	148
12.21 Paramountcy; Superseding Effect	149
12.22 Counterparts; Effectiveness	149

v

EXHIBITS

I	FORM OF NOTICE OF BORROWING
II	FORM OF NOTICE OF CONVERSION/ROLLOVER
III	FORM OF REQUEST FOR ISSUANCE
IV	INTENTIONALLY LEFT BLANK
V	FORM OF BA DISCOUNT NOTE
VI	FORM OF BORROWING BASE CERTIFICATE
VII	FORM OF COMPLIANCE CERTIFICATE
VIII	INTENTIONALLY DELETED
IX	FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
X	FORM OF FINANCIAL CONDITION CERTIFICATE
XI	FORM OF SUBSIDIARY GUARANTEE
XII	FORM OF HOLDINGS GUARANTEE
XIII	FORM OF DEBENTURE
XIV	FORM OF DEPOSIT INSTRUMENT
XV	FORM OF COMPANY PLEDGE AGREEMENT
XVI	FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVII	FORM OF HOLDINGS PLEDGE AGREEMENT
XVIII	FORM OF OPINION OF COMPANY COUNSEL
XIX	FORM OF OPINION OF FINANCE CO. COUNSEL
XX	FORM OF BORROWER GUARANTEE
XXI	FORM OF INTERCREDITOR AGREEMENT
XXII	FORM OF BLOCKED ACCOUNT AGREEMENT

SCHEDULES

1.1	LENDER HEDGE AGREEMENTS
1.2	EXISTING BNPPC LETTERS OF CREDIT
2.1	LENDERS’ COMMITMENTS AND PRO RATA SHARES
7.1	SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
7.5B	REAL PROPERTY INTERESTS
7.5C	MATERIAL SERIAL NUMBER EQUIPMENT
7.5D	INTELLECTUAL PROPERTY
7.8	MATERIAL CONTRACTS
8.10	CASH MANAGEMENT ACCOUNTS
9.1	EXISTING INDEBTEDNESS
9.2	PERMITTED LIENS
9.3	EXISTING INVESTMENTS
9.4	CONTINGENT OBLIGATIONS

NORTH AMERICAN

ENERGY PARTNERS INC.

CREDIT AGREEMENT

This CREDIT AGREEMENT is dated as of May 19, 2005 and entered into by and among NORTH AMERICAN ENERGY PARTNERS INC., a Canadian corporation (“Company”), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a “Lender” and collectively as “Lenders”), BNP PARIBAS (CANADA), as administrative agent for Lenders (in such capacity, “Administrative Agent”) and GE CANADA FINANCE HOLDING COMPANY, as collateral agent (the “Collateral Agent”).

RECITALS

WHEREAS, from and after the Closing Date (this and other capitalized terms used in these recitals without definition being used as defined in subsection 1.1), Lenders, at the request of Company, have agreed to extend a revolving credit facility to Company, the proceeds of which will be used to provide financing for working capital and other general corporate purposes of Company and its Subsidiaries;

WHEREAS, on or before the Closing Date, Company will issue and sell not less than U.S.$60,481,000 in aggregate principal amount of Senior Second Lien Secured Notes;

WHEREAS, on or before the Closing Date, Company will issue and sell not less than $7,500,000 in Series B New Preferred Stock to certain shareholders of Parent or their Affiliates pursuant to the Equity Issuance.

WHEREAS, on the Closing Date, Company will apply the proceeds of the Senior Second Lien Secured Notes to repay all outstanding Indebtedness under the Existing Credit Agreement;

WHEREAS, Company desires to secure all of the Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, a First Priority Lien on all of its present and after acquired real and personal property, including all of the capital stock of its Subsidiaries; and

WHEREAS, all of the Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guarantees by granting to Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, a First Priority Lien on all of their real and personal property, including a pledge of all of the capital stock of their Subsidiaries, and Holdings has agreed to guarantee the Obligations hereunder, with recourse limited to a pledge by Holdings of the capital stock of Company;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Company, Lenders, Collateral Agent and Administrative Agent agree as follows:

Section 1. DEFINITIONS

1.1 Certain Defined Terms.

The following terms used in this Agreement shall have the following meanings:

“Acquisition Agreement” means that certain Purchase Agreement among Norama Ltd. and NAEL, as sellers, Martin Gouin and Roger Gouin, as Principals, and NACG Preferred Corp. and NACG Acquisition Inc., as Buyers, entered into as of October 31, 2003.

“Administrative Agent” has the meaning assigned to that term in the introduction to this Agreement and also means and includes any successor Administrative Agent appointed pursuant to subsection 11.5A.

“Advisory Services Agreement” means the letter Advisory Services Agreement dated November 21, 2003 among the Permitted Holders, the Company, NACG, Parent, Holdings and each of their present and future direct and indirect wholly-owned subsidiaries;

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“After-Acquired Property” has the meaning assigned to that term in subsection 5.5.

“Agents” means Administrative Agent and Collateral Agent.

“Agreement” means this Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time.

“Applicable Law” means any and all laws, regulations, ordinances, or other legally binding rules, judgments, orders, decrees, permits, concessions, grants, franchises or governmental restrictions issued or promulgated by a Governmental Authority and applicable to the matter in question.

“Approved Fund” means a Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

2

“Asset Sale” means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its wholly-owned Subsidiaries that is a Subsidiary Guarantor of:

(i) any of the Capital Stock of any of Company’s Subsidiaries,

(ii) all or substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or

(iii) any other assets (whether tangible or intangible) of Company or any of its Subsidiaries other than:

(a) inventory sold in the ordinary course of business,

(b) sales, assignments, transfers or dispositions of accounts in the ordinary course of business for purposes of collection,

(c) asset dispositions permitted by clauses (iii) (as to obsolete and worn out property only), (v), (vi) or (vii) of subsection 9.7, and

(d) any such other assets to the extent that (I) the aggregate value of such assets sold in any single transaction or related series of transactions is equal to or less than Cdn. $2,500,000, (II) the aggregate value of such assets sold in any consecutive 12 month period is equal to or less than Cdn. $5,000,000, and (III) the aggregate value of such assets sold from the Closing Date to the date of determination is equal to or less than Cdn. $15,000,000, provided, however, that if Company has provided an Officer’s Certificate as contemplated in subclause 2.4A(iii)(a)(2), and is otherwise in compliance with clauses 2.4A(iii)(a) and 9.7(iv), such sale of assets shall constitute an Asset Sale and shall not count against the amounts set forth in this clause (d), in each case to the extent of the Net Asset Sale Proceeds which are the subject of such Officer’s Certificate.

“Assignment Agreement” means an Assignment and Assumption Agreement in substantially the form of Exhibit IX annexed hereto.

“BA Discount Note” means a non-interest bearing promissory note of Company, denominated in Cdn. Dollars, issued by Company to a Non-Acceptance Lender as part of an issuance of Bankers’ Acceptances, and substantially in the form attached as Exhibit V or such other form as may be agreed to by the Administrative Agent, Company and such Non-Acceptance Lender.

“BA Discount Proceeds” means, in respect of any Bankers’ Acceptance, the amount obtained by multiplying (a) the aggregate face amount of such Bankers’ Acceptance by (b) the amount (rounded up or down to the fifth decimal place with .000005 being rounded up) determined by dividing one by the sum of one plus the product of (i) the BA Discount Rate, and (ii) a fraction, the numerator of which is the number of days in the BA Interest Period of such Bankers’ Acceptance and the denominator of which is 365.

3

“BA Discount Rate” means:

(i) in relation to a Bankers’ Acceptance accepted by a Schedule I Lender, the CDOR Rate;

(ii) in relation to a Bankers’ Acceptance accepted by a Schedule II Lender or Schedule III Lender, the lesser of:

(a) the average Discount Rate applicable to such issue as quoted by the Schedule II Reference Lenders; and

(b) the CDOR Rate plus 0.10% per annum;

provided that if both such rates are equal, then the “BA Discount Rate” applicable thereto shall be the rate specified in (ii)(a) above; and

(iii) in relation to a BA Equivalent Advance:

(a) made by a Schedule I Lender, the CDOR Rate; and

(b) made by a Lender which is not a Schedule I Lender, the rate determined in accordance with subparagraph (ii) of this definition.

“BA Equivalent Advance” means, in relation to a borrowing of, Conversion into or Rollover of Bankers’ Acceptances, a Loan in Cdn. Dollars made by a Non-Acceptance Lender as part of such Loan, as provided in Section 3.7.

“BA Interest Period” means, with respect to each Bankers’ Acceptance, the period selected by Company hereunder and being of 1, 2, 3 or 6 months’ duration, subject to market availability (or, subject to the agreement of the Lenders, a longer or shorter period) commencing on the date of borrowing, Rollover or Conversion in respect thereof, provided that:

(i) the last day of each BA Interest Period shall be also the first day of the next BA Interest Period in the case of a Rollover; and

(ii) the last day of each BA Interest Period shall be a Business Day.

“Bankers’ Acceptance” means a non-interest bearing draft drawn by Company in Cdn. Dollars, accepted by a Lender and issued for value pursuant to this Agreement and includes a depository bill under the DBNA and a bill of exchange under the Bills of Exchange Act (Canada).

“Bankruptcy Law” means (i) the Bankruptcy and Insolvency Act (Canada), the Companies Creditors’ Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), (ii) Title 11 of the United States Code entitled “Bankruptcy”, and (iii) any analogous laws relating to bankruptcy and insolvency, each as now and hereafter in effect, or any successor statute.

4

“Benefit Plan” means any employee benefit plan, including pensions, maintained by Company or any of its Subsidiaries that is mandated or governed by any Applicable Law.

“Blocked Account Agreement” means any blocked account agreement delivered pursuant to Section 8.10.

“Board of Directors” means, as to any Person, the board of directors (or similar governing body) of such Person or any duly authorized committee thereof.

“Bonding Program” means one or more agreements with one or more bonding companies under which bonding companies provide, for the account of Company and/or its Subsidiaries, bid bonds, performance bonds, labour and material payment bonds, maintenance bonds and other bonds used in the ordinary course of business of Company and its Subsidiaries, as the same may be amended, modified or replaced (including with another bonding company) from time to time.

“Borrowing Availability” means, as of any date of determination, the lesser of (i) the amount of the Revolving Loan Commitments as of such date, less the Total Utilization of Revolving Loan Commitments, and (ii) the Borrowing Base as of such date, less the First Lien Exposure.

“Borrowing Base” means, as at any date of determination, an aggregate amount equal to:

(i) the lesser of (A) 85% of the NOLV for Consolidated PP&E, (B) 60% of the book value of Consolidated PP&E, and (C) Cdn. $110,000,000, plus

(ii) 75% of the value of Eligible Accounts Receivable;

less any Reserves.

“Borrowing Base Certificate” means a certificate substantially in the form of Exhibit VI annexed hereto delivered to Administrative Agent and Collateral Agent by Company pursuant to subsection 8.1(xiv), with appropriate attachments.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of Alberta, Ontario or Quebec, or is a day on which banking institutions located in either such province are authorized or required by Applicable Law or other governmental action to close.

“Canadian Dollars”, “Cdn. Dollars”, “Cdn. $” and the sign “$” (unless otherwise specified) mean the lawful money of Canada.

“Capital Lease”, as applied to any Person, means any lease of any property (whether real or personal) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

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“Capital Stock” means the capital stock or other equity interests of a Person.

“Cash” means money, currency or a credit balance in a Deposit Account.

“Cash Equivalents” means, as at any date of determination,

(i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the Government of Canada or the United States Government, or (b) issued by any agency of Canada or the United States, the obligations of which are guaranteed by the Government of Canada or backed by the full faith and credit of the United States, respectively, in each case maturing within one year after such date;

(ii) marketable direct obligations issued by any province of Canada or state of the United States of America, or any political subdivision of either, or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either Standard & Poor’s (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”);

(iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P, at least P-1 from Moody’s, or at least R-1 high from Dominion Bond Rating Service Limited;

(iv) deposits at or financial instruments issued by any Canadian chartered bank which has a long-term debt rating of at least A+ by S&P, A1 by Moody’s or A(high) by Dominion Bond Rating Service Limited;

(v) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender, or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia, if such commercial bank (a) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than U.S.$100,000,000; and

(vi) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) through (v) above, and (b) has net assets of not less than Cdn. $500,000,000.

“CDOR Rate” means, on any date which Bankers’ Acceptances are to be issued pursuant hereto, the per annum rate of interest which is the rate determined as being the arithmetic average of the annual yield rates applicable to Cdn. Dollar bankers’ acceptances having identical issue and comparable maturity dates as the Bankers’ Acceptances proposed to be issued by Company displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuters Monitor Money Rates Service as at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day, then

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on the immediately preceding Business Day (as adjusted by Administrative Agent in good faith after 10:00 a.m. (Toronto time) to reflect any error in a posted rate or in the posted average annual rate), provided if such a rate does not appear on such CDOR Page, then the CDOR Rate, on any day, shall be the Discount Rate quoted by Administrative Agent determined as of 10:00 a.m. (Toronto time) on such day which would be applicable in respect of an issue of bankers’ acceptances in a comparable amount and with comparable maturity dates to the Bankers’ Acceptances proposed to be issued by Company on such day, or if such day is not a Business Day, then on the immediately preceding Business Day.

“Change in Control” means any of the following:

(i) any Person or group (as such term is used in section 13(d) of the Exchange Act) of Persons (other than a Permitted Holder and any entity formed by a Permitted Holder solely for the purpose of owning Capital Stock of Holdings) shall become the beneficial owner, directly or indirectly (with beneficial ownership being as defined and calculated as set forth in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), of shares representing more than 50% of the Capital Stock (measured by voting power rather than number of shares) that is at the time entitled to vote for the election of the Board of Directors of Holdings or the Company;

(ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company or Holdings (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company or Holdings, as applicable, was approved by a vote of a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason (other than death or disability) to constitute a majority of the Board of Directors then in office;

(iii) the failure at any time of Holdings to legally and beneficially own and control 100% of the issued and outstanding shares of capital stock of Company (other than the New Preferred Stock held by common shareholders of Parent or their Affiliates) or the failure at any time of Holdings to have the ability to elect all of the Governing Body of Company or the failure at any time of Company to legally and beneficially own and control 100% of the issued and outstanding shares of capital stock of NACG;

(iv) there is a report filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as the term “offeror” is defined in Section 89(1) of the Securities Act (Ontario) for the purpose of Section 101 of the Securities Act (Ontario), or any successor provision to either of the foregoing), other than the Company, any Subsidiary Guarantor or any employee benefit plan of either the Company, any Subsidiary Guarantor, or any Permitted Holder has acquired beneficial ownership (within the meaning of the Securities Act (Ontario)) of, or the power to exercise control or direction over, any Capital Stock or Securities convertible into, any Capital Stock of the Company, that together with such offeror’s securities (as the term “offeror’s securities” is defined in Section 89(1) of the Securities Act (Ontario) or any

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successor provision thereto in relation to the Capital Stock of the Company) would constitute voting stock of the Company representing more than 50% of the total voting power attached to all voting stock of the Company then outstanding; and

(v) the occurrence of any “Change of Control” as defined in the Senior Second Lien Secured Note Indenture or the Senior Note Indenture.

As used herein, the term “beneficially own” or “beneficial ownership” shall have the meaning set forth in clause (i) above.

“Clearing House” shall have the meaning ascribed thereto in the DBNA, including for certainty The Canadian Depository For Securities Limited or its nominee, CDS & Co.

“Closing Date” means the date on which all conditions set forth in Section 6.1 are satisfied or waived.

“Closing Date Mortgaged Property” has the meaning set forth in subsection 6.1J.

“Closing Date Mortgages” has the meaning set forth in subsection 6.1J.

“Collateral” means, collectively, all of the real and personal property (including Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations and the Secured Swap Obligations.

“Collateral Account” means an interest-bearing bank account in the name of Administrative Agent, with all amounts on deposit therein being the subject of a First Priority Lien in favour of the Collateral Agent pursuant to the Debenture of the Company.

“Collateral Agent” has the meaning assigned to that term in recitals to this Agreement and also means and includes any successor Collateral Agent appointed pursuant to subsection 11.5A.

“Collateral Documents” means the Mortgages, the Deposit Instruments, the Holdings Pledge Agreement, the Company Pledge Agreement, the Subsidiary Pledge Agreements, and all other instruments or documents delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant to Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, a First Priority Lien on any real or personal property of that Loan Party as security for the Obligations and the Secured Swap Obligations.

“Company” has the meaning assigned to that term in recitals to this Agreement.

“Company Pledge Agreement” means the Securities Pledge Agreement executed and delivered by Company on or after the Closing Date, substantially in the form of Exhibit XV annexed hereto, as such Company Pledge Agreement may thereafter be amended,

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supplemented or otherwise modified from time to time in accordance herewith, including by the further pledge of Capital Stock from time to time in accordance herewith.

“Compliance Certificate” means a certificate substantially in the form of Exhibit VII annexed hereto.

“Consolidated Capital Expenditures” means, for any period, the sum of the aggregate of all expenditures paid in cash by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of Company and its Subsidiaries. For purposes of this definition, the purchase price of equipment that is purchased (a) simultaneously with the trade-in of existing equipment, or (b) with insurance proceeds, shall be included in Consolidated Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be. The aggregate of the net cash proceeds of dispositions of assets by Company and its Subsidiaries during the period that, in conformity with GAAP, were included in “dispositions of property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of Company and its Subsidiaries, will be deducted from Consolidated Capital Expenditures for the period. For the purposes of Section 9.6A, Company may exclude from Consolidated Capital Expenditures the amounts actually expended in fiscal year April 1, 2005 to March 31, 2006 to construct an onsite maintenance facility required in order to carry out its obligations under its existing contract with Canadian Natural Resources Limited, up to a maximum amount of $15,500,000.

“Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period, excluding any interest expense not payable in Cash (such as non-cash amortization and write-off of discount and debt issuance costs).

“Consolidated Current Assets” means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis which may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis which may properly be classified as current liabilities in conformity with GAAP, excluding the current portions of Funded Debt and Capital Leases.

“Consolidated EBITDA” means, for any period, the sum, without duplication, of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv) total depreciation expense, (v) total amortization expense, (vi) costs and expenses incurred by Company in entering into this Agreement, issuing the Senior Second Lien Secured Notes and repaying the obligations under the Existing Credit Agreement (including the write-off of any deferred financing costs), (vii) accrual of stock based compensation expense to the extent not paid in cash, (viii) payment made to PricewaterhouseCoopers and MacLeod Dixon LLP with respect to work performed prior to the Closing Date on behalf of the lenders under the Existing Credit Agreement, and (ix) cost and

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expenses incurred by the Company in connection with the Equity Issuance in an aggregate amount not to exceed $200,000, and (x) other non-cash items (other than any such non-cash item to the extent it represents an accrual of or reserve for cash expenditures in any future period), but only, in the case of clauses (ii)-(x), to the extent deducted in the calculation of Consolidated Net Income, less other non-cash items added in the calculation of Consolidated Net Income (other than any such non-cash item to the extent it will result in the receipt of cash payments in any future period), all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital Adjustment minus (ii) the sum, without duplication, of the amounts for such period of (A) voluntary and scheduled repayments of Consolidated Total Debt (excluding repayments of Revolving Loans except to the extent the Revolving Loan Commitments are permanently reduced in connection with such repayments), (B) Consolidated Capital Expenditures (net of any proceeds of any related financings with respect to such expenditures other than Revolving Loans), (C) Consolidated Cash Interest Expense, and (D) current taxes based on income of Company and its Subsidiaries and paid in cash with respect to such period.

“Consolidated Fixed Charges” means, for any period, the sum (without duplication) of the amounts for such period of (i) Consolidated Cash Interest Expense, (ii) scheduled principal payments in respect of Consolidated Total Debt, (iii) current taxes based on income of Company and its Subsidiaries and paid in cash with respect to such period, (iv) Restricted Junior Payments, (v) the aggregate amount of all rents paid or payable during that period under all Capital Leases to which Company or any of its Subsidiaries is a party (for certainty, excluding the interest portion to the extent included by (i) above), and (vi) Consolidated Capital Expenditures, all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries in conformity with GAAP.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, net costs under Interest Rate Agreements and amounts referred to in subsection 2.3 payable to Administrative Agent and Lenders that are considered interest expense in accordance with GAAP, but excluding any such amounts referred to in subsection 2.3 payable on or before the Closing Date.

“Consolidated Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) Consolidated Total Debt as at such day to (b) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day.

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“Consolidated Net Income” means, for any period, the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, provided that there shall be excluded:

(i) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except in the case of income to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during such period,

(ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Company or is merged into or consolidated with Company or any of its Subsidiaries or that Person’s assets are acquired by Company or any of its Subsidiaries,

(iii) the income of any Subsidiary of Company that is not a Subsidiary Guarantor to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its Organizational Documents or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary,

(iv) any after-tax gains or losses attributable to asset sales or returned surplus assets of any pension plan,

(v) to the extent not included in clauses (i) through (iv) above, any net extraordinary gains or net non-cash extraordinary losses, and

(vi) the impact of currency translation gains and losses and mark-to-market gains and losses on any Hedge Agreement.

“Consolidated PP&E” means, as at any date of determination, the assets (net of depreciation) of Company and its Subsidiaries on a consolidated basis which may properly be classified as property, plant and equipment in conformity with GAAP, excluding any assets subject to a Lien in favour of any Person other than Collateral Agent for the benefit of the Lenders that ranks pari passu with or ahead of the Liens created by the Collateral Documents, to the extent of the lesser of the fair market value of such asset and the amount secured by such Lien.

“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP (with the amount of any such Indebtedness incurred in any currency other than Canadian Dollars, to the extent of the principal amount hedged pursuant to a Currency Agreement, determined by reference to the exchange rate between such currency and Canadian Dollars set forth in such Currency Agreement as the basis for determining the respective parties obligations thereunder).

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“Consolidated Working Capital” means, as at any date of determination, the excess (or deficit) of Consolidated Current Assets over Consolidated Current Liabilities.

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

“Contingent Obligation”, as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (but without duplication):

(i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof,

(ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings, or

(iii) under Hedge Agreements.

Contingent Obligations shall include (a) the direct or indirect guarantee, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.

“Contractual Obligation”, as applied to any Person, means any provision of any contract, undertaking, agreement, indenture, mortgage, deed of trust or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject, or any provision of any Securities issued by that Person.

“Conversion” means the conversion or deemed conversion of a Loan to another type of Loan in accordance with Section 2.2C and in the case of Bankers’ Acceptances, Section 3,

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in each case, or otherwise as occurs automatically hereunder, but in any case under the same credit facility under which the original Loan was made.

“Currency Agreement” means any foreign exchange contract, or any, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, in each case to which Company or any of its Subsidiaries is a party.

“DBNA” means the Depository Bills and Notes Act (Canada).

“Debenture” means a Fixed and Floating Charge Debenture executed and delivered by the Company and each Subsidiary Guarantor, substantially in the form of Exhibit XIII annexed hereto, as such Debenture may thereafter be amended, supplemented or otherwise modified from time to time.

“Deposit Account” means a demand, time, savings, passbook or similar account maintained with a Person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.

“Deposit Instrument” means a deposit agreement in respect of each Debenture executed and delivered by the Company and each Subsidiary Guarantor, substantially in the form of Exhibit XIV annexed hereto, as such Deposit Instrument may thereafter be amended, supplemented or otherwise modified from time to time.

“Desktop Appraisal” means the desktop appraisal of Consolidated PP&E performed by Century Services, Inc. dated April 7, 2005.

“Discount Rate” means, with respect to the issuance of a bankers’ acceptance in the Canadian bankers’ acceptance market, the rate of interest per annum, calculated on the basis of a year of 365 days (rounded upwards, if necessary, to the nearest whole multiple of 1/100th of one percent) which is equal to the discount exacted by a purchaser taking initial delivery of such bankers’ acceptance, calculated as a rate per annum and as if the issuer thereof received the discount proceeds in respect of such bankers’ acceptance on its date of issuance and had repaid the respective face amount of such bankers’ acceptance on the maturity date thereof.

“Domestic Subsidiary” means any Subsidiary of Company that is incorporated or organized under the laws of Canada or any province of territory thereof.

“Eligible Accounts Receivable” means, with respect to Company and its Subsidiaries, the accounts receivable of Company and its Subsidiaries acceptable to each of the Collateral Agent and the Administrative Agent, for inclusion in the calculation of the Borrowing Base. In determining the amount to be so included, the face amount of such accounts receivable shall be reduced by the amount of all returns, discounts, deductions, claims, credits, charges, or other allowances. Unless otherwise approved in writing by Collateral Agent and Administrative Agent, an account receivable shall not be an Eligible Account Receivable if:

(i) it arises out of a sale made by such Loan Party to an Affiliate of such Loan Party or any other Loan Party;

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(ii) its payment terms are longer than 60 days from date of invoice,

(iii) it is unpaid more than 120 days from date of invoice;

(iv) it is from the same account debtor or its Affiliate and 25% or more of all accounts receivable from that account debtor (and its Affiliates) are ineligible under (iii) above;

(v) the account debtor for such account receivable is a creditor of Company or any Subsidiary of Company and has asserted in writing a right of setoff against Company or any Subsidiary of Company, or has disputed its liability or otherwise has made any claim with respect to such account receivable or any other account receivable which has not been resolved, in each case to the extent of the amount of such asserted right of setoff, or the amount of such dispute or claim, as the case may be;

(vi) the account debtor has filed a petition or commenced a voluntary case under any applicable Bankruptcy Laws, as now constituted or hereafter amended, or any similar law in any other jurisdiction or made an assignment for the benefit of creditors, or if a decree or order for relief has been entered by a court having jurisdiction over the account debtor in an involuntary case under such Bankruptcy Laws, or if any other petition or other application for relief under such Bankruptcy Laws has been filed by or against the account debtor, or if the account debtor has failed, suspended business, declared itself to be insolvent, is unable to pay its debts as they become due (or has admitted same in writing) or has consented to or suffered a receiver, receiver-manager, trustee, liquidator or custodian to be appointed for it or any portion of its assets or affairs;

(vii) such account receivable is not payable in Canadian Dollars or U.S. Dollars or the account debtor for such account receivable is located outside the United States or Canada, unless such account receivable is supported by an irrevocable letter of credit or accounts receivable insurance satisfactory to Administrative Agent and Collateral Agent (as to form, substance and issuer) and assigned to and directly drawable by Collateral Agent, or is otherwise supported on terms acceptable to Collateral Agent in its sole discretion;

(viii) the sale to the account debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval or consignment basis or made pursuant to any other written agreement providing for repurchase or return;

(ix) Collateral Agent determines by its own credit analysis that collection of such account receivable is reasonably uncertain or that such account receivable will likely not be paid (provided that for certainty, Collateral Agent shall have no obligation to do so);

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(x) the account debtor is a Canadian federal, provincial, municipal or local government, governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, unless such account receivable has been assigned to Collateral Agent on behalf of Lenders, Swap Lenders and Agents in accordance with all Applicable Laws;

(xi) the goods giving rise to such account receivable have not been shipped and delivered to and accepted by the account debtor, or the services giving rise to such account receivable have not been performed;

(xii) such account receivable does not comply with all requirements of Applicable Law such that its enforceability is not assured;

(xiii) such account receivable is subject to any adverse security deposit, progress payment or other similar advance made by or for the benefit of the applicable account debtor;

(xiv) such account receivable is not subject to a valid and perfected First Priority Lien in favor of Collateral Agent or does not otherwise conform to the representations and warranties contained in the Loan Documents;

(xv) such account receivable arises from progress billing on fixed price contracts where there is no definitive unit of measurement used as a basis for the billing other than an estimated percentage of completion; provided that an equipment or site mobilization fee shall not be considered a progress billing; or

(xvi) such account receivable is not evidenced by an invoice issued to the applicable account debtor.

“Eligible Assignee” means:

(i) any Lender, any Affiliate of any Lender and any Approved Fund of any Lender; and

(ii) (a) a commercial bank, insurance company or other financial institution organized under the laws of the United States or any state thereof, or under the laws of Canada; (b) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (c) a treasury branch or other financial institution carrying on substantially the same business as a bank and organized under the laws of a Province of Canada, or (d) a commercial bank organized under the laws of any other country or a political subdivision thereof,

provided that, in any case, unless an Eligible Assignee has become an assignee of Loans at a time when an Event of Default has occurred and is continuing, Company shall have no obligation under Section 2.6A to gross-up for Taxes withheld or paid solely because such Eligible Assignee

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is a non-resident of Canada within the meaning of the Income Tax Act unless Company otherwise agrees in writing to do so.

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, designation, finding, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (ii) in connection with any Hazardous Materials or any actual or alleged Hazardous Materials Activity, or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

“Environmental Laws” means any common law relating to environmental matters and all current or future statutes, ordinances, orders, rules, regulations, by-laws, judgments, Governmental Authorizations, or any other binding requirements of any Governmental Authority relating to (i) environmental matters, including those relating to any Hazardous Materials Activity, (ii) the generation, use, storage, transportation, recycling or disposal of Hazardous Materials, or (iii) occupational safety and health, industrial hygiene, land use or the protection of the environment, natural resources or human, plant or animal health, safety or welfare, in any manner applicable to Company or any of its Subsidiaries or any Facility.

“Equity Issuance” means the issuance by the Company of the New Preferred Stock on or before the Closing Date.

“Equity Issuance Documentation” means the definitive documentation relating to the Equity Issuance, in form and substance satisfactory to the Administrative Agent, the Collateral Agent and the Lenders. Without limiting the foregoing, such documentation shall, unless otherwise permitted by Section 9.11A, not contain any mandatory put, redemption, repayment, sinking fund or other required cash payment (other than a liquidation preference) prior to the date that is 91 days after the Revolving Loan Commitment Termination Date or any covenant or event of default (other than any covenant restricting payments by the Company with respect to the common stock of the Company in violation of the liquidation preference of the Equity Issuance).

“Event of Default” means each of the events set forth in Section 10.

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Existing BNPPC Letters of Credit” means the letters of credit described on Schedule 1.2.

“Existing Credit Agreement” means that certain Credit Agreement dated as of November 26, 2003 by and among Company, the financial institutions party thereto, BNP Paribas, as syndication agent, and Royal Bank of Canada, as administrative agent.

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“Facilities” means any and all real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Company or any of its Subsidiaries or any of their respective predecessors or Affiliates.

“Finance Co.” means NACG Finance LLC, a Delaware limited liability company.

“Financial Plan” has the meaning assigned to that term in subsection 8.1(ix).

“First Lien Exposure” means, at any time, the sum of (i) the Total Utilization of the Revolving Loan Commitments plus (ii) the total liabilities of the Company and its Subsidiaries under all Lender Hedge Agreements determined on a “mark to market” basis, provided that for the purpose of calculating First Lien Exposure, the amount of such liabilities under this clause (ii) shall not be less than zero.

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that (a) such Lien is perfected and has priority over any other Lien on, or adverse claim against, such Collateral, other than (for all purposes herein except the definition of “Eligible Accounts Receivable”) Liens created by the Company and its Subsidiaries as permitted by subsections 9.2A(i),(ii), and (iv), and (b) such Lien is the only Lien (other than Liens permitted pursuant to subsection 9.2A) to which such Collateral is subject.

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

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on March 31 of each calendar year. For purposes of this Agreement, any particular Fiscal Year may be designated by reference to the calendar year in which such Fiscal Year ends.

“Fronting Bank” means, in respect of the issuance of Letters of Credit, BNP PARIBAS (Canada) and any successor Fronting Bank appointed pursuant to subsection 11.5C.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“Funded Debt”, as applied to any Person, means all Indebtedness of that Person (including any current portions thereof) which by its terms or by the terms of any instrument or agreement relating thereto matures more than one year from, or is directly renewable or extendable at the option of that Person to a date more than one year from (including an option of that Person under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of one year or more from), the date of the creation thereof.

“Funding and Payment Office” means:

(i) in the case of the Administrative Agent (a) the office of BNP PARIBAS (Canada) as Administrative Agent located at 1981 McGill College Avenue, Montreal,

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Quebec H3A 2W8 Canada, as advised by BNP PARIBAS (Canada) to Company and Lenders in writing or (b) such other office of Administrative Agent as may from time to time hereafter be designated as such in a written notice delivered by Administrative Agent to Company and each Lender, and

(ii) in the case of the Swing Line Lender (a) the office of BNP PARIBAS (Canada) as Swing Line Lender located at 1981 McGill College Avenue, Montreal, Quebec H3A 2W8 Canada, as advised by BNP PARIBAS (Canada) to Company and Lenders in writing or (b) such other office of Swing Line Lender as may from time to time hereafter be designated as such in a written notice delivered by Swing Line Lender to Company and each Lender.

“Funding Date” means the date of the funding of a Loan, or the issuance of any Letter of Credit.

“GAAP” has the meaning assigned to that term in subsection 1.2.

“Governing Body” means the board of directors or other body having the power to direct or cause the direction of the management and policies of a Person that is a corporation, partnership, trust or limited liability company.

“Governmental Authority” means:

(i) any government, parliament or legislature, any municipal council or authority, or any government regulatory or administrative authority, agency, commission or board and any other statute, rule, regulation or bylaw making entity in each case having jurisdiction in the relevant circumstances;

(ii) any Person acting under the authority of any of the foregoing or under a statute, rule, regulation or bylaw thereof; and

(iii) any judicial, administrative or arbitral court, authority, tribunal or commission having jurisdiction in the relevant circumstances.

“Governmental Authorization” means any approval, certificate, franchise, permit, license, registration, authorization, plan, directive, consent, order or consent decree of or from, or notice to, any Governmental Authority.

“Guarantees” means the Holdings Guarantee and the Subsidiary Guarantee.

“Hazardous Materials” means (i) any chemical, material or substance at any time defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “hazardous recyclables”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”, “toxic substances”, or any other term or expression intended to define, list or classify substances by reason of properties harmful to the environment, natural resources, or human, plant or animal health safety or welfare

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(including harmful properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or words of similar import under any applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (iv) any flammable substances or explosives; (v) any radioactive materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the environment, natural resources or human, plant or animal health, safety or welfare or to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, whether intentional or unintentional, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, recycling, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement designed to hedge against fluctuations in interest rates or currency values, respectively.

“Holdings” means NACG Preferred Corp., a Canadian corporation.

“Holdings Certificate of Designations” means the provisions of Holdings’ Articles of Incorporation relating to the Holdings Preferred Stock, in the form delivered to Administrative Agent and Lenders prior to their execution of this Agreement and as such provisions may be amended from time to time thereafter to the extent permitted under subsection 9.11.

“Holdings Guarantee” means the limited recourse Guarantee executed and delivered by Holdings on the Closing Date substantially in the form of Exhibit XII annexed hereto, as such Holdings Guarantee may thereafter be amended, supplemented or otherwise modified from time to time in accordance herewith.

“Holdings Pledge Agreement” means the Securities Pledge Agreement executed and delivered by Holdings on the Closing Date, substantially in the form of Exhibit XVII annexed hereto, as such Holdings Pledge Agreement may thereafter be amended, supplemented or otherwise modified from time to time in accordance herewith.

“Holdings Preferred Stock” means 35,000 shares of 8% Series A Preferred Stock of Holdings with a liquidation preference of $1000 per share and with the other terms set forth in the Holdings Certificate of Designations.

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“Income Tax Act” means the Income Tax Act (Canada), and the regulations promulgated thereunder, as amended.

“Indebtedness”, as applied to any Person, means:

(i) all indebtedness for borrowed money,

(ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP,

(iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money,

(iv) any obligation owed for all or any part of the deferred purchase price of property or services which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument,

(v) Synthetic Lease Obligations, and

(vi) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person.

Obligations under Interest Rate Agreements and Currency Agreements constitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2) in all other cases, Investments, and in neither case constitute Indebtedness.

“Indemnified Liabilities” has the meaning assigned to that term in subsection 12.3.

“Indemnitee” has the meaning assigned to that term in subsection 12.3.

“Intellectual Property” means all patents, trademarks, tradenames, copyrights, technology, software, know-how and processes used in or necessary for the conduct of the business of Company and its Subsidiaries.

“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of May 19, 2005 by and between the Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, and Wells Fargo Bank, N.A. and Computershare Trust Company of Canada, collectively as the second lien collateral agent on behalf of the holders of the Senior Second Lien Secured Notes, in form and substance satisfactory to the Collateral Agent, the Agents and the Lenders.

“Interest Payment Date” means with respect to any Prime Rate Loan, the first Business Day of each month, commencing on the first such date to occur after the Closing Date.

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“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

“Investment” means:

(i) any direct or indirect purchase or other acquisition by Company or any of its Subsidiaries of, or of a beneficial interest in, any Securities of any other Person (including any Subsidiary of Company),

(ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Subsidiary of Company from any Person other than Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,

(iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Company or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales or services to that other Person in the ordinary course of business, or

(iv) Interest Rate Agreements or Currency Agreements not constituting Hedge Agreements.

Except for Investments specified in subclause (iv) above, which such Investments shall be valued at their mark-to-market value at the time of any such valuation, the amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment (other than adjustments for the repayment of, or the refund of capital with respect to, the original principal amount of any such Investment).

“IP Collateral” means, collectively, the Intellectual Property that constitutes Collateral under the Debenture.

“Issuing Lender”, with respect to any Letter of Credit, means the Revolving Lender that agrees or is otherwise obligated to issue such Letter of Credit, determined as provided in subsection 4.1B(ii).

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form.

“Lender” and “Lenders” means the Persons identified as “Lenders” and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 12.1B, and the term “Lenders” shall include Swing Line Lender unless the

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context otherwise requires, provided that the term “Lenders”, when used in the context of a commitment or subcommitment, shall mean Lenders having that commitment or subcommitment.

“Lender Hedge Agreements” means the Hedge Agreements described on Schedule 1.1 attached hereto.

“Letter of Credit” or “Letters of Credit” means Canadian Dollar standby letters of credit issued or to be issued by Issuing Lenders for the account of Company pursuant to subsection 4.1, for the purpose of supporting:

(i) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue or development bonds or financings,

(ii) workers’ compensation liabilities of Company or any of its Subsidiaries,

(iii) the obligations to insurers of Company or any of its Subsidiaries,

(iv) obligations with respect to Capital Leases or Operating Leases of Company or any of its Subsidiaries, and

(v) performance, payment, deposit or surety obligations of Company or any of its Subsidiaries (including under the Bonding Program), in any case in the ordinary course of the Loan Parties’ business.

“Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum aggregate amount which is available for drawing under all Letters of Credit then outstanding plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans pursuant to subsection 4.3B or otherwise reimbursed by Company.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

“Loan” or “Loans” means one or more Revolving Loans and for certainty includes extensions of credit made by way of Bankers’ Acceptances.

“Loan Documents” means this Agreement, Bankers’ Acceptances, BA Discount Notes, Letters of Credit (and any applications for, or reimbursement agreements or other documents executed by Company in favor of an Issuing Lender relating to, the Letters of Credit), the Guarantees, the Intercreditor Agreement, the Collateral Documents and any Blocked Account Agreement.

“Loan Party” means each of Holdings, Company and any of Company’s Subsidiaries from time to time executing a Loan Document, and “Loan Parties” means all such Persons, collectively.

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“Management Fees” means fees payable pursuant to the Advisory Services Agreement.

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors of the United States Federal Reserve System as in effect from time to time.

“Material Adverse Effect” means any of (i) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company and its Subsidiaries taken as a whole, or (ii) the impairment of the ability of the Loan Parties, taken as a whole, to perform the Obligations in any material way, or (iii) the impairment of the ability of Administrative Agent, the Collateral Agent or Lenders to enforce the Obligations. Losses incurred and expected to be incurred under the OPTI-Nexen Contract shall not constitute or give rise to a Material Adverse Effect so long as such losses do not exceed $15,000,000 in the aggregate.

“Material Contract” means any contract or other arrangement to which Company or any of its Subsidiaries is a party (other than the Loan Documents) for which breach, nonperformance, cancellation or failure to renew, as at the date of determination, could reasonably be expected to have a Material Adverse Effect.

“Mortgage” means:

(i) each Debenture,

(ii) any other security document (whether designated as a debenture, a deed of trust, a mortgage, a security agreement or any similar title) executed and delivered by any Loan Party in such form as may be approved by Collateral Agent in its sole discretion, in each case with such changes thereto as may be recommended by Administrative Agent’s local counsel based on local laws or customary local mortgage or deed of trust practices, or

(iii) at option of Collateral Agent, in the case of After-Acquired Property, an amendment or supplement to an existing Mortgage, in form satisfactory to Collateral Agent, adding such After-Acquired Property to any existing Mortgage in order to specifically describe it within the fixed charges thereof, in either case as such security instrument or amendment may be amended, supplemented or otherwise modified from time to time.

“NACG” means North American Construction Group Inc., a Canadian corporation.

“NAEL” means North American Equipment Ltd., an Alberta corporation.

“Net Asset Sale Proceeds”, with respect to any Asset Sale, means Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received from

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such Asset Sale, net of any bona fide direct costs (including professional fees and costs) incurred in connection with such Asset Sale, including (i) income taxes reasonably estimated to be actually payable within two years of the date of such Asset Sale as a result of any gain recognized in connection with such Asset Sale and (ii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale.

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds received by Company or any of its Subsidiaries (i) under any business interruption or casualty insurance policy in respect of a covered loss thereunder or (ii) as a result of the taking of any assets of Company or any of its Subsidiaries by any Person pursuant to the power of eminent domain, expropriation, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, in each case net of any actual and reasonable documented costs incurred by Company or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Company or such Subsidiary in respect thereof.

“Net Securities Proceeds” means the cash proceeds (net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses) from the (i) issuance of Capital Stock of or incurrence of Indebtedness by Holdings, Company or any of its Subsidiaries and (ii) capital contributions made by a holder of Capital Stock of Holdings or Company.

“New Preferred Stock” means the Series A New Preferred Stock and the Series B Preferred Stock, collectively.

“NOLV” means with respect to Consolidated PP&E, on any date, the orderly liquidation value net of liquidation costs of Consolidated PP&E determined by the most recent NOLV Appraisal delivered on or prior to such date.

“NOLV Appraisal” means an appraisal of the orderly liquidation value net of liquidation costs of Consolidated PP&E by an appraiser acceptable to Collateral Agent; without limiting the right of Collateral Agent to use any other appraiser in its sole discretion, Century Services, Inc. is acceptable to the Collateral Agent for the purposes of the initial NOLV Appraisal.

“Non-Acceptance Lender” means (i) a Lender which ceases to accept Bankers’ Acceptances in the ordinary course of its business or (ii) in respect of Lenders which are not Canadian chartered banks or Schedule III Lenders, a Lender who, by notice in writing to Administrative Agent and Company, elects thereafter to make BA Equivalent Advances in lieu of accepting Bankers’ Acceptances.

“Non-Consenting Lender” has the meaning assigned to that term in subsection 2.8.

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“Notice of Borrowing” means an irrevocable notice substantially in the form of Exhibit I annexed hereto.

“Notice of Conversion/Rollover” means an irrevocable notice substantially in the form of Exhibit II annexed hereto.

“Obligations” means all obligations of every nature of each Loan Party from time to time owed to Administrative Agent, Collateral Agent, Lenders or any of them under the Loan Documents, whether for principal (including BA Equivalent Advances, reimbursement of amounts paid under Bankers’ Acceptances, and reimbursement of drawings under Letters of Credit), interest, fees, expenses, indemnification or otherwise.

“Officer” means the president, chief executive officer, a vice president, chief financial officer, treasurer, general partner (if an individual), managing member (if an individual) or other individual appointed by the Governing Body or the Organizational Documents of a corporation, partnership, trust or limited liability company to serve in a similar capacity as the foregoing.

“Officer’s Certificate”, as applied to any Person that is a corporation, partnership or, trust or limited liability company, means a certificate executed on behalf of such Person by one or more Officers of such Person or one or more Officers of a general partner or a managing member if such general partner or managing member is a corporation, partnership, trust or limited liability company.

“Old System Issuer” means a Lender, other than a Non-Acceptance Lender, who elects not to accept Bankers’ Acceptances as depository bills under the DBNA.

“Operating Lease”, as applied to any Person, means any lease (including leases that may be terminated by the lessee at any time) of any property (whether real or personal) that is not a Capital Lease other than any such lease under which that Person is the lessor.

“OPTI-Nexen Contract” means the construction contract dated April 12, 2004 between OPTI Canada Inc. and Nexen Petroleum Canada, as owner, and North American Enterprises Ltd., as contractor, in connection with site preparation for the steam assisted gravity drainage processing facility, well pads, roads, flowlines and upgrader at the owner’s Long Lake Upgrader project near Ft. McMurray, Alberta.

“Organizational Documents” means the documents (including bylaws, if applicable) pursuant to which a Person that is a corporation, partnership, trust or limited liability company is organized.

“Parent” means NACG Holdings Inc., a Canadian corporation.

“Parent Common Stock” means the common stock of Parent.

“Participant” means a purchaser of a participation in the rights and obligations under this Agreement pursuant to subsection 12.1C.

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“Permitted Encumbrances” means the following types of Liens:

(i) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by subsection 8.3;

(ii) Liens imposed by law, such as statutory liens and deemed trusts, carriers’ liens, builders’ liens, warehousemen’s liens, mechanics’ liens, materialmen’s liens and other liens, privileges or other charges of a similar nature in each case incurred in the ordinary course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 10 days) are being contested in good faith by appropriate proceedings, so long as (1) such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, and (2) in the case of a Lien with respect to any portion of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral on account of such Lien;

(iii) Liens constituted by the delivery of bonds issued under the Bonding Program, or letters of credit, in any case provided in the ordinary course of business to secure the performance of bids, trade contracts, leases, government contracts, statutory obligations, and other similar obligations (exclusive of obligations for the payment of borrowed money), in any case so long as no other Liens are provided except as permitted under subsections 9.2(i),(ii) and (iv);

(iv) Liens provided in connection with workers’ compensation, unemployment insurance and other types of social security in the ordinary course of business, so long as no foreclosure, sale or similar proceedings have been commenced with respect thereto;

(v) Liens constituted by the delivery of an appeal bond posted with a court in connection with litigation to which the Company or a Subsidiary is subject, so long as no other Liens are provided except as permitted under subsections 9.2 (i), (ii) and (iv);

(vi) any attachment or judgment Lien not constituting an Event of Default under subsection 10.8;

(vii) Liens reserved in or exercisable under any real property lease for rent or otherwise to effect compliance with the terms of such lease, in respect of which the rent or other obligations (a) are not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 10 days) are being contested in good faith by appropriate proceedings, so long as (1) such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, and (2) in the case of a Lien with respect to any portion of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral on account of such Lien;

(viii) Liens in favour of a public utility or any municipality or governmental or other public authority when required by such utility, municipality or authority in

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connection with the operations of Company or Subsidiary, provided that all such Liens only secure (a) amounts not yet overdue or (b) amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 10 days) are being contested in good faith by appropriate proceedings, so long as (1) such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, and (2) in the case of a Lien with respect to any portion of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral on account of such Lien;

(ix) Liens granted pursuant to the Collateral Documents;

(x) Liens in favour of the Company or a Subsidiary Guarantor on assets of any Subsidiary of the Company;

(xi) any interest or title of a lessor under any Capital Lease, provided that such Liens do not extend to any property or assets which are not leased property subject to such Capital Lease; and

(xii) Liens incidental to current operations which have not at such time been filed pursuant to Applicable Law against the Company’s or a Subsidiary Guarantor’s assets, or which relate to obligations not due or delinquent.

“Permitted Holders” means The Sterling Group, L.P., Genstar Capital, L.P., Perry Strategic Capital Inc., Stephens Group, Inc., and their respective Affiliates (in each case, other than portfolio companies thereof).

“Permitted Joint Venture Investment” means a Joint Venture in the same or substantially the same business line of the Company in which Company or a Subsidiary Guarantor (a) owns at least 30% of the ownership interests, and (b) has the right to receive a percentage of the profits or distributions at least equal to the percentage of its ownership interest.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments (whether federal, state or local, domestic or foreign, and including political subclauses thereof) and agencies or other administrative or regulatory bodies thereof.

“Pledge Agreement” means the Holdings Pledge Agreement, the Company Pledge Agreement, Subsidiary Pledge Agreement, and any other share pledge agreement in substantially similar form executed and delivered from time to time under this Agreement.

“Pledged Collateral” means, collectively, the “Pledged Collateral” as defined in the Holdings Pledge Agreement, the Company Pledge Agreement, and the Subsidiary Pledge Agreements.

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“Potential Event of Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Prime Rate” means, for any day, the greater of:

(i) the rate of interest per annum established from time to time by Administrative Agent as the reference rate of interest for the determination of interest rates that Administrative Agent will charge to commercial customers in Canada for Cdn. dollar demand loans in Canada; and

(ii) the rate of interest per annum equal to the average annual yield rate for one month Cdn. dollar Bankers’ Acceptances (expressed for such purpose as a yearly rate per annum ) which rate is shown on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuters Monitor Money Rates Service at 10:00 a.m. (Toronto time) on such day or, if such day is not a Business Day, on the immediately preceding Business Day, plus 1.0% per annum.

“Prime Rate Loans” means Loans in Canadian Dollars bearing interest at rates determined by reference to the Prime Rate as provided in subsection 2.2A.

“Prior Claims” means all Liens created by applicable law (in contrast with Liens voluntarily granted) which rank or are capable of ranking prior to or pari passu with Collateral Agent’s Liens against all or part of the Collateral, including for amounts owing for employee source deductions, goods and services taxes, sales taxes, employer health taxes, municipal taxes, withholding taxes, vacation pay, workers’ compensation, pension fund obligations and overdue rents.

“Proceedings” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration.

“Pro Rata Share” means with respect to all payments, computations and other matters relating to the Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit issued or participations therein deemed purchased by any Lender or any assignments of any Swing Line Loans deemed purchased by any Lender, the percentage obtained by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to subsection 12.1. The initial Pro Rata Share of each Lender for purposes of the preceding sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed hereto.

“Refunded Swing Line Loans” has the meaning assigned to that term in subsection 2.1A(ii)(d).

“Register” has the meaning assigned to that term in subsection 2.1D.

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“Reimbursement Date” has the meaning assigned to that term in subsection 4.3B.

“Related Documents” means, collectively, the Acquisition Agreement, the Advisory Services Agreement, the Holdings Certificate of Designations, the Senior Note Indenture, the Senior Second Lien Secured Note Indenture, the Second Lien Collateral Documents and the Equity Issuance Documentation.

“Release” means any intentional or unintentional release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), including the movement of any Hazardous Materials through the air, soil, surface water or groundwater.

“Request for Issuance” means a request for the issuance of a Letter of Credit substantially in the form of Exhibit III annexed hereto.

“Requisite Lenders” means Lenders having or holding more than 66 2/3% of the sum of the aggregate Revolving Loan Exposure of all Lenders.

“Reserves” means reserves against the Borrowing Base established by Collateral Agent in its sole discretion, including without limitation, in respect of Prior Claims. Without limiting the generality of the foregoing, until such time as Collateral Agent has received and approved the initial NOLV Appraisal (for which Century Services, Inc. has been commissioned to perform as of the date hereof), the “Reserves” shall include a 10% appraised reserve against the NOLV as determined by the Desktop Appraisal.

“Restricted Junior Payment” means:

(i) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Company or its Subsidiaries now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class,

(ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company or its Subsidiaries now or hereafter outstanding,

(iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Company or its Subsidiaries now or hereafter outstanding, and

(iv) any voluntary or optional payment or prepayment of principal of, premium, if any, or voluntary or optional redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment of

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Indebtedness by the Company or its Subsidiaries unless it is with respect to (I) the Obligations, or (II) Indebtedness that is permitted by subclauses 9.1(ii), (iii), (v) and (viii),

other than in any case those made to the Company or a Subsidiary Guarantor. For certainty, (A) the issuance of any exchange notes containing substantially identical terms (except that such exchange notes will not contain terms with respect to transfer restrictions or the accrual of liquidated damages) to the Senior Second Lien Secured Notes exchanged for such exchange notes, as contemplated by the Senior Second Lien Secured Note Indenture, and (B) the acquisition and/or retirement of such Senior Second Lien Secured Notes or Senior Notes in connection with any such exchange (and not involving any payment in cash), shall not constitute a Restricted Junior Payment.

“Revolving Lender” means a Lender that has a Revolving Loan Exposure.

“Revolving Loan Commitment” means (i) the commitment of a Revolving Lender to make Revolving Loans to Company pursuant to subsection 2.1A(i), and in the case of the Swing Line Lender, to make Swing Line Loans pursuant to subsection 2.1A(ii), and in the case of each other Revolving Lender, to purchase assignments of Swing Line Loans pursuant to subsection 2.1A(ii), (ii) the commitment of Revolving Lenders to accept Bankers’ Acceptances pursuant to subsection 3.1A, and (iii) the commitment of Revolving Lenders to issue (or participate in) Letters of Credit pursuant to subsection 4.1, and “Revolving Loan Commitments” means such commitments of all Revolving Lenders in the aggregate.

“Revolving Loan Commitment Termination Date” means March 1, 2010.

“Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of any date of determination:

(i) prior to the termination of the Revolving Loan Commitments, that Lender’s Revolving Loan Commitment, and

(ii) after the termination of the Revolving Loan Commitments, the sum of:

(a) the aggregate outstanding principal amount of the Revolving Loans of that Lender, including the aggregate face amount of all outstanding Bankers’ Acceptances accepted by that Lender, and the aggregate face amount of all outstanding BA Equivalent Advances, in each case made by that Lender under the Revolving Loan Commitment, plus

(b) in the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (in each case net of any participations purchased by other Lenders in such Letters of Credit or in any unreimbursed drawings thereunder), plus

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(c) the aggregate amount of all participations purchased by that Lender in any outstanding Letters of Credit or any unreimbursed drawings under any Letters of Credit, plus

(d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any assignments thereof purchased by other Revolving Lenders), plus

(e) the aggregate amount of all assignments purchased by that Lender in any outstanding Swing Line Loans.

“Revolving Loans” means the Loans made by Revolving Lenders to Company pursuant to subsection 2.1A(i), by Swing Line Lender pursuant to subsection 2.1A(ii), and by Revolving Lenders in connection with Refunded Swing Line Loans pursuant to subsection 2.1A(ii).

“Rollover” means, with respect to Bankers’ Acceptances, the issuance of new Bankers’ Acceptances or the making of new BA Equivalent Advances (subject to the provisions hereof) in respect of all or any portion of Bankers’ Acceptances (or BA Equivalent Advances made in lieu thereof) maturing at the end of the BA Interest Period applicable thereto, all in accordance with Section 2.2C and Section 3.

“Schedule I Lender” means a Lender which is a Canadian chartered bank listed on Schedule I to the Bank Act (Canada).

“Schedule II Lender” means a Lender which is a Canadian chartered bank listed on Schedule II to the Bank Act (Canada).

“Schedule II Reference Lenders” means up to two Schedule II Lenders or Schedule III Lenders which are designated as such by Administrative Agent and Company from time to time (it being agreed that Administrative Agent and Company may at any time terminate the designation of a Lender as a Schedule II Reference Lender and designate another Schedule II Lender or Schedule III Lender as a Schedule II Reference Lender in its place by delivery to the Lenders of a written notification to such effect executed by Administrative Agent), provided that if a Person ceases to be a Lender hereunder, then such Person shall thereupon cease to be a Schedule II Reference Lender without further action.

“Schedule III Lender” means a Lender which is an authorized foreign bank listed on Schedule III to the Bank Act (Canada).

“Second Lien Collateral Documents” means each of the guarantees and security documents entered into by the Loan Parties in connection with the Senior Second Lien Secured Notes.

“Second Priority” means with respect to any Lien on the Collateral, Liens subordinated pursuant to the Intercreditor Agreement to the Liens thereon in favor of the

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Collateral Agent for the benefit of the Agents and the Lenders securing the Obligations and the Secured Swap Obligations.

“Secured Swap Obligations” means all indebtedness, obligations and liabilities of Company or any Subsidiary Guarantor under the Lender Hedge Agreements.

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated, certificated or uncertificated, or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“Securities Act” means the United States Securities Act of 1933, as amended from time to time, and any successor statute.

“Sellers” means Norama, Ltd. an Alberta corporation, and NAEL.

“Senior Note Indenture” means the indenture dated November 26, 2003 pursuant to which the Senior Notes are issued, as such indenture may be amended from time to time to the extent permitted under subsection 9.11.

“Senior Notes” means the U.S.$200,000,000 in aggregate principal amount of Senior Notes due 2011 of Company issued pursuant to the Senior Note Indenture, and any exchange notes containing substantially identical terms issued as contemplated in the Senior Note Indenture (except that such exchange notes will not contain terms with respect to transfer restrictions or the accrual of liquidated damages).

“Senior Second Lien Secured Note Indenture” means the indenture dated May 19, 2005 pursuant to which the Senior Second Lien Secured Notes are issued, as such indenture may be amended from time to time to the extent permitted under subsection 9.11.

“Senior Second Lien Secured Notes” means the U.S.$60,481,000 in aggregate principal amount of Second Priority Senior Second Lien Secured Notes due 2010 of Company issued pursuant to the Senior Second Lien Secured Note Indenture, and any exchange notes containing substantially identical terms issued as contemplated in the Senior Second Lien Secured Note Indenture (except that such exchange notes will not contain terms with respect to transfer restrictions or the accrual of liquidated damages).

“Series A New Preferred Stock” means the non-voting Series A preferred stock issued by the Company on or before the Closing Date pursuant to the Equity Issuance Documentation.

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“Series B New Preferred Stock” means the non-voting Series B preferred stock issued by the Company on or before the Closing Date pursuant to the Equity Issuance Documentation.

“Solvent”, with respect to any Person, means that as of the date of determination both:

(i) (a) the then fair saleable value of the property of such Person is (1) greater than the total amount of liabilities (including contingent liabilities) of such Person and (2) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and due considering all financing alternatives and potential asset sales reasonably available to such Person, (b) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction, and (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and

(ii) such Person is “solvent” within the meaning given that term and similar terms under Applicable Laws (if any) relating to fraudulent transfers and conveyances.

For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Sterling” means The Sterling Group, L.P., a Texas limited partnership.

“St. Paul Priority Agreement” means that certain Priority Agreement dated on or about the date hereof among Administrative Agent, Collateral Agent, the trustee for the Senior Second Lien Secured Notes, St. Paul Guarantee Insurance Company, Computershare Trust Company of Canada, Parent and its Subsidiaries.

“Subject Lender” has the meaning assigned to that term in subsection 2.7A.

“Subsidiary”, with respect to any Person, means any corporation, partnership, trust, limited liability company, association, Joint Venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the members of the Governing Body is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof. Unless the context indicates otherwise, “Subsidiary” means a Subsidiary of Company.

“Subsidiary Guarantee” means the Subsidiary Guarantee executed and delivered by Subsidiaries of Company on the Closing Date and to be joined by additional Subsidiaries of Company from time to time thereafter in accordance with subsection 8.9, substantially in the form of Exhibit XI annexed hereto, as such Subsidiary Guarantee may hereafter be amended, supplemented or otherwise modified from time to time.

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“Subsidiary Guarantor” means NACG, Finance Co., North American Construction Ltd., North American Caisson Ltd., North American Engineering Inc., North American Enterprises Ltd., North American Industries Inc., North American Maintenance Ltd., North American Mining Inc., North American Pipeline Inc., North American Road Inc., North American Services Inc., North American Site Services Inc., Griffiths Pile Driving Inc., North American Site Development Ltd., and any other Subsidiary of Company that executes and delivers a counterpart of, or joinder agreement in respect of, the Subsidiary Guarantee on the Closing Date or from time to time thereafter pursuant to subsection 8.9.

“Subsidiary Pledge Agreements” means the Securities Pledge Agreements executed and delivered by any Subsidiary Guarantor on or after the Closing Date, substantially in the form of Exhibit XVI annexed hereto, as such Subsidiary Pledge Agreements may thereafter be amended, supplemented or otherwise modified from time to time in accordance herewith.

“Supplemental Collateral Agent” has the meaning assigned to that term in subsection 11.1B.

“Swap Lender” means any party to a Lender Hedge Agreement (other than any Loan Party or their Affiliates).

“Swing Line Account” has the meaning assigned to that term in subclause 2.1A(ii)(b).

“Swing Line Lender” means BNP PARIBAS (Canada), or any Person serving as a successor Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

“Swing Line Loan Subcommitment” means the commitment of Swing Line Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(ii).

“Swing Line Loans” means the Prime Rate Loans made by Swing Line Lender to Company pursuant to subsection 2.1A(ii).

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness for borrowed money or Capital Leases of such Person (without regard to accounting treatment).

“Taxes” means all taxes, levies, imposts, stamp taxes, duties, fees, deductions, withholdings, charges, compulsory loans or restrictions or conditions resulting in a charge which are imposed, levied, collected, withheld or assessed by any country or political subdivision or taxing authority thereof now or at any time in the future, together with interest thereon and penalties, charges or other amounts with respect thereto, if any, and “Tax” and “Taxation” shall be construed accordingly.

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“Total Utilization of Revolving Loan Commitments” means, as at any date of determination, the aggregate principal amount of all outstanding Revolving Loans including, for certainty, the face amount of all outstanding Bankers’ Acceptances and BA Discount Notes made under the Revolving Loan Commitment, Swing Line Loans and the Letter of Credit Usage.

“Unasserted Obligations” means, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, any Indebtedness and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for payment has been made (or, in the case of Obligations for indemnification, no notice for indemnification has been issued by the Indemnitee) at such time.

“U.S. Dollars” and the sign “U.S.$” mean the lawful money of the United States of America.

1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.

A. GAAP. Wherever in this Agreement reference is made to “generally accepted accounting principles” or “GAAP”, such reference shall be deemed to be to the recommendations at the relevant time of the Canadian Institute of Chartered Accountants, or any successor institute, applicable on a consolidated basis (unless otherwise specifically provided or contemplated herein to be applicable on an unconsolidated basis) as at the date on which such calculation is made or required to be made in accordance with such principles. Where the character or amount of any asset or liability or item of revenue or expense or amount of equity is required to be determined, or any consolidation or other accounting computation is required to be made for the purpose of this Agreement or any other Loan Document, such determination or calculation shall, to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the parties, be made in accordance with generally accepted accounting principles applied on a consistent basis.

B. Consequential. Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Administrative Agent pursuant to clauses 8.1(ii), 8.1(iii) and 8.1(ix) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in subsection 8.1(v)). Calculations in connection with the definitions, covenants and other provisions of this Agreement shall utilize GAAP as in effect on the date of determination, applied in a manner consistent with that used in preparing the financial statements referred to in subsection 7.3. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and Company, Administrative Agent or Requisite Lenders shall so request, Administrative Agent, Lenders and Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and

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Company shall provide to Administrative Agent reconciliation statements provided for in subsection 8.1(v).

1.3 Other Definitional Provisions and Rules of Construction.

A. Plural. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

B. Section References. References to “Sections” and “subsections” shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

C. Including. The use in any of the Loan Documents of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

D. Miscellaneous. Unless the context requires otherwise (a) any definition of or reference to any Applicable Law, agreement, instrument or other document herein shall be construed as referring to such Applicable Law, agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, and (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof.

Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1 Revolving Loan Commitments; Making of Loans; the Register.

A. Revolving Loan Commitments. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein and in the other Loan Documents set forth, (A) each Lender having a Revolving Loan Commitment hereby severally agrees to make the Loans as described in subsection 2.1A(i), (B) Swing Line Lender hereby agrees to make the Swing Line Loans as described in subsection 2.1A(ii), and (C) each Lender having a Revolving Loan Commitment hereby severally agrees to make the Refunded Swing Line Loans as described in subsection 2.1A(ii)(d).

(i) Revolving Loans. Each Revolving Lender severally agrees, subject to the limitations set forth below with respect to the maximum amount of Revolving Loans permitted to be outstanding from time to time, to lend to Company from time to time

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during the period from the Closing Date to but excluding the Revolving Loan Commitment Termination Date an aggregate amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan Commitments to be used for the purposes identified in subsection 2.5 and to be available by way of Prime Rate Loans and Bankers’ Acceptances. The original amount of each Revolving Lender’s Revolving Loan Commitment is set forth opposite its name on Schedule 2.1 annexed hereto and the aggregate original amount of the Revolving Loan Commitments is Cdn.$40,000,000, provided that the Revolving Loan Commitments of Revolving Lenders shall be adjusted among Revolving Lenders to give effect to any assignments of the Revolving Loan Commitments pursuant to subsection 12.1B, and shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4. Each Revolving Lender’s Revolving Loan Commitment shall expire on the Revolving Loan Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Loan Commitments, shall be paid in full no later than that date. Amounts borrowed under this subsection 2.1A(i) may be repaid and reborrowed to but excluding the Revolving Loan Commitment Termination Date.

Anything contained in this Agreement to the contrary notwithstanding, the Revolving Loans and the Revolving Loan Commitments shall be subject to the limitation that (i) in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan Commitments then in effect and (ii) in no event shall the First Lien Exposure exceed the Borrowing Base then in effect.

(ii) Swing Line Loans.

(a) General Provisions. Swing Line Lender hereby agrees, subject to the limitations set forth below with respect to the maximum amount of Swing Line Loans permitted to be outstanding from time to time, to make a portion of the Revolving Loan Commitments available to Company from time to time during the period from the Closing Date to but excluding the Revolving Loan Commitment Termination Date by making Swing Line Loans to Company in an aggregate amount not exceeding the amount of the Swing Line Loan Subcommitment to be used for the purposes identified in subsection 2.5, notwithstanding the fact that such Swing Line Loans, when aggregated with Swing Line Lender’s outstanding Revolving Loans and Swing Line Lender’s Pro Rata Share of the Letter of Credit Usage then in effect, may exceed Swing Line Lender’s Revolving Loan Commitment. The original amount of the Swing Line Loan Subcommitment is Cdn.$3,000,000, provided that any reduction of the Revolving Loan Commitments made pursuant to subsection 2.4 that reduces the aggregate Revolving Loan Commitments to an amount less than the then current amount of the Swing Line Loan Subcommitment shall result in an automatic corresponding reduction of the Swing Line Loan Subcommitment to the amount of the aggregate Revolving Loan Commitments, as so reduced, without any further action on the part of Company, Administrative Agent or Swing Line Lender. The Swing Line Loan Subcommitment shall expire on the Revolving

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Loan Commitment Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans shall be paid in full no later than that date. Amounts borrowed under this subsection 2.1A(ii) may be repaid and reborrowed to but excluding the Revolving Loan Commitment Termination Date.

Anything contained in this Agreement to the contrary notwithstanding, the Swing Line Loans and the Swing Line Loan Subcommitment shall be subject to the limitation that (i) in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan Commitments then in effect and (ii) in no event shall the First Lien Exposure exceed the Borrowing Base then in effect.

(b) Swing Line Account. Swing Line Lender will establish at its Funding Branch of Account a Cdn. Dollar account of Company, referred to herein as a “Swing Line Account”. The Swing Line Account shall record the day to day banking business of Company conducted through the Swing Line Lender. If, at the end of any Business Day, the balance in the Swing Line Account:

(1) is a credit in excess of Cdn.$100,000, Swing Line Lender may apply the amount of the credit or any part thereof rounded down to the nearest Cdn.$50,000, as applicable, as a repayment of any Prime Rate Loans owing to the Swing Line Lender under the Swing Line; or

(2) is a debit, the Swing Line Lender shall make available a Swing Line Loan (to the extent that such Advance would not, when added to the outstanding Swing Line Loans, exceed the Swing Line Loan Subcommitment), in an amount rounded up to the nearest Cdn. $50,000, as the case may be, to place Company in a minimum net credit position of zero.

(c) Swing Line Loans by Request. In addition to the automatic advance of Swing Line Loans pursuant to clause 2.1A(ii)(b)(2) above, Swing Line Lender also agrees to make Swing Line Loans available pursuant to a Notice of Borrowing delivered as provided herein.

(d) Swing Line Loan Prepayment with Proceeds of Other Revolving Loans. With respect to any Swing Line Loans that have not been voluntarily prepaid by Company pursuant to subsection 2.4A(i), Swing Line Lender shall, on the first Business Day of each week, and at any other time in its sole and absolute discretion, deliver a notice to the Lenders holding the Revolving Loan Commitments requiring Revolving Lenders to make Revolving Loans that are Prime Rate Loans on such Funding Date in an amount equal to the amount of such Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is given. Company hereby authorizes the giving of any such notice and the making of any such Revolving Loans. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving

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Loans made by Revolving Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to Company) and applied to repay a corresponding portion of the Refunded Swing Line Loans by depositing such proceeds in the Swing Line Account, and (2) on the day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans of Swing Line Lender but shall instead constitute part of Swing Line Lender’s outstanding Revolving Loans. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of Company from Swing Line Lender in any bankruptcy proceeding, in any assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by subsection 12.5.

(e) Swing Line Loan Assignments. If for any reason (1) Revolving Loans are not made upon the request of Swing Line Lender as provided in the immediately preceding paragraph in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans or (2) the Revolving Loan Commitments are terminated at a time when any Swing Line Loans are outstanding, each Revolving Lender shall be deemed to, and hereby agrees to, have purchased an assignment of such outstanding Swing Line Loans in an amount equal to its Pro Rata Share (calculated, in the case of the foregoing clause (2), immediately prior to such termination of the Revolving Loan Commitments) of the unpaid amount of such Swing Line Loans together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Revolving Lender shall deliver to Swing Line Lender an amount equal to its respective assignment in same day funds at the Funding and Payment Office. In order to further evidence such assignment (and without prejudice to the effectiveness of the assignment provisions set forth above), each Revolving Lender agrees to enter into an Assignment Agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any Revolving Lender fails to make available to Swing Line Lender the amount of such Revolving Lender’s assignment as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the rate customarily used by Swing Line Lender for the correction of errors among banks for three Business Days and thereafter at the Prime Rate. In the event Swing Line Lender receives a payment of any amount in which other Revolving Lenders have purchased assignments as provided in this paragraph, Swing Line Lender shall promptly distribute to each such other Revolving Lender its Pro Rata Share of such payment.

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(f) Revolving Lenders’ Obligations. Anything contained herein to the contrary notwithstanding, each Revolving Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to subsection 2.1A(ii)(d) and each Revolving Lender’s obligation to purchase an assignment of any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including (1) any set-off, counterclaim, recoupment, defense or other right which such Revolving Lender may have against Swing Line Lender, Company or any other Person for any reason whatsoever; (2) the occurrence or continuance of an Event of Default or a Potential Event of Default; (3) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries; (4) any breach of this Agreement or any other Loan Document by any party thereto; or (5) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that, unless Requisite Lenders agree otherwise, Swing Line Lender shall not make a Swing Line Loan if at the time of the request for a Swing Line Loan the Swing Line Lender has received written notice from Company or a Lender that a Potential Event of Default or an Event of Default has occurred and is continuing (unless and until it has been confirmed that no Potential Event of Default or Event of Default has occurred and is continuing).

(g) Indemnification. Each Revolving Lender agrees to indemnify Swing Line Lender (to the extent not reimbursed by Company), rateably according to its Pro Rata Share from and against any and all losses and claims of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Swing Line Lender in any way relating to or arising out of any Swing Line Loans, provided that no Lender shall be liable for any portion of such losses or claims resulting from the Swing Line Lender’s gross negligence or willful misconduct.

B. Borrowing Mechanics. Revolving Loans made on any Funding Date by way of Prime Rate Loans (other than Swing Line Loans) or Bankers’ Acceptances (other than Revolving Loans made pursuant to a request by Swing Line Lender pursuant to subsection 2.1A(ii)(d), or Revolving Loans made pursuant to subsection 4.3C) shall be in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount.

Swing Line Loans made on any Funding Date pursuant to a Notice of Borrowing shall be in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount. Swing Line Loans made pursuant to subclause 2.1A(ii)(b) do not require a notice of Borrowing, and are not subject to minimum amounts except as set out in that subclause.

Prime Rate Loans made by Revolving Lenders weekly (or at the request of Swing Line Lender) pursuant to subclause 2.1A(ii)(d) shall be in minimum amounts of Cdn.$500,000 and multiples of Cdn.$100,000 in excess thereof.

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Whenever Company desires that Lenders make Revolving Loans by way of Prime Rate Loans (other than Swing Line Loans), it shall deliver to Administrative Agent a duly executed Notice of Borrowing no later than 11:00 a.m. (Toronto time) at least one Business Day in advance of the proposed Funding Date.

Whenever Company desires that Lenders make Revolving Loans by way of Bankers’ Acceptances, it shall deliver to Administrative Agent a duly executed Notice of Borrowing no later than 11:00 a.m. (Toronto time) at least three Business Days in advance of the proposed Funding Date.

Whenever Company desires that Swing Line Lender make a Swing Line Loan pursuant to clause 2.1A(ii)(c), it shall deliver to Swing Line Lender, with a copy to Administrative Agent, a duly executed Notice of Borrowing no later than 11:00 a.m. (Toronto time) on the proposed Funding Date (which for greater certainty may be delivered by facsimile transmission).

Company shall notify Administrative Agent prior to the funding of any Loans requested by Company in the event that any of the matters to which Company is required to certify in the applicable Notice of Borrowing is no longer true and correct as of the applicable Funding Date. The acceptance by Company of the proceeds of any Loans (including Swing Line Loans) shall constitute a re-certification by Company, as of the applicable Funding Date, as to the matters to which Company is required to certify in any Notice of Borrowing.

Except as set out in subsection 2.6C, a Notice of Borrowing for, or a Notice of Conversion/Rollover for Conversion to, or Rollover of, Bankers’ Acceptances shall be irrevocable, and Company shall be bound to make a borrowing or to effect a Conversion or Rollover in accordance therewith.

Notwithstanding the foregoing provisions of this subsection 2.1B, no Bankers’ Acceptances may be made and no Prime Rate Loan may be converted into Bankers’ Acceptances until the earlier of the 30th day after the Closing Date and the date specified by Administrative Agent to Company on which the primary syndication of the Loans has been completed.

C. Disbursement of Funds. All Revolving Loans (other than Swing Line Loans made by Swing Line Lender) shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that neither Administrative Agent nor any Lender shall be responsible for any default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder nor shall the Revolving Loan Commitment of any Lender to make the particular type of Loan requested be increased or decreased as a result of a default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder.

Promptly after receipt by Administrative Agent of a Notice of Borrowing by way of Prime Rate Loans (other than Swing Line Loans) pursuant to subsection 2.1B, Administrative Agent shall notify each Lender for the type of Loan of the proposed borrowing. Each such Lender shall make the amount of its Loan available to Administrative Agent not later than 12:00 noon (Toronto time) on the applicable Funding Date in same day funds at the Funding and

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Payment Office. Except as provided in subsection 2.1A(ii) with respect to Revolving Loans used to repay Refunded Swing Line Loans, or subsection 4.3B with respect to Revolving Loans used to reimburse any Issuing Lender for the amount of a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of the conditions precedent specified in subsections 6.1 (in the case of Loans made on the Closing Date) and 6.2 (in the case of all Loans), Administrative Agent shall make the proceeds of such Loans available to Company on the applicable Funding Date by causing an amount of same day funds equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to an account of Company maintained by Company with Administrative Agent at the Funding and Payment Office by 12:00 noon on the Funding Date, or as otherwise instructed by Company in writing and acceptable to Administrative Agent.

After receipt by Swing Line Lender of a Notice of Borrowing by way of Swing Line Loans pursuant to subsection 2.1A(ii)(c), Swing Line Lender shall make the amount of its Swing Line Loan available to Company not later than 12:00 noon (Toronto time) on the applicable Funding Date, in each case in same day funds to be credited to an account of Company maintained by Company with Swing Line Lender at the Funding and Payment Office of Swing Line Lender.

Unless Administrative Agent shall have been notified by any Lender prior to a Funding Date for any Loans that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Prime Rate Loan requested on such Funding Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Funding Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Funding Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Prime Rate. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the rate payable under this Agreement for Prime Rate Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender from its obligation to fulfill its Revolving Loan Commitments hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.

D. The Register. Administrative Agent shall maintain at its address referred to in subsection 12.8 a register for the recordation of, and shall record, the names and addresses of Lenders and the Revolving Loan Commitment, Swing Line Loan Subcommitment, Revolving Loans and Swing Line Loans of each Lender from time to time (the “Register”). Company, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Revolving Loan Commitments and

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Loans listed therein for all purposes hereof; all amounts owed with respect to any Revolving Loan Commitment or Loan shall be owed to the Lender listed in the Register as the owner thereof; and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent is listed in the Register as a Lender, shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Revolving Loan Commitments or Loans. Each Lender shall record on its internal records the amount of its Loans and Revolving Loan Commitments and each payment in respect hereof, and any such recordation shall be prima facie evidence of the contents thereof, absent manifest error, subject to the entries in the Register, which shall, absent manifest error, govern in the event of any inconsistency with any Lender’s records. Failure to make any recordation in the Register or in any Lender’s records, or any error in such recordation, shall not affect any Loans or Revolving Loan Commitments or any Obligations in respect of any Loans.

2.2 Interest on the Loans.

A. Rate of Interest. Subject to the provisions of subsection 2.6, each Prime Rate Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Prime Rate.

Subject to the provisions of subsection 2.6, each Swing Line Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Prime Rate.

The applicable basis for determining the rate of interest with respect to any Revolving Loan shall be selected by Company initially at the time a Notice of Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and the basis for determining the interest rate with respect to any Revolving Loan may be changed from time to time pursuant to subsection 2.2C. If on any day a Revolving Loan is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day that Loan shall bear interest determined by reference to the Prime Rate.

(i) Subject to the provisions of subsections 2.2D, 2.2I and 2.6, the Revolving Loans shall bear interest or accrue fees through maturity as follows:

(a) if a Prime Rate Loan (other than a Swing Line Loan), then interest at the sum of the Prime Rate plus 2.0% per annum;

(b) if a Swing Line Loan, then interest at the sum of the Prime Rate plus 1.5% per annum, for the sole account of Swing Line Lender; and

(c) if a Bankers’ Acceptance, then interest and fees as provided in Section 3.

(d) if a Letter of Credit, then fees and interest as provided in Section 4.

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B. Interest Payments. Subject to the provisions of subsection 2.2D, interest on each Prime Rate Loan (including Swing Line Loans) shall be payable monthly in arrears on each Interest Payment Date in respect of the immediately preceding calendar month based on the actual number of days in such month, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid), and at maturity (including final maturity), provided that in the event any Revolving Loans that are Prime Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on such Loans through the date of such prepayment shall be payable on the next succeeding Interest Payment Date applicable to Prime Rate Loans (or, if earlier, at final maturity).

C. Conversion or Rollover. Subject to the provisions of Section 3, Company shall have the option:

(i) to convert at any time all or any part of its outstanding Revolving Loans (other than Swing Line Loans) equal to Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount from Prime Rate Loans to an issue of Bankers’ Acceptances, or from Bankers’ Acceptances to Prime Rate Loans;

(ii) upon the expiration of a BA Interest Period applicable to Bankers’ Acceptances, to rollover all or any portion of such Loan equal to Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount as a new issue of Bankers’ Acceptances;

provided that an issue of Bankers’ Acceptances may only be converted into a Prime Rate Loan on the expiration date of the BA Interest Period applicable thereto.

Company shall deliver a duly executed Notice of Conversion/Rollover to Administrative Agent no later than 11:00 a.m. (Toronto time) at least one Business Day in advance of the proposed Conversion date (in the case of a Conversion to a Prime Rate Loan) and at least three Business Days in advance of the proposed Conversion/Rollover date (in the case of a Conversion to, or a Rollover of, Bankers’ Acceptances). Administrative Agent shall notify each Lender of any Loan subject to a Notice of Conversion/Rollover. A Conversion or Rollover shall not be subject to the conditions to making a Loan set out in subsection 6.2.

D. Default Rate. Upon the occurrence and during the continuance of any Event of Default, the outstanding principal amount of all Loans and, to the extent permitted by Applicable Law, any interest payments thereon not paid when due and any fees and other amounts then due and payable hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under any Bankruptcy Laws) payable upon demand at a rate that is 2% per annum in excess of the interest rate otherwise payable under this Agreement with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for Prime Rate Loans), provided that (i) in the case of Bankers’ Acceptances, upon the expiration of the BA Interest Period in effect at the time any such increase in interest rate is effective such Bankers’ Acceptances shall thereupon become Prime Rate Loans and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable

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under this Agreement for Prime Rate Loans, and (ii) subclause 4.3D(i) shall apply in respect of fees payable in respect of Letters of Credit, and not this subclause 2.2D. Payment or acceptance of the increased rates of interest provided for in this subsection 2.2D is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

E. Computation of Interest. Interest on the Loans shall be computed on the basis of a 365-day year, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or, with respect to a Prime Rate Loan being converted from Bankers’ Acceptances, the date of Conversion to such Prime Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or, with respect to a Prime Rate Loan being converted to Bankers’ Acceptances, the date of Conversion of such Prime Rate Loan, as the case may be, shall be excluded, provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

F. Prima Facie Evidence. Each determination by Administrative Agent (or by the Issuing Lender as applicable) of the amount of interest, fees or other amounts due from Company hereunder shall be prima facie evidence of the accuracy of such determination.

G. Accrual. All interest, fees and other amounts payable by Company hereunder shall accrue daily, be computed as described herein, and be payable both before and after demand, maturity, default and judgment.

H. No Merger. To the extent permitted by Applicable Law, the covenant of Company to pay interest at the rates provided herein shall not merge in any judgment relating to any obligation of Company to the Lenders or Administrative Agent and any provision of the Interest Act (Canada) or Judgment Interest Act (Alberta) which restricts any rate of interest set forth herein shall be inapplicable to this Agreement and to the extent permitted by Applicable Law is hereby waived by Company.

I. Maximum Rate. No interest or fee to be paid hereunder or under the other Loan Documents shall be paid at a rate exceeding the maximum rate permitted by Applicable Law. In the event that such interest or fee exceeds such maximum rate, such interest or fees shall be credited to Company for application to any other Obligations then due and owing (or if no other Obligations are then due and owing, refunded to Company), so as to be payable at the highest rate recoverable under Applicable Law. For the purposes of the application of the Criminal Code (Canada), the effective annual rate of interest shall be determined in accordance with generally accepted actuarial practices and principles and in the event of any dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by Administrative Agent shall be conclusive for the purpose of such determination.

J. Interest Act Rate Conversion. Whenever a rate of interest hereunder is calculated on the basis of a year (the “deemed year”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for purposes of the Interest Act (Canada) by multiplying such rate of interest by the

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actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.

K. No Deemed Reinvestment. The principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement; all interest payments to be made hereunder shall be paid without allowance or deduction for deemed reinvestment, before and after maturity, default and judgment. The rates of interest specified in this Agreement are intended to be nominal rates and not effective rates. Interest calculated hereunder shall be calculated using the nominal rate method and not the effective rate method of calculation.

2.3 Fees.

A. Commitment Fees. Company agrees to pay to Administrative Agent, for distribution to each Revolving Lender in proportion to that Lender’s Pro Rata Share, commitment fees for the period from and including the Closing Date to and excluding the Revolving Loan Commitment Termination Date equal to the average of the daily excess of the Revolving Loan Commitments over the sum of (i) the aggregate principal amount of outstanding Revolving Loans including for certainty, the face amount of all Bankers’ Acceptances and BA Discount Notes outstanding under the Revolving Loan Commitment (but excluding any outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage, multiplied by .50% per annum, such commitment fees to be calculated on the basis of a 365-day year and the actual number of days elapsed and to be calculated quarterly in arrears for the three month periods ending on March 31, June 30, September 30 and December 31 of each year, and payable on the first Business Day of the month immediately following each such quarter, commencing on the first such Business Day to occur after the Closing Date, and on the Revolving Loan Commitment Termination Date.

B. Other Fees. Company agrees to pay to Agents such fees in the amounts and at the times separately agreed upon between Company and Agents.

2.4 Repayments; Voluntary and Mandatory Prepayments; Application of Proceeds.

A. Repayments and Prepayments; Reductions in Revolving Loan Commitments.

(i) Voluntary Repayments and Prepayments. Company may, upon written notice to Administrative Agent on or prior to 12:00 noon (Toronto time) on the date of repayment, at any time and from time to time, repay without premium or penalty any Swing Line Loan on any Business Day in whole or in part in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount.

Company may, upon not less than one Business Day’s prior written notice to Administrative Agent by 12:00 noon (Toronto time) on the date required who will promptly notify each Lender whose Loans are to be prepaid of such prepayment, at any time and from time to time prepay without premium or penalty any Revolving Loans that are Prime Rate Loans (other than Swing Line Loans) on any Business Day in whole or in

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part in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount.

Company may, upon not less than three Business Days’ prior written notice to Administrative Agent by 12:00 noon (Toronto time) on the date required who will promptly notify each Lender whose Loans are to be prepaid of such prepayment, at any time and from time to time prepay, without premium or penalty, any Revolving Loans that are Bankers’ Acceptances on any Business Day in whole or in part in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount, provided that Bankers’ Acceptances may only be prepaid on the expiration of the BA Interest Period.

Notice of repayment or prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the date specified for payment therein. Any such voluntary payment shall be applied as specified in subsection 2.4A(iv).

(ii) Voluntary Reduction of Revolving Loan Commitments. Company may, upon not less than three Business Days’ prior written or upon such lesser number of days’ prior written notice, as determined by Administrative Agent in its sole discretion, at any time and from time to time, terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitments in an amount up to the amount by which the Revolving Loan Commitments exceed the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or reduction, provided that any such partial reduction of the Revolving Loan Commitments shall be in an aggregate minimum amount of Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount. Company’s notice to Administrative Agent (who will promptly notify each Revolving Lender of such notice) shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Loan Commitments shall be effective on the date specified in Company’s notice and shall reduce the Revolving Loan Commitment of each Revolving Lender proportionately to its Pro Rata Share.

(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan Commitments. The Loans shall be prepaid and the Revolving Loan Commitments shall be permanently reduced, in the amounts and under the circumstances set forth below, all such prepayments and reductions to be applied as set forth below or as more specifically provided in subsection 2.4A(iv) and subsection 2.4F:

(a) Prepayments and Reductions From Net Asset Sale Proceeds. Promptly, but not later than 5 Business Days after the date of receipt by Company or any of its Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale, Company shall either:

(1) prepay the Loans and collateralize Bankers’ Acceptances, and the Revolving Loan Commitments shall be permanently reduced in an aggregate amount equal to such Net Asset Sale Proceeds, or

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(2) so long as no Potential Event of Default or Event of Default shall have occurred and be continuing, deliver to Administrative Agent an Officer’s Certificate setting forth (x) that portion of such Net Asset Sale Proceeds that Company or such Subsidiary intends to reinvest in equipment or other productive assets of the general type used in the business of Company and its Subsidiaries within 170 days of such date of receipt and (y) the proposed use of such portion of the Net Asset Sale Proceeds and such other information with respect to such reinvestment as Administrative Agent may reasonably request, and Company shall, or shall cause one or more of its Subsidiaries to, diligently apply such portion to such reinvestment purposes, provided that, pending such reinvestment, such portion of the Net Asset Sale Proceeds shall be applied to prepay outstanding Revolving Loans (without a reduction in Revolving Loan Commitments) to the full extent thereof. In addition, Company shall, no later than 170 days after receipt of such Net Asset Sale Proceeds that have not theretofore been applied to the Obligations or that have not been so reinvested as provided above, make an additional prepayment of the Loans and the Revolving Loan Commitments shall be permanently reduced in the full amount of all such Net Asset Sale Proceeds not so applied or not so reinvested.

(b) Prepayments and Reductions from Net Insurance/Condemnation Proceeds. No later than the first Business Day following the date of receipt by Administrative Agent or by Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds that are required to be applied as a prepayment pursuant to the provisions of subsection 8.4C, Company shall prepay the Loans and collateralize Bankers’ Acceptances, and the Revolving Loan Commitments shall be permanently reduced, as provided in subsection 2.4A(iv) and subsection 2.4F, as applicable, in an aggregate amount equal to the amount of such Net Insurance/Condemnation Proceeds.

(c) Prepayments and Reductions Due to Issuance of Equity Securities. On the date of receipt of the Net Securities Proceeds from the issuance of any Capital Stock (i) of Holdings or from any capital contribution to Holdings by any holder of Capital Stock thereof after the Closing Date, in excess of $1,000,000 in any Fiscal Year, or (ii) of Company or any of its Subsidiaries, Company shall prepay the Loans and collateralize Bankers’ Acceptances in an aggregate amount equal to the amount of such Net Securities Proceeds (without reduction of the Revolving Loan Commitments), all as provided in subsection 2.4A(iv) and subsection 2.4F, as applicable.

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(d) Prepayments and Reductions Due to Issuance of Indebtedness. On the date of receipt of the Net Securities Proceeds from the issuance of any Indebtedness of Company or any of its Subsidiaries after the Closing Date, other than Indebtedness permitted pursuant to subsection 9.1, Company shall prepay the Loans, and collateralize Bankers’ Acceptances, and the Revolving Loan Commitments shall be permanently reduced, in an aggregate amount equal to the amount of such Net Securities Proceeds, all as provided in subsection 2.4A(iv) and subsection 2.4F, as applicable.

(e) Cash Collateralization from Consolidated Excess Cash Flow. In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2006), Company shall, no later than 120 days after the end of such Fiscal Year, shall deliver to Collateral Agent an amount equal to 50% of such Consolidated Excess Cash Flow (which shall be deposited into a collateral account and held by the Collateral Agent as additional Collateral for the pro rata benefit of the Lenders and the Swap Lenders).

(f) Calculations of Net Proceeds Amounts; Additional Prepayments and Reductions Based on Subsequent Calculations. Concurrently with any prepayment of the Loans, and collateralization of Bankers’ Acceptances, and/or reduction of the Revolving Loan Commitments pursuant to subsections 2.4A(iii)(a)-(e), Company shall deliver to Administrative Agent an Officer’s Certificate demonstrating the calculation of the amount of the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation Proceeds or Net Securities Proceeds, as the case may be, that gave rise to such prepayment, collateralization and/or reduction. In the event that Company shall subsequently determine that the actual amount was greater than the amount set forth in such Officer’s Certificate, Company shall promptly make an additional prepayment of the Loans, or collateralization of Bankers’ Acceptances, in an amount equal to the amount of such excess, and shall reduce the Revolving Loan Commitments accordingly, all as provided in subsection 2.4A(iv) and subsection 2.4F, as applicable, and Company shall concurrently therewith deliver to Administrative Agent an Officer’s Certificate demonstrating the derivation of the additional amount resulting in such excess.

(g) Prepayments Due to Reductions of Revolving Loan Commitments or Due to Insufficient Borrowing Base. Company shall immediately prepay first the Swing Line Loans, second the other Revolving Loans (including collateralization of Bankers’ Acceptances), and third, collateralize Letters of Credit, to the extent necessary so that (A) the Total Utilization of Revolving Loan Commitments shall not at any time exceed the Revolving Loan Commitments then in effect, and (B) the First Lien Exposure shall not at any time exceed the Borrowing Base then in effect.

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(iv) Application of Prepayments; Reduction of Revolving Loan Commitments.

(a) Application of Voluntary Prepayments by Type of Loans and Order of Maturity. Any voluntary prepayments pursuant to subsection 2.4A(i) shall be applied as specified by Company in the applicable notice of prepayment, provided that in the event Company fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied:

(1) first, to repay outstanding Swing Line Loans to the full extent thereof, without reduction of Revolving Loan Commitments,

(2) second, to repay other outstanding Revolving Loans to the full extent thereof, including cash collateralizing any outstanding Bankers’ Acceptances issued under the Revolving Loan Commitments, without reduction of Revolving Loan Commitments, and

(3) third, to collateralize Letters of Credit.

(b) Application of Mandatory Prepayments by Type of Loans. Except as provided in subsection 2.4F, any amount required to be applied as a mandatory prepayment of the Loans, collateralization of Bankers’ Acceptances or Letters of Credit, and a reduction of the Revolving Loan Commitments, in any case pursuant to subsections 2.4A(iii)(a)-(g), shall be applied:

(1) first, to prepay the Swing Line Loans to the full extent thereof and, to the extent required by the applicable provision of subsection 2.4A(iii), to permanently reduce the Revolving Loan Commitments by the amount of such prepayment,

(2) second, to the extent of any remaining portion of such amount, to prepay other Prime Rate Loans to the full extent thereof and, to the extent required by the applicable provision of subsection 2.4A(iii), to further permanently reduce the Revolving Loan Commitments by the amount of such prepayment, and

(3) third, to the extent of any remaining portion of such amount, to collateralize Bankers’ Acceptances under the Revolving Loan Facility to the full extent thereof and, to the extent required by the applicable provision of subsection 2.4A(iii), to further permanently reduce the Revolving Loan Commitments by the amount so collateralized, effective the date of maturity of the Bankers’ Acceptances so collateralized.

Any mandatory reduction of Revolving Loan Commitments pursuant to this subsection 2.4 shall be in proportion to each Revolving Lender’s Pro Rata Share.

(c) Application of Prepayments to Prime Rate Loans and Bankers’ Acceptances. Any prepayment of Revolving Loans shall be applied first to Prime

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Rate Loans to the full extent thereof before application to collateralization of Bankers’ Acceptances or Letters of Credit, provided that Company shall first deposit the remainder of such prepayments not applied to prepay Prime Rate Loans in the Collateral Account pursuant to subsection 2.4D to be applied thereafter to prepay Bankers’ Acceptances having BA Interest Periods expiring on a date or dates nearest the date of deposit in accordance with this subsection 2.4A(iv), upon expiration of such BA Interest Periods, and second (if required) to the Collateral Account pursuant to subsection 2.4E to be applied thereafter to reimburse the Issuing Lender for drawing on Letters of Credit expiring on a date or dates nearest the date of deposit in accordance with this subsection 2.4A(iv), upon expiration of such Letters of Credit.

B. General Provisions Regarding Payments.

(i) Manner and Time of Payment. All payments by Company of principal, interest, fees and other Obligations shall be made in Canadian Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 noon (Toronto time) on the date due at the Funding and Payment Office for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day. Notwithstanding the foregoing, payments of amounts deposited in the Collateral Account pursuant to the proviso to subsection 2.4A(iv)(c) shall be deemed to have been paid by Company on the applicable date or dates such amounts are applied to prepay Bankers’ Acceptances or to reimburse drawings under Letters of Credit. Company hereby authorizes Administrative Agent to charge its accounts with Administrative Agent in order to cause timely payment to be made to Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).

(ii) Application of Payments to Principal and Interest. Except as provided in subsection 2.2B, all payments in respect of the principal amount of any Prime Rate Loan shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments shall be applied to the payment of interest before application to principal.

(iii) Apportionment of Payments. Aggregate payments of principal and interest shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to Lenders’ respective Pro Rata Shares. Administrative Agent shall promptly distribute to each Lender, at the account specified in the payment instructions set forth below its name on the appropriate signature page hereof or at such other account as such Lender may request in subsequent payment instructions delivered to Administrative Agent by such Lender, its Pro Rata Share of all such payments received by Administrative Agent and the commitment fees and letter of credit fees of such Lender, if any, when received by Administrative Agent pursuant to subsection 2.3 and subsection 4.2.

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(iv) Payments on Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the commitment fees hereunder, as the case may be.

C. Authorized Debit. Company authorizes and directs Administrative Agent to automatically debit the Company’s bank accounts for all amounts payable by Company under this Agreement, including the repayment of principal and the payment of interest and fees and all charges agreed to by Company for the maintaining of the Company’s accounts. Administrative Agent shall, as soon as is practical after making any such debit, inform Company of the amount thereof and provide reasonable details of the calculation thereof.

D. Collateralization of Bankers’ Acceptances. With respect to the prepayment or cash collateralization of unmatured Bankers’ Acceptances to the extent required hereunder (it being acknowledged that any requirement to pay or prepay Bankers’ Acceptances prior to their maturity shall be construed as a requirement to provide cash collateral under this provision), Company shall provide for the funding of such unmatured Bankers’ Acceptances by paying to and depositing with Administrative Agent cash collateral for each such unmatured Bankers’ Acceptances; such cash collateral deposited by Company shall be held by Administrative Agent in the Collateral Account with interest to be credited to Company at rates prevailing at the time of deposit for similar accounts with Administrative Agent. Such Collateral Account shall be held as security for the obligations of Company in relation to such Bankers’ Acceptances and the security of Administrative Agent thereby created shall rank in priority to all other Liens and adverse claims against such cash collateral. Such cash collateral shall be applied to satisfy pro tanto the obligations of Company for such Bankers’ Acceptances as they mature and Administrative Agent is hereby irrevocably directed by Company to apply any such cash collateral to such maturing Bankers’ Acceptances. Amounts held in such Collateral Account may not be withdrawn by Company; however, interest on such deposited amounts shall be for the account of Company and may be withdrawn by Company so long as no Potential Event of Default or Event of Default is then continuing. If after maturity of the Bankers’ Acceptances for which such funds are held and application by Administrative Agent of the amounts in such Collateral Accounts to satisfy the obligations of Company hereunder with respect to the Bankers’ Acceptances being repaid, any excess remains, such excess shall be promptly paid by Administrative Agent to Company so long as no Potential Event of Default or Event of Default is then continuing.

E. Collateralization of Letters of Credit. With respect to funding the cash collateralization of unexpired Letters of Credit to the extent required hereunder (it being acknowledged that any requirement to pay or prepay or collateralize Letters of Credit prior to their expiry date shall be construed as a requirement to provide cash collateral under this provision), it is agreed that Company shall provide for the funding of such unexpired Letters of Credit by paying to and depositing with the Administrative Agent for the benefit of the Issuing Lender cash collateral for each such unexpired Letter of Credit; such cash collateral deposited by Company shall be held by the Administrative Agent for the benefit of the Issuing Lender in the Collateral Account with interest to be credited to Company at rates prevailing at the time of

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deposit for similar accounts with the Administrative Agent. Such Collateral Account shall be held as security for the obligations of Company in relation to such Letters of Credit and the security of the Administrative Agent and Issuing Lender thereby created in such cash collateral shall rank in priority to all other Liens and adverse claims against such cash collateral. Such cash collateral shall be applied to satisfy the obligations of Company for such Letters of Credit as payments are made thereunder and the Issuing Lender is hereby irrevocably directed by Company to so apply any such cash collateral. Amounts held in such Collateral Account may not be withdrawn by Company; however, interest on such deposited amounts shall be for the account of Company and may be withdrawn by Company so long as no Potential Event of Default or Event of Default is then continuing. If after expiry of the Letters of Credit for which such funds are held and application by the Administrative Agent and Issuing Lender of the amounts in such Collateral Account to satisfy the obligations of Company hereunder with respect to the Letters of Credit being repaid, any excess remains, such excess shall be promptly paid by Administrative Agent to Company so long as no Potential Event of Default or Event of Default is then continuing.

F. Application of Proceeds after Event of Default. Upon the occurrence and during the continuance of an Event of Default, if requested by Requisite Lenders (a) all payments received on account of the Obligations, whether from Company, from any Subsidiary Guarantor or otherwise, shall be applied by Administrative Agent against the Obligations and (b) all proceeds received by Collateral Agent in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral under any Collateral Document may, in the discretion of Administrative Agent, be held by Collateral Agent as Collateral for, and/or (then or at any time thereafter) applied in full or in part by Administrative Agent against, the applicable Obligations and Secured Swap Obligations, in each case in the following order of priority:

(i) to the payment of all costs and expenses of such sale, collection or other realization, all other expenses, liabilities and advances made or incurred by Agents in connection therewith, and all amounts for which Agents are entitled to compensation (including the fees described in subsection 2.3), reimbursement and indemnification under any Loan Document and all advances made by Administrative Agent thereunder for the account of the applicable Loan Party, and to the payment of all costs and expenses paid or incurred by Agents in connection with the Loan Documents, all in accordance with subsections 11.4, 12.2 and 12.3 and the other terms of this Agreement and the Loan Documents;

(ii) thereafter, to the payment of all other Obligations (including the cash collateralization of outstanding Letters of Credit) and the obligations under Secured Swap Obligations for the ratable benefit of the holders thereof (subject, in the case of amounts to be applied to the Obligations, to the provisions of subsection 2.4B(ii) hereof); and

(iii) thereafter, to the payment to or upon the order of such Loan Party or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

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2.5 Use of Proceeds.

The proceeds of any Revolving Loans shall be applied by Company for working capital and other general corporate purposes, which may include the making of intercompany loans to and equity Investments in any of Company’s wholly-owned Subsidiaries, in each case in accordance with subsection 9.3, for their own general corporate purposes.

2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality.

A. Taxes. Company shall make all payments required hereunder, whether by way of principal, interest or otherwise, without regard to any defense, counterclaim or right of set-off available to Company and without withholding any Taxes (for the purposes of this subclause 2.6A, “Taxes” shall not include Taxes on such Lender’s overall income, and franchise taxes). If Company is required by Applicable Law to deduct any withholding Taxes from or in respect of any amounts payable under this Agreement (i) the amounts payable by Company hereunder will be increased by the amount necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.6A) Administrative Agent and the Lenders will receive an amount equal to the sum they would have received had no such deductions been made, (ii) Company will make such deductions, and (iii) Company will pay the full amount deducted to the relevant taxing authority or other Governmental Authority in accordance with Applicable Law. Notwithstanding the foregoing, unless a Person becomes a Lender as a result of an assignment of Loans at a time when an Event of Default has occurred and is continuing, Company shall have no obligation to gross-up for Taxes withheld or paid solely because such Lender is a non-resident of Canada within the meaning of the Income Tax Act, unless Company otherwise agrees in writing to do so.

B. Capital Adequacy Adjustment. If any Lender shall have determined, acting reasonably, that the adoption, effectiveness, phase-in or applicability after the date hereof of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Revolving Loan Commitments or Letters of Credit or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within 10 Business Days after receipt by Company from such Lender of the statement referred to in Section 2.7A, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction.

C. Market for Bankers’ Acceptances. In the event that at any time subsequent to the giving of a Notice of Borrowing or Notice of Conversion/Rollover to Administrative Agent by Company with regard to any requested Bankers’ Acceptances, but before the date of the borrowing, Rollover or Conversion, as the case may be, the Administrative Agent makes a

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determination, which shall be conclusive and binding upon Company, absent manifest error, that there no longer exists an active market for Bankers’ Acceptances then:

(i) the right of Company to request Bankers’ Acceptances or BA Equivalent Advances from any Lender shall be suspended until Administrative Agent determines that the circumstances causing such suspension no longer exist, and so notifies Company;

(ii) any outstanding Notice of Borrowing requesting a Loan by way of Bankers’ Acceptances or BA Equivalent Advances shall (unless revoked by Company before the Funding Date) be deemed to be a Notice of Borrowing requesting a Loan by way of Prime Rate Loans in the amount specified in the original Notice of Borrowing;

(iii) any outstanding Notice of Conversion/Rollover requesting a Conversion of a Prime Rate Loan into Bankers’ Acceptances or BA Equivalent Advances shall be deemed to be revoked; and

(iv) any outstanding Notice of Conversion/Rollover requesting a Rollover of Bankers’ Acceptances or BA Equivalent Advances shall (unless revoked by Company before the Funding Date) be deemed to be a Notice of Conversion/Rollover requesting a Conversion of such Loans into Prime Rate Loans.

The Agent shall promptly notify Company and the Lenders of any suspension of Company’s right to request Bankers’ Acceptances or BA Equivalent Advances and of any termination of any such suspension.

D. Change in Law. If, after the date hereof, the adoption of any Applicable Law, regulation, treaty or official directive (whether or not having the force of law) or any change therein or in the interpretation or application thereof by any court or by any Governmental Authority or any other entity charged with the interpretation or administration thereof or compliance by a Lender with any request or direction (whether or not having the force of law) of any such authority or entity hereafter:

(i) subjects such Lender to, or causes the withdrawal or termination of a previously granted exemption with respect to, any Taxes (for the purposes of this subclause 2.6D, “Taxes” shall not include Taxes on such Lender’s overall income, and franchise taxes), or changes the basis of taxation of payments due to such Lender, or increases any existing Taxes on payments of principal, interest or other amounts payable by Company to such Lender under this Agreement;

(ii) imposes, modifies or deems applicable any reserve, liquidity, special deposit, regulatory or similar requirement against assets or liabilities held by, or deposits in or for the account of, or loans by such Lender, or any acquisition of funds for loans or commitments to fund loans or obligations in respect of undrawn, committed lines of credit or in respect of Bankers’ Acceptances accepted by such Lender;

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(iii) imposes on such Lender or requires there to be maintained by such Lender any capital adequacy or additional capital requirements (including a requirement which affects such Lender’s allocation of capital resources to its obligations) in respect of any Loan, Letter of Credit or obligation of such Lender hereunder, or any other condition with respect to this Agreement; or

(iv) directly or indirectly affects the cost to such Lender of making available, funding or maintaining any Loan, or issuing or participating in any Letter of Credit or otherwise imposes on such Lender any other condition or requirement affecting this Agreement or any Loan or any obligation of such Lender hereunder;

and the result of (i), (ii), (iii) or (iv) above, in the sole determination of such Lender acting in good faith, is:

(a) to increase the cost to such Lender of performing its obligations hereunder with respect to any Loan or Letter of Credit;

(b) to reduce any amount received or receivable by such Lender hereunder or its effective return hereunder or on its capital in respect of any Loan, Letter of Credit or any Revolving Loan Commitment; or

(c) to cause such Lender to make any payment with respect to or to forego any return on or calculated by reference to, any amount received or receivable by such Lender hereunder with respect to any Loan, Letter of Credit or any Revolving Loan Commitment;

such Lender shall determine that amount of money which shall compensate the Lender for such increase in cost, payments to be made or reduction in income or return or interest foregone (herein referred to as “Additional Compensation”). Upon a Lender having determined that it is entitled to Additional Compensation in accordance with the provisions of this Section, the Lender shall promptly so notify Company and Administrative Agent. The relevant Lender shall provide Company and Administrative Agent with a photocopy of the relevant law, rule, guideline, regulation, treaty or official directive (or, if it is impracticable to provide a photocopy, a written summary of the same) and a certificate of a duly authorized officer of such Lender setting forth the Additional Compensation and the basis of calculation therefor, which shall be conclusive evidence of such Additional Compensation in the absence of manifest error. Company shall pay to such Lender within 10 Business Days of the giving of such notice such Lender’s Additional Compensation. Each of the Lenders shall be entitled to be paid such Additional Compensation from time to time to the extent that the provisions of this Section are then applicable notwithstanding that any Lender has previously been paid any Additional Compensation.

2.7 Statement of Lenders; Obligation of Lenders to Mitigate.

A. Statements. Each Lender, Issuing Lender or Agent claiming compensation or reimbursement pursuant to subsection 2.6 or 2.7B shall deliver to Company (with a copy to

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Administrative Agent) a written statement, setting forth in reasonable detail the basis of the calculation of such compensation or reimbursement, which statement shall be conclusive and binding upon all parties hereto absent manifest error.

B. Mitigation. Each Lender, Issuing Lender and Agent agrees that, as promptly as practicable after the officer of such Person responsible for administering the Loans or Letters of Credit of such Person, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would entitle such Person to receive payments under subsections 2.6 or 2.9, use reasonable efforts to make, issue, fund or maintain the Commitments, Loans or Letters of Credit, as applicable, of such Person through another lending or letter of credit office of such Person, if (i) as a result thereof the additional amounts which would otherwise be required to be paid to such Person pursuant to subsection 2.6 or 2.9 would be materially reduced, and (ii) as determined by Person, acting reasonably, such action would not otherwise be disadvantageous to such Person; provided that such Person will not be obligated to utilize such other lending or letter of credit office pursuant to this subclause 2.7B unless Company agrees to pay all incremental expenses incurred by such Person as a result of utilizing such other lending or letter of credit office in connection with such Loans or Letters of Credit as described above.

2.8 Replacement of a Lender.

If Company receives a statement of amounts due pursuant to subsection 2.7A from a Lender, a Revolving Lender defaults in its obligations to fund a Revolving Loan pursuant to this Agreement, a Lender (a “Non-Consenting Lender”) refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to subsection 12.6, requires consent of 100% of the Lenders or 100% of the Lenders with Obligations directly affected, or a Lender has, pursuant to subsection 2.9, declared its obligations under this Agreement with respect to certain Loans to be terminated (any such Lender, a “Subject Lender”), so long as (i) no Potential Event of Default or Event of Default shall have occurred and be continuing and Company has obtained a commitment from another Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the Subject Lender’s Revolving Loan Commitments and all other obligations of the Subject Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any Letters of Credit outstanding (unless all such Letters of Credit are terminated or arrangements acceptable to such Issuing Lender (such as a “back-to-back” letter of credit) are made) and (iii), if applicable, the Subject Lender is unwilling to withdraw the notice delivered to Company pursuant to subsection 2.7 and/or is unwilling to remedy its default upon 10 days prior written notice to the Subject Lender and Administrative Agent and/or is unwilling to approve the applicable amendment, modification or waiver upon 5 days prior written notice to the Subject Lender and Administrative Agent, Company may require the Subject Lender to assign all of its Loans and Revolving Loan Commitments to such other Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection 12.1B, provided that, prior to or concurrently with such replacement, (1) the Subject Lender shall have received payment in full of all principal, interest, fees and other amounts (including all amounts under subsections 2.6 and/or 2.7B (if applicable)) owed to it through such date of replacement and a release from its obligations under the Loan Documents, (2) the processing fee required to be paid by subsection 12.1B(i) shall have been paid to Administrative Agent, (3) all of the requirements for such assignment contained in subsection 12.1B including the consent of Administrative Agent (if

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required) and the receipt by Administrative Agent of an executed Assignment Agreement and other supporting documents, have been fulfilled, and (4) in the event such Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the time of such assignment, to each matter in respect of which such Subject Lender was a Non-Consenting Lender and Company also requires each other Subject Lender that is a Non-Consenting Lender to assign its Loans and Revolving Loan Commitments.

2.9 Illegality.

If a Lender determines, in good faith, that the adoption of any Applicable Law, regulation, treaty or official directive (whether or not having the force of law) or any change therein or in the interpretation or application thereof by any court or by any Governmental Authority or any other entity charged with the interpretation or administration thereof or compliance by a Lender with any request or direction (whether or not having the force of law) of any such authority or entity, now or hereafter makes it unlawful or impossible for any Lender to make, fund or maintain a Loan, issue a Letter of Credit or maintain a Revolving Loan Commitment, or to give effect to its obligations in respect of such a Loan, Revolving Loan Commitment or a Letter of Credit, such Lender may, by written notice thereof to Company and to Administrative Agent (which shall include in reasonable detail an explanation of its determination) declare its obligations under this Agreement in respect of such Loan, Letter of Credit or Revolving Loan Commitment to be terminated whereupon the same shall, subject to subsection 2.7B, forthwith terminate, and Company shall, subject to subsection 2.7B, within the time required by such law (or at the end of such longer period as such Lender at its discretion has agreed), either effect a Conversion of such Loan in accordance with the provisions hereof (if such Conversion would resolve the unlawfulness or impossibility) or prepay the principal of such Loan, and collateralize such Letter of Credit, and pay accrued interest, such Additional Compensation as may be applicable with respect to such Loan to the date of such payment. If any such change shall only affect a portion of such Lender’s obligations under this Agreement which is, in the opinion of such Lender and Administrative Agent, severable from the remainder of this Agreement so that the remainder of this Agreement may be continued in full force and effect without otherwise affecting any of the obligations of Administrative Agent, the other Lenders or Company hereunder, such Lender shall only declare its obligations under that portion so terminated.

Section 3. BANKERS’ ACCEPTANCES

3.1 Acceptance of Bankers’ Acceptances; Form and Execution.

A. Bankers’ Acceptances. Pursuant to subsection 2.1A, Company may request, in accordance with the provisions of this subsection 3.1, from time to time during the period from the Closing Date to but excluding the 30^th day prior to the Revolving Loan Commitment Termination Date that the Lenders accept Bankers’ Acceptances issued by Company or make BA Equivalent Advances to Company. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, such Lenders shall accept such Bankers’ Acceptances, or make BA Equivalent Advances in lieu thereof, in accordance with the provisions of this subsection 3.1, provided that Company shall not request

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that any Lender having a Revolving Loan Commitment accept such Bankers’ Acceptances, or make BA Equivalent Advances (and no Lender shall do so) if, after giving effect to such issuance a Bankers’ Acceptance or BA Equivalent Advance would have a term ending later than the Revolving Loan Commitment Termination Date.

B. Applicable Provisions. The following provisions shall apply to each Bankers’ Acceptance hereunder:

(i) the face amount at maturity of each draft drawn by Company to be accepted as a Bankers’ Acceptance shall be Cdn. $100,000 and integral multiples thereof;

(ii) each draft drawn by Company and presented for acceptance by a Lender shall be drawn on the standard form of such Lender in effect at the time, specifying the BA Interest Period, provided that Administrative Agent may require the Lenders to use a generic form of Bankers’ Acceptance, in a form satisfactory to each Lender, acting reasonably, provided by Administrative Agent for such purpose in place of the Lenders’ own forms;

(iii) subject to subparagraph 3.1B(iv), Bankers’ Acceptances shall be signed by duly authorized officers of Company or, in the alternative, the signatures of such officers may be mechanically reproduced in facsimile thereon and Bankers’ Acceptances bearing such facsimile signatures shall be binding on Company as if they had been manually executed and delivered by such officers on behalf of Company. Notwithstanding that any person whose manual or facsimile signature appears on any Bankers’ Acceptance may no longer be an authorized signatory for Company on the date of issuance of a Bankers’ Acceptance, such signature shall nevertheless be valid and sufficient for all purposes as if such authority had remained in force at the time of such issuance and any such Bankers’ Acceptance shall be binding on Company; and

(iv) in lieu of Company signing Bankers’ Acceptances in accordance with subparagraph 3.1B(iii), and, for so long as the power of attorney in subparagraph 3.2A is in force with respect to a given Lender, such Lender shall execute and deliver Bankers’ Acceptances on behalf of Company in accordance with the provisions thereof and, for certainty, all references herein to drafts drawn by Company, Bankers’ Acceptances executed by Company or similar expressions shall be deemed to include Bankers’ Acceptances executed in accordance with a power of attorney, unless the context otherwise requires.

If and for so long as the power of attorney referred to in subsection 3.2A is in force with respect to each Lender, it is intended that pursuant to the DBNA, all Bankers’ Acceptances accepted by the Lenders (other than Old System Issuers) under this Agreement will be issued in the form of a “depository bill” (as defined in the DBNA), and deposited with a Clearing House. In order to give effect to the foregoing, Administrative Agent will, subject to the approval of Company and the Lenders (other than Old System Issuers), establish and notify Company and the Lenders of any additional procedures, consistent with the terms of this Agreement and the DBNA, as are reasonably necessary to accomplish such intention, including:

(a) any instrument held by Administrative Agent for the purposes of Bankers’ Acceptances will have marked prominently and legibly on its face and within its text, at or before the time of issue, the words “This is a depository bill subject to the Depository Bills and Notes Act (Canada)”;

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(b) any reference to the authentication of the Bankers’ Acceptance will be removed; and

(c) any reference to the “bearer” will be removed and such Bankers’ Acceptances will not be marked with any words prohibiting negotiation, transfer or assignment of it or of an interest in it.

3.2 Power of Attorney; Provision of Bankers’ Acceptances to Lenders.

A. Power of Attorney. As a condition precedent to each Lender’s obligation to accept Bankers’ Acceptances hereunder, Company hereby appoints each Lender, acting by any authorized signatory of the Lender in question, the attorney of Company:

(i) to sign for and on behalf and in the name of Company as drawer, drafts in such Lender’s standard form which are depository bills as defined in the DBNA, payable to a Clearing House ;

(ii) for drafts which are not depository bills, to sign for and on behalf and in the name of Company as drawer and to endorse on its behalf, Bankers’ Acceptances drawn on the Lender payable to the order of such Lender;

(iii) for BA Discount Notes, to sign for and on behalf and in the name of Company as drawer and to endorse on its behalf BA Discount Notes payable to the order of such Lender;

(iv) to fill in the amount, date and maturity date of such Bankers’ Acceptances (or BA Discount Notes as applicable); and

(v) to deposit and/or deliver such Bankers’ Acceptances which have been accepted by such Lender or such BA Discount Notes which are payable to the order of such Lender,

provided that such acts in each case are to be undertaken by the Lender in question strictly in accordance with instructions given to such Lender by Company as provided in this Section. For certainty, signatures of any authorized signatory of a Lender may be mechanically reproduced in facsimile on Bankers’ Acceptances (or BA Discount Notes as applicable) in accordance herewith and such facsimile signatures shall be binding and effective as if they had been manually executed by such authorized signatory of such Lender.

Instructions from Company to a Lender relating to the execution, completion, endorsement, deposit and/or delivery by that Lender on behalf of Company of Bankers’

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Acceptances (or BA Discount Notes as applicable) which Company wishes to submit to the Lender for acceptance by the Lender shall be communicated by Company in writing to Administrative Agent by delivery to Administrative Agent of Notices of Borrowing and Notices of Conversion/ Rollover, as the case may be, in accordance with this Agreement which, in turn, shall be communicated by Administrative Agent, on behalf of Company, to the Lender.

The communication in writing by Company, or on behalf of Company by Administrative Agent, to the Lender of the instructions set out in the Notices of Borrowing and Notice of Conversion/Rollover Notices referred to above shall constitute (a) the authorization and instruction of Company to the Lender to sign for and on behalf and in the name of Company as drawer the requested Bankers’ Acceptances (or BA Discount Notes as applicable) and to complete and/or endorse Bankers’ Acceptances (or BA Discount Notes as applicable) in accordance with such information as set out above, and (b) the request of Company to the Lender to accept such Bankers’ Acceptances and deposit the same with a Clearing House or deliver the same, as the case may be, in each case in accordance with this Agreement and such instructions. Company acknowledges that a Lender shall not be obligated to accept any such Bankers’ Acceptances except in accordance with the provisions of this Agreement.

A Lender shall be and it is hereby authorized to act on behalf of Company upon and in compliance with instructions communicated to that Lender as provided herein if the Lender reasonably believes such instructions to be genuine. If a Lender accepts Bankers’ Acceptances pursuant to any such instructions, that Lender shall confirm particulars of such instructions and advise Administrative Agent that it has complied therewith by notice in writing to Administrative Agent in accordance with the provisions hereof. A Lender’s actions in compliance with such instructions, confirmed and advised to Administrative Agent by such notice, shall be prima facie evidence of having been in accordance with the instructions of Company.

B. Revocation. The power of attorney in subsection 3.2A may be revoked by Company with respect to any particular Lender at any time upon not less than 5 Business Days’ prior written notice served upon the Lender in question and Administrative Agent, provided that no such revocation shall reduce, limit or otherwise affect the obligations of Company in respect of any Bankers’ Acceptance (or BA Discount Note as applicable) executed, completed, endorsed, deposited and/or delivered in accordance herewith prior to the time at which such revocation becomes effective. If the power of attorney is so revoked with respect to any Lender, Company shall, from time to time as required by the applicable Lenders, provide to Administrative Agent for delivery to each such Lender drafts drawn in blank by Company (pre-endorsed and otherwise in fully negotiable form, if applicable) in quantities sufficient for each such Lender to fulfill its obligations hereunder. Any such pre-signed drafts which are delivered by Company to Administrative Agent or a Lender shall be held in safekeeping by Administrative Agent or such Lender, as the case may be, with the same degree of care as if they were Administrative Agent’s or such Lender’s property, and shall only be dealt with by the Lenders and Administrative Agent in accordance herewith. No Lender shall be responsible or liable for its failure to make its share of any Bankers’ Acceptances required hereunder if the cause of such failure is, in whole or in part, due to the failure of Company to provide such pre-signed drafts to Administrative Agent (for delivery to such Lender) on a timely basis.

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C. Delivery of Drafts. By 11:00 a.m. (Toronto time) on the applicable Funding Date, Conversion or Rollover date, Company shall (i) either deliver to each Lender in Toronto, or, if previously delivered, be deemed to have authorized each Lender to complete and accept, or (ii) where the power of attorney in Section 3.2A is in force with respect to a Lender, be deemed to have authorized each such Lender to sign on behalf of Company, complete and accept, drafts drawn by Company on such Lender in a principal amount at maturity equal to such Lender’s share of the Bankers’ Acceptances specified by Company in the relevant Notice of Borrowing or Notice of Conversion/Rollover, as the case may be, as notified to the Lenders by Administrative Agent.

3.3 Mechanics of Issuance.

A. Apportionment. Upon receipt by Administrative Agent of a Notice of Borrowing or Notice of Conversion/Rollover from Company requesting the issuance of Bankers’ Acceptances, Administrative Agent shall promptly notify the Lenders thereof and advise each Lender of the aggregate face amount of Bankers’ Acceptances to be accepted and purchased by such Lender, the date of issue and the BA Interest Period for such Loan; the apportionment among the Lenders of the face amounts of Bankers’ Acceptances to be accepted by each Lender shall be determined by Administrative Agent by reference and in proportion to the respective applicable Revolving Loan Commitments of each Lender, provided that, when such apportionment cannot be evenly made, Administrative Agent shall round allocations amongst such Lenders consistent with Administrative Agent’s normal money market practices.

B. Rate Determination. On each date for borrowing, Rollover or Conversion involving the issuance of Bankers’ Acceptances:

(i) on or about 11:00 a.m. (Toronto time) on such date, Administrative Agent shall determine the CDOR Rate and shall obtain quotations from the Schedule II Reference Lenders in order to determine the BA Discount Rate then applicable to Bankers’ Acceptances accepted by such Schedule II Lender and Schedule III Lender in respect of an issue of Bankers’ Acceptances in a comparable amount and with comparable maturity to the Bankers’ Acceptances proposed to be issued on such date;

(ii) on or about 11:00 a.m. (Toronto time) on such date, Administrative Agent shall determine the BA Discount Rate applicable to each Lender and shall advise each Lender of the BA Discount Rate applicable to it;

(iii) each Lender shall complete and accept, in accordance with the Notice of Borrowing or Notice of Conversion/Rollover delivered by Company and advised by Administrative Agent in connection with such issue, its share of the Bankers’ Acceptances to be issued on such date and shall purchase such Bankers’ Acceptances for its own account at a purchase price which reflects the BA Discount Rate applicable to such issue; and

(iv) in the case of a borrowing, each Lender shall, for same day value on the Funding Date, remit the BA Discount Proceeds or advance the BA Equivalent Advance,

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as the case may be, payable by such Lender (net of the stamping fee payable to such Lender pursuant to Section 3.9) to Administrative Agent for the account of Company; Administrative Agent shall make such funds available to Company for same day value on such date.

C. Resale. Each Lender may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all Bankers’ Acceptances accepted and purchased by it for its own account.

3.4 Rollover of Bankers’ Acceptances.

In order to satisfy the liability of Company to a Lender for the face amount of maturing Bankers’ Acceptances accepted by such Lender, such Lender shall receive and retain for its own account the BA Discount Proceeds of new Bankers’ Acceptances issued on a Rollover, and Company shall on the maturity date of the Bankers’ Acceptances being rolled over pay to Administrative Agent for the account of the Lenders an amount equal to the difference between the face amount of the maturing Bankers’ Acceptances and the BA Discount Proceeds from the new Bankers’ Acceptances, together with the stamping fees to which the Lenders are entitled pursuant to Section 3.9.

3.5 Conversion into Bankers’ Acceptances.

In respect of Conversions into Bankers’ Acceptances, in order to satisfy the liability of Company to the Lenders for the amount of the converted Loan, each Lender shall receive and retain for its own account the BA Discount Proceeds of the Bankers’ Acceptances issued upon such Conversion, and Company shall on the date for Conversion pay to Administrative Agent for the account of the Lenders an amount equal to the difference between the principal amount of the converted Loan and the aggregate BA Discount Proceeds from the Bankers’ Acceptances issued on such Conversion, together with the stamping fees to which the Lenders are entitled pursuant to Section 3.9.

3.6 Conversion from Bankers’ Acceptances.

In order to satisfy the liability of Company to the Lenders for an amount equal to the aggregate face amount of the maturing Bankers’ Acceptances converted to another type of Loan, Administrative Agent shall record the obligation of Company to the Lenders as a Loan of the type into which such continuing liability has been converted.

3.7 BA Equivalent Advances.

Notwithstanding the foregoing provisions of this Article, a Non-Acceptance Lender shall, in lieu of accepting Bankers’ Acceptances, make a BA Equivalent Advance. The amount of each BA Equivalent Advance shall be equal to the BA Discount Proceeds which would be realized from a hypothetical sale of those Bankers’ Acceptances which, but for this Section, such Lender would otherwise be required to accept as part of such a borrowing, Conversion or Rollover of Bankers’ Acceptances. To determine the amount of such BA Discount

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Proceeds, the hypothetical sale shall be deemed to take place at the BA Discount Rate for such Loan. Any BA Equivalent Advance shall be made on the relevant Funding Date, or Rollover or Conversion date as the case may be and shall remain outstanding for the term of the relevant Bankers’ Acceptances. Concurrent with the making of a BA Equivalent Advance, a Non-Acceptance Lender shall be entitled to deduct therefrom an amount equal to the stamping fee which, but for this Section, such Lender would otherwise be entitled to receive as part of such Loan. Upon the maturity date for such Bankers’ Acceptances, Company shall pay to each Non-Acceptance Lender an amount equal to the face amount of the Bankers’ Acceptances which such Lender would have accepted as part of such Loan if it was not a Non-Acceptance Lender.

All references herein to “Loans” and “Bankers’ Acceptances” shall, unless otherwise expressly provided herein or unless the context otherwise requires, be deemed to include BA Equivalent Advances made by a Non-Acceptance Lender as part of a borrowing, Conversion or Rollover of Bankers’ Acceptances.

3.8 Termination of Bankers’ Acceptances.

If at any time a Lender ceases to accept Bankers’ Acceptances in the ordinary course of its business, such Lender shall be deemed to be a Non-Acceptance Lender and shall make BA Equivalent Advances in lieu of accepting Bankers’ Acceptances under this Agreement.

3.9 Stamping Fees.

Upon the acceptance by a Lender of a Bankers’ Acceptance, Company shall pay to Administrative Agent for the account of such Lender a stamping fee in Cdn. Dollars equal to 3.0% per annum calculated on the principal amount at maturity of such Bankers’ Acceptance and BA Equivalent Advances and for the period of time from and including the date of acceptance or advance to but excluding the maturity date of such Bankers’ Acceptance or BA Equivalent Advance and calculated on the basis of the number of days elapsed in a year of 365 days.

3.10 No Issuance, Conversion or Rollover during Default.

Notwithstanding the foregoing provisions of this Section 3, no Bankers’ Acceptance may be accepted, no BA Equivalent Advances may be made, no Prime Rate Loan may be subject to a Conversion into a Bankers’ Acceptance or BA Equivalent Advance and no Banker’s Acceptance or BA Equivalent Advance shall be subject to a Rollover after the occurrence and during the continuation of a Potential Event of Default or an Event of Default. After the occurrence and during the continuation of an Event of Default, outstanding Bankers’ Acceptances and BA Equivalent Advances shall convert to Prime Rate Loans at the end of the BA Interest Period applicable thereto.

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Section 4. LETTERS OF CREDIT

4.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.

A. Letters of Credit. In addition to Company requesting that Lenders make Loans by way of Prime Rate Loans and Bankers’ Acceptances pursuant to subsection 2.1A, Company may request, in accordance with the provisions of this subsection 4.1, from time to time during the period from the Closing Date to but excluding the 30^th day prior to the Revolving Loan Commitment Termination Date, that a Revolving Lender issue Letters of Credit for the account of Company for the purposes specified in the definition of Letters of Credit. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, any Lender may, but (except as provided in subsection 4.1B(ii) in respect of the Fronting Bank) shall not be obligated to, issue such Letters of Credit in accordance with the provisions of this subsection 4.1, provided that Company shall not request that any Revolving Lender issue (and no Revolving Lender shall issue):

(i) any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed Cdn. $30,000,000 minus the amount of any cash collateral provided by Company or its Subsidiaries pursuant to subsection 9.2A(iii) then held by or for the benefit of the providers of the Bonding Program as security therefor;

(ii) any Letter of Credit having an expiration date later than the earlier of (a) 10 days prior to the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such Letter of Credit, provided that the immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each unless such Issuing Lender elects not to extend for any such additional period; and provided further that such Issuing Lender shall not extend such Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 12.6) at the time such Issuing Lender must elect whether or not to allow such extension; or

(iii) any Letter of Credit issued for the purpose of supporting trade payables or indebtedness for borrowed money.

As of the Closing Date, each of the Existing BNPPC Letters of Credit shall be deemed to be a Letter of Credit issued and outstanding under this Agreement.

B. Mechanics of Issuance.

(i) Request for Issuance. Whenever Company desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent and the Fronting Bank a Request for Issuance no later than 12:00 noon (Toronto time) at least three Business Days, or such shorter period as may be agreed to by the Issuing Lender in any particular instance, in advance of the proposed date of issuance. The Issuing Lender, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any documents described in or attached to the Request for Issuance, and may require an application and/or indemnity of Company in such Issuing Lender’s customary form. In furtherance of the provisions of subsection 12.8, and not in limitation thereof, Company may submit Requests for Issuance by telefacsimile, and Administrative Agent and Issuing

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Lenders may rely and act upon any such Request for Issuance without receiving an original signed copy thereof. Unless the Issuing Lender otherwise agrees, no Letter of Credit shall require payment against a conforming demand for payment to be made thereunder on the same business day (under the laws of the jurisdiction in which the office of the Issuing Lender to which such demand for payment is required to be presented is located) that such demand for payment is presented if such presentation is made after 1:00 p.m. (in the time zone of such office of the Issuing Lender) on such business day.

Company shall notify the applicable Issuing Lender (and Administrative Agent, if Administrative Agent is not such Issuing Lender) prior to the issuance of any Letter of Credit in the event that any of the matters to which Company is required to certify in the applicable Request for Issuance is no longer true and correct as of the proposed date of issuance of such Letter of Credit, and upon the issuance of any Letter of Credit, Company shall be deemed to have re-certified, as of the date of such issuance, as to the matters to which Company is required to certify in the applicable Request for Issuance.

(ii) Determination of Issuing Lender. Upon receipt by Administrative Agent of a Request for Issuance pursuant to subsection 4.1B(i) requesting the issuance of a Letter of Credit, in the event Fronting Bank elects to issue such Letter of Credit, Administrative Agent shall promptly so notify Company, and Fronting Bank shall be the Issuing Lender with respect thereto. In the event that Fronting Bank, in its sole discretion, elects not to issue such Letter of Credit, Fronting Bank shall promptly so notify Company and Administrative Agent, whereupon Company may request any other Revolving Lender to issue such Letter of Credit by delivering to such Revolving Lender a copy of the applicable Request for Issuance. Any Revolving Lender so requested to issue such Letter of Credit shall promptly notify Company, Fronting Bank and Administrative Agent whether or not, in its sole discretion, it has elected to issue such Letter of Credit, and any such Revolving Lender that so elects to issue such Letter of Credit shall be the Issuing Lender with respect thereto, provided that if more than one Revolving Lender so elects to issue such Letter of Credit, Company shall determine which Revolving Lender shall be the Issuing Lender.

In the event that all other Revolving Lenders shall have declined to issue such Letter of Credit, notwithstanding the prior election of Fronting Bank not to issue such Letter of Credit, Fronting Bank shall be obligated to issue such Letter of Credit and shall be the Issuing Lender with respect thereto, notwithstanding the fact that the Letter of Credit Usage with respect to such Letter of Credit and with respect to all other Letters of Credit issued by Fronting Bank, when aggregated with Fronting Bank’s outstanding Revolving Loans, may exceed Fronting Bank’s Revolving Loan Commitment then in effect. If Fronting Bank has resigned as provided in subclause 11.5C and no successor Fronting Bank has been appointed at the time of a Request for Issuance, then, unless prior to the issuance the Company withdraws its Request for Issuance, each Revolving Lender shall issue or cause to be issued a Letter of Credit as to its own Pro Rata Share of each

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requested Letter of Credit, all of which taken together would aggregate the amount requested in the Request for Issuance.

(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance with subsection 12.6) of the conditions set forth in subsection 6.3, the Issuing Lender shall issue the requested Letter of Credit in accordance with the Issuing Lender’s standard operating procedures.

(iv) Notification to Revolving Lenders. Upon the issuance of or amendment to any Letter of Credit, the applicable Issuing Lender shall promptly notify Administrative Agent and Company of such issuance or amendment in writing and such notice shall be accompanied by a copy of such Letter of Credit or amendment. Upon receipt of such notice (or, if Administrative Agent is the Issuing Lender, together with such notice), Administrative Agent shall notify each Revolving Lender in writing of such issuance or amendment and the amount of such Revolving Lender’s respective participation in such Letter of Credit or amendment, and, if so requested by a Revolving Lender, Administrative Agent shall provide such Lender with a copy of such Letter of Credit or amendment.

C. Revolving Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Lender a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Revolving Lender’s Pro Rata Share of the maximum amount that is or at any time may become available to be drawn thereunder.

4.2 Letter of Credit Fees.

Company agrees to pay the following amounts with respect to Letters of Credit issued hereunder:

(i) with respect to each Letter of Credit, (a) a fronting fee, payable directly to the applicable Issuing Lender for its own account, equal to the greater of (X) Cdn.$500 and (Y) 0.25% per annum of the daily amount available to be drawn under such Letter of Credit and (b) a letter of credit fee, payable to Administrative Agent for the account of Revolving Lenders, equal to 3.0% per annum plus, upon the occurrence and during the continuance of an Event of Default, 2% per annum, multiplied by the daily amount available to be drawn under such Letter of Credit, each such fronting fee or letter of credit fee to be payable quarterly in arrears up to and including each March 31, June 30, September 30 and December 31 of each year and computed on the basis of a 365-day year for the actual number of days elapsed, and payable on the first Business Day of the month immediately following each such quarter;

(ii) with respect to the issuance, administration, amendment or transfer of each Letter of Credit and each payment of a drawing made thereunder (without duplication of the fees payable under clauses (i) and (ii) above), documentary and processing charges

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payable directly to the applicable Issuing Lender for its own account in accordance with such Issuing Lender’s standard schedule for such charges in effect at the time.

For purposes of calculating any fees payable under clauses (i) and (ii) of this subsection 4.2, the daily amount available to be drawn under any Letter of Credit shall be determined as of the close of business on any date of determination.

4.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.

A. Responsibility of Issuing Lender With Respect to Drawings. In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit.

B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the event an Issuing Lender has determined to honor a drawing under a Letter of Credit issued by it, such Issuing Lender shall immediately notify Company and Administrative Agent, and Company shall reimburse such Issuing Lender on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Cdn. Dollars and in same day funds equal to the amount of such payment, provided that, anything contained in this Agreement to the contrary notwithstanding, unless Company shall have notified Administrative Agent and such Issuing Lender prior to 11:00 a.m. (Toronto time) on the date such drawing is honored that Company intends to reimburse such Issuing Lender for the amount of such payment with funds other than the proceeds of Revolving Loans:

(i) Company shall be deemed to have given a timely Notice of Borrowing to Administrative Agent requesting Revolving Lenders to make Revolving Loans that are Prime Rate Loans on the Reimbursement Date in an amount equal to the amount of such payment, and

(ii) subject to satisfaction or waiver of the conditions specified in subsection 6.2 (other than 6.2A), Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that are Prime Rate Loans in the amount of such payment, the proceeds of which shall be applied directly by Administrative Agent to reimburse such Issuing Lender for the amount of such payment;

and provided, further that if for any reason proceeds of Revolving Loans are not received by such Issuing Lender on the Reimbursement Date in an amount equal to the amount of such payment, Company shall reimburse such Issuing Lender, on demand, in an amount in same day funds equal to the excess of the amount of such payment by Issuing Lender over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this subsection 4.3B shall be deemed to relieve any Revolving Lender from its obligation to make Revolving Loans on the terms and conditions set forth in this Agreement, and Company shall retain any and all rights it may have against any Revolving Lender resulting from the failure of such Revolving Lender to make such Revolving Loans under this subsection 4.3B.

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C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

(i) Payment by Revolving Lenders. In the event that Company shall fail for any reason to reimburse any Issuing Lender as provided in subsection 4.3B in an amount equal to the amount of any payment by such Issuing Lender under a Letter of Credit issued by it, such Issuing Lender shall promptly notify Administrative Agent, who shall promptly notify each Revolving Lender of the unreimbursed amount of such honored drawing and of such other Revolving Lender’s respective participation therein based on such Revolving Lender’s Pro Rata Share. Each Revolving Lender (other than such Issuing Lender) shall make available to Administrative Agent an amount equal to its respective participation, in Cdn. Dollars, in same day funds, at the Funding and Payment Office, not later than 12:00 noon (Toronto time) on the first Business Day after the date notified by Administrative Agent, and Administrative Agent shall make available to such Issuing Lender in Cdn. Dollars, in same day funds, at the office of such Issuing Lender on such Business Day the aggregate amount of the payments so received by Administrative Agent. In the event that any Revolving Lender fails to make available to Administrative Agent on such Business Day the amount of such Revolving Lender’s participation in such Letter of Credit as provided in this subsection 4.3C, such Issuing Lender shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the rate customarily used by such Issuing Lender for the correction of errors among banks for three Business Days and thereafter at the Prime Rate. Nothing in this subsection 4.3C shall be deemed to prejudice the right of Administrative Agent to recover, for the benefit of Revolving Lenders, from any Issuing Lender any amounts made available to such Issuing Lender pursuant to this subsection 4.3C in the event that it is determined by the final judgment of a court of competent jurisdiction that the payment with respect to a Letter of Credit by such Issuing Lender in respect of which payments were made by Revolving Lenders constituted gross negligence or willful misconduct on the part of such Issuing Lender.

(ii) Distribution to Lenders of Reimbursements Received From Company. In the event any Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 4.3C for all or any portion of any payment by such Issuing Lender under a Letter of Credit issued by it, and Administrative Agent or such Issuing Lender thereafter receives any payments from Company in reimbursement of such payment under the Letter of Credit, to the extent any such payment is received by such Issuing Lender, it shall distribute such payment to Administrative Agent, and Administrative Agent shall distribute to each other Revolving Lender that has paid all amounts payable by it under subsection 4.3C with respect to such payment such Revolving Lender’s Pro Rata Share of all payments subsequently received by Administrative Agent or by such Issuing Lender from Company. Any such distribution shall be made to a Revolving Lender at the account specified in subsection 2.4B(iii).

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D. Interest on Amounts Paid Under Letters of Credit.

(i) Payment of Interest by Company. Company agrees to pay to Administrative Agent, with respect to payments under any Letters of Credit issued by any Issuing Lender, interest on the amount paid by such Issuing Lender in respect of each such payment from the date a drawing is honored to but excluding the date such amount is reimbursed by Company (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 4.3B) at a rate equal to (a) for the period from the date such drawing is honored to but excluding the Reimbursement Date, the rate then in effect under this Agreement with respect to Revolving Loans that are Prime Rate Loans, and (b) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable under this Agreement with respect to Revolving Loans that are Prime Rate Loans. Interest payable pursuant to this subsection 4.3D(i) shall be computed on the basis of a 365-day year for the actual number of days elapsed in the period during which it accrues and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full.

(ii) Distribution of Interest Payments by Administrative Agent. Promptly upon receipt by Administrative Agent of any payment of interest pursuant to subsection 4.3D(i) with respect to a payment under a Letter of Credit,

(a) Administrative Agent shall distribute to (x) each Revolving Lender (including the Revolving Lender that paid such drawing) out of the interest received by Administrative Agent in respect of the period from the date such drawing is honored to but excluding the date on which the applicable Issuing Lender is reimbursed for the amount of such payment (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 4.3B), the amount that such Revolving Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period pursuant to subsection 4.2 if no drawing had been honored under such Letter of Credit, and (y) such Issuing Lender the amount, if any, remaining after payment of the amounts applied pursuant to clause (x), and

(b) in the event such Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 4.3C(i) for all or any portion of such payment, Administrative Agent shall distribute to each Revolving Lender (including such Issuing Lender) that has paid all amounts payable by it under subsection 4.3C(i) with respect to such payment such Revolving Lender’s Pro Rata Share of any interest received by Administrative Agent in respect of that portion of such payment so made by Revolving Lenders for the period from the date on which such Issuing Lender was so reimbursed to but excluding the date on which such portion of such payment is reimbursed by Company.

Any such distribution shall be made to a Revolving Lender at the account specified in subsection 2.4B(iii).

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4.4 Obligations Absolute.

The obligation of Company to reimburse each Issuing Lender for payments under the Letters of Credit issued by it and to repay any Revolving Loans made by Revolving Lenders pursuant to subsection 4.3B and the obligations of Revolving Lenders under subsection 4.3C(i) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances including any of the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit;

(ii) the existence of any claim, set-off, defense or other right which Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), any Issuing Lender or other Revolving Lender or any other Person or, in the case of a Revolving Lender, against Company, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured);

(iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(iv) payment by the applicable Issuing Lender under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit;

(v) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries;

(vi) any breach of this Agreement or any other Loan Document by any party thereto;

(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or

(viii) the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of such Issuing Lender under the circumstances in question (as determined by a final judgment of a court of competent jurisdiction).

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4.5 Nature of Issuing Lenders’ Duties.

As between Company and any Issuing Lender, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by such Issuing Lender by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, such Issuing Lender shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of such Issuing Lender, including any act or omission by a Governmental Authority, and none of the above shall affect or impair, or prevent the vesting of, any of such Issuing Lender’s rights or powers hereunder.

In furtherance and extension and not in limitation of the specific provisions set forth in the first paragraph of this subsection 4.5, any action taken or omitted by any Issuing Lender under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to Company.

Notwithstanding anything to the contrary contained in this subsection 4.5, Company shall retain any and all rights it may have against any Issuing Lender for any liability arising solely out of the gross negligence or willful misconduct of such Issuing Lender, as determined by a final judgment of a court of competent jurisdiction.

Section 5. SECURITY

5.1 Collateral Documents.

As continuing collateral security for the Obligations and the Secured Swap Obligations, Company shall deliver to Administrative Agent on behalf of Lenders, Swap Lenders and Agents (with copies to Collateral Agent) the following Loan Documents on or before the Closing Date (unless expressly indicated otherwise):

(i) the Holdings Guarantee executed by Holdings;

(ii) the Subsidiary Guarantee executed by each Subsidiary Guarantor;

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(iii) a Debenture issued by Company and by each Subsidiary Guarantor, together with a Deposit Instrument in respect of each;

(iv) the Holdings Pledge Agreement in respect of all issued and outstanding stock of Company;

(v) the Company Pledge Agreement in respect of all issued and outstanding stock of NACG and Finance Co.;

(vi) a Subsidiary Pledge Agreement executed by NACG in respect of all issued and outstanding stock of its directly held Subsidiaries;

(vii) a guarantee by Company of Secured Swap Obligations of Subsidiary Guarantors; and

(viii) following Closing, from time to time, all other Collateral Documents hereafter provided as collateral security for the Obligations and the Secured Swap Obligations in accordance with the provisions of this Agreement, including pursuant to subsection 8.9.

5.2 Registration.

Company shall, at its expense, and upon consultation with Administrative Agent and Collateral Agent, register, file or record the Collateral Documents (which requirement to register, file or record may be satisfied by the Collateral Agent) in all offices where such registration, filing or recording is necessary or of advantage to the creation, perfection and preservation of the security applicable to it, provided that:

(i) registration against specific real property interests need only be effected against those parcels identified in Schedule 7.5B, and

(ii) registration against specific vehicles or other equipment (security in respect of which can be registered in a personal property registry by way of serial number) need only be effected against those items identified in Schedule 7.5C;

until Administrative Agent, at the direction of the Requisite Lenders otherwise requests, which they may do at any time and from time to time.

Company shall, in consultation with Administrative Agent and Collateral Agent, amend and renew such registrations, filings and recordings from time to time as and when required to keep them in full force and effect or to preserve the priority established by any prior registration, filing or recording thereof.

To facilitate such ongoing perfection of the Collateral Documents, Company shall provide the Administrative Agent and Collateral Agent with 30 days (or such shorter period of time agree to by the Administrative Agent and Collateral Agent) prior written notice of any name

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change of any Loan Party and shall promptly notify Administrative Agent and Collateral Agent of:

(a) any change in the location of any Loan Party’s chief executive office,

(b) any acquisition (whether by purchase, lease or otherwise) of any property or assets which are intended to be used or kept outside of Alberta, British Columbia, Saskatchewan and Ontario by Company or any Subsidiary Guarantor or any relocation of existing assets outside said jurisdictions, and

(c) any of Company or Subsidiary Guarantor acquiring (whether by purchase, lease or otherwise, and including the purchase of previously leased equipment from the lessor thereof) an interest in individual real properties, or in vehicles or other equipment, security in respect of which can be registered in a personal property registry by way of serial number, and where any such asset has a cost or book value in excess of Cdn.$500,000, in the case of real property interests, or in excess of Cdn.500,000, in the case of such vehicles or other equipment,

and shall comply with the additional covenants set forth in the Collateral Documents with respect to the foregoing.

Company shall, at its expense, register, file or record the Collateral Documents (which requirement to register, file or record may be satisfied by the Collateral Agent) in all offices where such registration, filing or recording is necessary or of advantage to the creation, perfection and preserving of the security applicable to any interests that are the subject of clauses (c) and (d) above.

5.3 Sharing Collateral Documents.

Company and the Lenders agree and acknowledge that the Collateral Documents are being held by Collateral Agent to secure the Obligations and the Secured Swap Obligations on a pari passu basis. For purposes of the above sentence, pari passu basis means:

(i) with respect to the Lenders (other than the Issuing Lender), proportional between (a) the Obligations owed to Lenders having Revolving Loan Exposure, and (b) the aggregate of the Obligations plus the Secured Swap Obligations;

(ii) with respect to each Issuing Lender, proportional between (a) the Obligations owed to it on account of Letter of Credit Usage, and (b) the aggregate of the Obligations plus the Secured Swap Obligations; and

(iii) with respect to the Swap Lenders, proportional between (a) the Secured Swap Obligations and (b) the aggregate of the Obligations plus the Secured Swap Obligations.

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The Swap Lenders, as amongst themselves, will share their pro rata allocation of the Collateral Documents, as determined in paragraph (iii) above, based on a pro rata allocation of the aggregate outstanding Secured Swap Obligations (determined, if netting is legally available to a Swap Lender, on a net basis) owing to each Swap Lender.

If requested by any of Administrative Agent, Collateral Agent, the Requisite Lenders, an Issuing Lender or any Swap Lender, then each of Collateral Agent, Administrative Agent and the Swap Lenders will enter into such further intercreditor agreements and assurances as may be reasonably requested to further evidence the sharing provisions of this subsection. The parties hereto agree, and such further agreements shall confirm, that Swap Lenders shall be entitled to share in the proceeds of realization as aforesaid, but shall have no vote in respect of amounts owed to them, and shall not have the right to initiate the enforcement of, or participate in any decisions in respect of the enforcement of, any of the Loan Documents unless and until there is no Revolving Loan Exposure, and this Agreement has been terminated.

5.4 Form of Collateral Documents.

If Collateral Agent, acting reasonably, determines at any time and from time to time that the form and nature of the then existing Collateral Documents is deficient in any way or does not fully provide Agents and the Lenders and the Swap Lenders with the security and priority to which each is entitled hereunder, Company will forthwith execute and deliver or cause to be executed and delivered to Administrative Agent and Collateral Agent, at Company’s expense, such amendments to the Collateral Documents or provide such new security as Administrative Agent or Collateral Agent may reasonably request.

The forms of Collateral Documents shall have been or be prepared based upon the laws of Alberta and other Applicable Laws in effect at the date hereof. Collateral Agent shall have the right to require that:

(i) any such Collateral Documents be amended to reflect any changes in such laws, whether arising as a result of statutory amendments, court decisions or otherwise, in order to confer upon Collateral Agent the rights and remedies intended to be created thereby, and

(ii) Company and the Subsidiary Guarantors execute and deliver to Administrative Agent and Collateral Agent such other and further debentures, mortgages, trust deeds, assignments and security agreements as may be reasonably required to ensure Collateral Agent has and holds First Priority Liens on and against all of the property and assets of Company and the Subsidiary Guarantors for the benefit of the Agents, Lenders and the Swap Lenders.

5.5 After-Acquired Property.

All property acquired by or on behalf of Company or a Subsidiary Guarantor after the date of execution of the Collateral Documents (hereinafter collectively referred to as “After-Acquired Property”), will be subject to the charges and security interests of the Debentures,

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without any further conveyance, mortgage, pledge, charge, assignment or other act on the part of such parties. Without limiting the effect of the preceding sentence, Company will from time to time, at the request of the Collateral Agent, acting reasonably, execute and deliver, or cause to be executed and delivered, and in consultation with Collateral Agent will cause to be registered (which requirement to register may be satisfied by the Collateral Agent), all at Company’s expense, such instruments supplemental to the Collateral Documents, in form and substance satisfactory to Collateral Agent, acting reasonably, as may be necessary or desirable to ensure that the Collateral Documents as amended and supplemented constitute in favour of Collateral Agent for the benefit of the Agents, the Lenders and the Swap Lenders a valid First Priority Lien over such After-Acquired Property as required hereunder.

5.6 Continuing Collateral Documents.

Each item or part of the Collateral Documents shall for all purposes be treated as a separate and continuing collateral security and shall be deemed to have been given in addition to and not in place of any other item or part of the Collateral Documents or any other security now held or hereafter acquired by Administrative Agent, Collateral Agent or the Lenders. No item or part of the Collateral Documents shall be merged or be deemed to have been merged in or by this Agreement or any documents, instruments or acknowledgements delivered hereunder, or any simple contract debt or any judgment, and any realization of or steps taken under or pursuant to any security, instrument or agreement shall be independent of and not create a merger with any other right available to the Lenders, the Collateral Agent or Administrative Agent under any security, instruments or agreements held by it or at law or in equity.

5.7 Dealing with Collateral Documents.

Administrative Agent, with the consent of Requisite Lenders to the extent required by subsection 12.6, may grant extensions of time or other indulgences, accept compositions, and otherwise deal with Company and other parties as Administrative Agent may see fit, and may, subject to Section 5.3, during the existence of an Event of Default, apply all amounts received from Company or others or from securities (including the Collateral Documents or any part thereof) upon such part of the liabilities of Company hereunder or under any of the Collateral Documents as Administrative Agent may think best, without prejudice to or in any way limiting the liability of Company and its Subsidiaries under this Agreement or under any of the Collateral Documents or any other collateral security.

5.8 Effectiveness.

The Collateral Documents shall be effective, and the undertakings as to the Collateral Documents herein or in any other Loan Document shall be continuing, whether any Loans or Letters of Credit are then outstanding or any amounts thereby secured or any part thereof shall be owing before or after, or at the same time as, the creation of such Collateral Documents or before or after or upon the date of execution of any amendments to this Agreement.

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5.9 Release and Discharge of Collateral Documents.

Except to the extent set forth in Section 11.6 and 12.14, 12.15, the Loan Parties shall not be discharged from the Collateral Documents or any part thereof except by a written release and discharge signed by Collateral Agent with the prior written consent of all Lenders and Swap Lenders. If all of the Obligations and Secured Swap Obligations have been repaid, paid, satisfied and discharged, as the case may be, in full and the credit facilities established hereby have been fully cancelled, then the Collateral Documents shall be released and discharged by Collateral Agent, the Lenders and the Swap Lenders. Collateral Agent, at the cost and expense of Company, shall from time to time do, execute and deliver, or cause to be done, executed and delivered, all such agreements, instruments, certificates, financing statements, notices and other documents and all acts, matters and things as may be reasonably requested by Company to give effect to, establish, evidence or record the foregoing release and discharge.

5.10 Transfer of Collateral Documents.

If GE Canada Finance Holding Company, in its capacity as Collateral Agent, or any successor thereto, in its capacity as Collateral Agent ceases to be Collateral Agent, such departing agent shall transfer and assign all of the Collateral Documents to the replacement agent.

Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT.

The effectiveness of this Agreement and the obligations of Lenders to make Loans and to issue Letters of Credit hereunder, are subject to the satisfaction of the following conditions.

6.1 Conditions to Closing.

The effectiveness of this Agreement and the obligations of Lenders to make Loans and to issue Letters of Credit on the Closing Date are, in addition to the conditions precedent specified in subsection 6.2, subject to prior or concurrent satisfaction of the following conditions:

A. Loan Party Documents. On or before the Closing Date, Company shall, and shall cause each other Loan Party to, deliver to Administrative Agent (with sufficient originally executed copies, where appropriate, for each Lender and the Collateral Agent) the following with respect to Company or such Loan Party, as the case may be, each, unless otherwise noted, dated the Closing Date:

(i) copies of the Organizational Documents of such Person, certified by the secretary or similar officer of the applicable Loan Party (or a certification that such Organizational Documents have not changed from the terms thereof delivered in connection with the Existing Credit Agreement), together with a good standing certificate issued by the applicable governmental official for its jurisdiction of organization and each other jurisdiction in which such Person is qualified to do business, each dated a recent date prior to the Closing Date;

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(ii) resolutions of the Governing Body of such Person approving and authorizing the execution, delivery and performance of the Loan Documents to which it is a party, certified as of the Closing Date by the secretary or similar officer of such Person as being in full force and effect without modification or amendment;

(iii) signature and incumbency certificates of the officers of such Person executing the Loan Documents to which it is a party;

(iv) executed originals of the Collateral Documents and each other Loan Document to which such Person is a party;

(v) lessor consents to all material leases of equipment and estoppel letters for such leased real property to the extent required by subsection 6.1H; and

(vi) such other documents as Administrative Agent or Collateral Agent may reasonably request.

B. Fees. Company shall have paid to Administrative Agent, for distribution (as appropriate) to Administrative Agent, Collateral Agent and Lenders, the fees and expenses payable on the Closing Date referred to in subsection 2.3.

C. Corporate and Capital Structure; Ownership.

(i) Corporate Structure. The corporate organizational structure of Holdings and its Subsidiaries shall be as set forth on Schedule 7.1 annexed hereto.

(ii) Capital Structure and Ownership. The capital structure and ownership of Holdings and its Subsidiaries shall be as set forth on Schedule 7.1 annexed hereto.

(iii) Management; Employment Contracts. The management structure of Holdings and its Subsidiaries shall be as set forth on Schedule 7.1 annexed hereto, and Administrative Agent shall have received copies of, and shall be satisfied with the form and substance of, all employment contracts, if any, with senior management of any Loan Party and the results of background checks conducted on senior management of the Loan Parties.

D. Representations and Warranties; Performance of Agreements. Company shall have delivered to Administrative Agent an Officer’s Certificate, in form and substance satisfactory to Administrative Agent, to the effect that the representations and warranties in Section 7 are true, correct and complete in all material respects on and as of the Closing Date to the same extent as though made on and as of that date (or, to the extent such representations and warranties specifically relate to an earlier date, that such representations and warranties were true, correct and complete in all material respects on and as of such earlier date) and that Company shall have performed and satisfied all conditions which this Agreement provides shall be performed or satisfied by it on or before the Closing Date except as otherwise disclosed to and agreed to in writing by Agents, provided that, if a representation and warranty, covenant or

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condition is qualified as to materiality, with respect to such representation and warranty, covenant or condition the applicable materiality qualifier set forth above shall be disregarded for purposes of this condition.

E. Financial Statements; Pro Forma Balance Sheet. On or before the Closing Date, Lenders shall have received from Company (i) audited financial statements of Company and its Subsidiaries for the Fiscal Year ended March 31, 2004, consisting of balance sheets and the related consolidated statements of income and cash flows for such Fiscal Year, audited by independent public accountants of recognized national standing and prepared in conformity with Canadian GAAP (with reconciliation to U.S. GAAP), together with such accountants’ report thereon, (ii) unaudited financial statements of Company and its Subsidiaries for the fiscal quarters ended June 30, 2004, September 30, 2004 and December 31, 2004 (restated in the case of the statements for the fiscal quarters ended June 30, 2004 and September 30, 2004), consisting of a balance sheet and the related consolidated statements of income and cash flows for such periods, all in reasonable detail and certified by the chief financial officer of Company that they fairly present the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments, (iii) unaudited interim financial statements of the Company and its Subsidiaries for the fiscal periods most recently ended more than 45 days prior to the Closing Date (including without limitation unaudited monthly financial statements of Company and its Subsidiaries for the months ended January 31, 2005, February 28, 2005, and any subsequent month ended more than 45 days prior to the Closing Date), and (iv) projected consolidated financial statements (including balance sheets and statements of income and cash flows) of the Loan Parties for the five year period after the Closing Date.

F. Opinions of Counsel to Loan Parties. Lenders shall have received originally executed copies of one or more favorable written opinions of Borden Ladner Gervais LLP and Bracewell & Giuliani LLP, counsel for Loan Parties, in form and substance reasonably satisfactory to Agents and their counsel, dated as of the Closing Date and setting forth substantially the matters in the opinions designated in Exhibit XVIII and Exhibit XIX annexed hereto, respectively, and as to such other matters as Agents acting on behalf of Lenders may reasonably request (this Credit Agreement constituting a written request by Company to such counsel to deliver such opinions to Lenders).

G. Evidence of Insurance. Company shall have in effect insurance policies conforming to the requirement in subsection 8.4. Administrative Agent shall have received from the Company or its insurance broker copies of the policies evidencing the insurance maintained by the Company and its Subsidiaries, and evidencing that Collateral Agent has been named as additional insured and/or loss payee thereunder to the extent required under subsection 8.4, and shall have also have received a certificate from Company confirming that such insurance is in compliance with the requirements in subsection 8.4.

H. Necessary Governmental Authorizations and Consents; Expiration of Waiting Periods, Etc. Company shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or advisable in connection with the transactions contemplated by the Loan Documents and the continued operation of the business

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conducted by Company and its Subsidiaries in substantially the same manner as conducted prior to the Closing Date, except for consents and estoppel letters requested by the Lenders from equipment lessors and landlords (which Company shall use its commercially reasonable efforts to obtain after the Closing Date) and except in a case where the failure to obtain or maintain a Governmental Authorization or consent, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each such Governmental Authorization and consent shall be in full force and effect, except in a case where the failure to obtain or maintain a Governmental Authorization or consent, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose materially adverse conditions on the transactions contemplated by the Loan Documents. No action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable Governmental Authority to take action to set aside its consent on its own motion shall have expired.

I. Security Interests. Administrative Agent shall have received evidence satisfactory to it that Holdings, Company and Subsidiary Guarantors shall have taken or caused to be taken all such actions, executed and delivered or caused to be executed and delivered all such agreements, documents and instruments, and made or caused to be made all such filings and recordings (other than the filing or recording of items described in clauses (ii), (iii) and (iv) below) that may be necessary or, in the opinion of Administrative Agent, desirable in order to create in favor of Collateral Agent, for the benefit of the Agents and Lenders, a valid and (upon such filing and recording) perfected First Priority Lien in all present and after-acquired personal property Collateral. Such actions shall include the following:

(i) Stock Certificates and Instruments. Delivery, or satisfactory arrangements for delivery, to Collateral Agent of (a) certificates (which certificates shall be accompanied by irrevocable undated stock powers, duly endorsed in blank and otherwise satisfactory in form and substance to Collateral Agent) representing all Capital Stock pledged pursuant to the Holdings Pledge Agreement, the Company Pledge Agreement and the Subsidiary Pledge Agreements (if applicable), and (b) all promissory notes or other instruments (duly endorsed, where appropriate, in a manner satisfactory to Collateral Agent) evidencing any Collateral;

(ii) Lien Searches and Financing Change Statements. Delivery to Administrative Agent of:

(a) the results of a recent search, by a Person satisfactory to Agents, of all effective financing statements and fixture filings and all judgment lien filings which may have been made with respect to any property of any Loan Party, together with copies of all such filings disclosed by such search, and

(b) financing change statements duly executed by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate

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any effective financing statements or fixture filings disclosed in such search (other than any such financing statements or fixture filings in respect of Liens permitted to remain outstanding pursuant to the terms of this Agreement), or undertakings in respect of the foregoing executed by applicable Persons and acceptable to Administrative Agent.

(iii) Financing Statements. Delivery to Administrative Agent of confirmation of the filing of all financing statements in respect of each applicable Loan Party (if required) with respect to all Collateral of such Loan Party, for filing in all jurisdictions as may be necessary or, in the opinion of Administrative Agent, desirable to perfect the security interests created in such Collateral pursuant to the Collateral Documents, including the specific equipment referred to subsection 5.2;

(iv) Certificates of Registration, Etc. Delivery to Collateral Agent of copies of certificates of evidence of the accuracy of serial number descriptions satisfactory to Collateral Agent acting reasonably) with respect to the motor vehicles and other equipment of Loan Parties which are to be the subject of the specific equipment registrations referred to subsection 5.2 and the taking of all actions necessary to cause Collateral Agent to perfect the Lien granted to Collateral Agent on behalf of Lenders, Swap Lenders and Agents in such equipment, provided that such evidence not available on the Closing Date shall be provided to Collateral Agent within 60 days after the Closing Date; and

(v) Opinions of Local Counsel. Delivery to Agents of an opinion of counsel (which counsel shall be reasonably satisfactory to Agents) under the laws of each jurisdiction in which any Loan Party or Collateral is located with respect to the creation and perfection of the security interests in favor of Collateral Agent in such Collateral and such other matters governed by the laws of such jurisdiction regarding such security interests as Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to Administrative Agent.

J. Closing Date Mortgages; Closing Date Mortgage Opinions; Etc. Administrative Agent shall have received from Company and each applicable Subsidiary Guarantor:

(i) Closing Date Mortgages. Fully executed Mortgages (each a “Closing Date Mortgage” and, collectively, the “Closing Date Mortgages”), in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering each real property listed in Schedule 7.5B annexed hereto (each a “Closing Date Mortgaged Property” and, collectively, the “Closing Date Mortgaged Properties”).

(ii) Opinions of Local Counsel. An opinion of counsel (which counsel shall be reasonably satisfactory to Administrative Agent) in each jurisdiction in which a Closing Date Mortgaged Property is located with respect to the enforceability of the form(s) of Closing Date Mortgages to be recorded in such jurisdiction and such other

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matters as Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to Administrative Agent.

K. Updated Field Audit; Opening Borrowing Availability. Collateral Agent shall have received the results of an updated field audit, and the Borrowing Base on the Closing Date shall be sufficient in value, as determined by Collateral Agent, such that the amount of unrestricted cash and Cash Equivalents of the Credit Parties plus the Borrowing Availability, after giving effect to the extensions of credit to be made hereunder on the Closing Date, the issuance of the Senior Second Lien Secured Notes and the Equity Issuance, shall be at least $30,000,000.

L. Repayment of Existing Indebtedness and Release of Existing Liens. On the Closing Date, Company and its Subsidiaries shall have (a) repaid in full all of their respective obligations under the Existing Credit Agreement, (b) terminated all outstanding commitments to lend or make other extensions of credit thereunder, (c) delivered to Agents all documents or instruments necessary to release all Liens securing Indebtedness or other obligations of Company and/or its Subsidiaries thereunder (which requirement may be satisfied by a satisfactory undertaking by the administrative agent under the Existing Credit Agreement), and (d) with respect to any letters of credit outstanding thereunder that are not Existing BNPPC Letters of Credit, delivered all documents necessary to release all Liens securing such letters of credit and made arrangements satisfactory to Administrative Agent, acting reasonably, with respect to the cancellation of any letters of credit outstanding, the collateralization of such letters of credit, or the issuance of “back-to-back” Letters of Credit to support the obligations of Company and/or its Subsidiaries with respect thereto.

M. Solvency Assurances. On the Closing Date, Administrative Agent shall have received an Officer’s Certificate of Company dated the Closing Date, substantially in the form of Exhibit X annexed hereto and with appropriate attachments, in each case demonstrating that, after giving effect to the consummation of the transactions contemplated by the Loan Documents, Company and each guaranteeing Subsidiary Guarantor taken as a whole will be Solvent.

N. Issuance of Senior Second Lien Secured Notes and Preferred Stock; Use of Proceeds.

(i) Issuance of Senior Second Lien Secured Notes. On or before the Closing Date, Company shall have issued and sold not less than U.S.$60,481,000 in aggregate principal amount of Senior Second Lien Secured Notes at par.

(ii) Issuance of Preferred Stock. On or before the Closing Date, Company shall have issued and sold Series B New Preferred Stock to common shareholders of Parent pursuant to the Equity Issuance for cash and shall have received proceeds net of related legal costs and expenses of at least $7,300,000.

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(iii) Fees and Expenses. Fees and expenses related to the issuance of the Senior Second Lien Secured Notes (including underwriters discount), the Equity Issuance and the transactions contemplated under this Agreement shall not exceed $7,500,000.

(iv) Use of Proceeds by Company. On the Closing Date, Company shall have provided evidence satisfactory to Administrative Agent that the proceeds of the Senior Second Lien Secured Notes have been applied to repay in full all outstanding obligations under the Existing Credit Agreement on the Closing Date.

O. Related Documents. Administrative Agent shall have received a fully executed or conformed copy of each Related Document and any documents executed in connection therewith, each satisfactory in form and substance to Administrative Agent, or, in the case of Related Documents delivered to the lenders pursuant to the Existing Credit Agreement, an Officer’s Certificate certifying that the Related Documents as delivered are in full force and effect, and no provision thereof has been modified or waived in any respect since November 26, 2003.

P. Appraisals. Administrative Agent and Collateral Agent shall have received the Desktop Appraisal satisfactory in form and substance to Administrative Agent and Collateral Agent.

Q. Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

R. Environmental Reports. Agents shall have received reports and other information, in form, scope and substance reasonably satisfactory to Agents, regarding environmental matters relating to the Company, its Subsidiaries and its Facilities.

6.2 Conditions to All Loans.

The obligations of Lenders to make Loans (including the acceptance of Bankers’ Acceptances) on each Funding Date are subject to the following further conditions precedent:

A. Notice of Borrowing. Administrative Agent shall have received before that Funding Date, in accordance with the provisions of subsection 2.1B, a Notice of Borrowing, in each case signed by a duly authorized Officer of Company.

B. Officer’s Certificate. Administrative Agent shall have received on each Funding Date, an Officer’s Certificate certifying (i) a written calculation of the Canadian Dollar equivalent amount of the outstanding principal amount of the Second Lien Secured Notes as of such day based on the Bank of Canada nominal noon exchange rate for the immediately prior day, and (ii) that the requested Loan is permitted to be incurred as “Permitted Indebtedness”

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under the Senior Note Indenture and that the Liens securing the same constitute “Permitted Liens” thereunder, and demonstrating in a manner reasonably satisfactory to the Administrative Agent, the calculations supporting such conclusions.

C. Funding Condition. As of that Funding Date:

(i) after giving effect to the Revolving Loans and/or Letters of Credit requested on such Funding Date, (1) the Total Utilization of Revolving Loan Commitments shall not exceed the Revolving Loan Commitments then in effect, and (2) the First Lien Exposure shall not exceed the Borrowing Base then in effect;

(ii) the representations and warranties contained herein and in the other Loan Documents shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date, provided, that, if a representation and warranty is qualified as to materiality, with respect to such representation and warranty, the materiality qualifier set forth above shall be disregarded for purposes of this condition;

(iii) no event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated by such Notice of Borrowing that would constitute an Event of Default or a Potential Event of Default;

(iv) each Loan Party shall have performed in all material respects all agreements and satisfied all conditions (other than those already satisfied or waived under subsection 6.1) which this Agreement provides shall be performed or satisfied by it on or before that Funding Date; and

(v) no order, judgment or decree of any arbitrator or Governmental Authority shall purport to enjoin or restrain any Lender from making the Loans or issuing any Letter of Credit to be made by it on that Funding Date.

6.3 Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder (whether or not the applicable Issuing Lender is obligated to issue such Letter of Credit) is subject to the following conditions precedent:

A. Initial Loans. On or before the date of issuance of the initial Letter of Credit pursuant to this Agreement, the Closing Date shall have occurred.

B. Request for Issuance. On or before the date of issuance of such Letter of Credit, Administrative Agent shall have received, in accordance with the provisions of subsection 4.1B(i), an originally executed Request for Issuance (or a facsimile copy thereof) in each case

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signed by a duly authorized Officer of Company, together with all other information specified in subsection 4.1B(i) and such other documents or information as the applicable Issuing Lender may reasonably require in connection with the issuance of such Letter of Credit.

C. Funding Conditions. On the date of issuance of such Letter of Credit, all conditions precedent described in subsections 6.2A, 6.2B (assuming such Letter of Credit was a Loan) and 6.2C shall be satisfied.

6.4 Waiver.

The conditions set forth in Sections 6.1, 6.2 and 6.3 are inserted for the sole benefit of the Lenders and Administrative Agent and may be waived by the Requisite Lenders (in the case of Section 6.2 and 6.3) and by all of the Lenders (in the case of Section 6.1), in whole or in part (with or without terms or conditions) without prejudicing the right of the Lenders or Administrative Agent at any time to assert such waived conditions in respect of the making of any subsequent Loan or Letter of Credit to the extent that it applies thereto.

Section 7. COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce Revolving Lenders to purchase participations therein, Company represents and warrants to Administrative Agent, Collateral Agent and each Lender:

7.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.

A. Organization and Powers. Each of Holdings and its Subsidiaries is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization as specified in Schedule 7.1 annexed hereto. Each of Holdings and its Subsidiaries has all requisite corporate or partnership power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

B. Qualification and Good Standing. Each of Holdings and its Subsidiaries is qualified to do business and is in good standing in every jurisdiction in which the location of its assets or the conduct of its business require it to be so qualified and in good standing, except in jurisdictions where the failure to be so qualified or in good standing has not had and could not reasonably be expected to result in a Material Adverse Effect.

C. Conduct of Business. Holdings and its Subsidiaries are engaged only in the businesses permitted to be engaged in pursuant to subsections 9.10, 10.13 and 10.14.

D. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date and their jurisdictions of organization are identified in Schedule 7.1 annexed hereto, as said Schedule 7.1 may be supplemented from time to time pursuant to the provisions of subsection

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8.1(xii). The Capital Stock of each of the Subsidiaries of Company identified in Schedule 7.1 annexed hereto (as so supplemented), is duly authorized, validly issued, fully paid and nonassessable (in each case to the extent such legal concept is applicable to such type of Capital Stock) and none of such Capital Stock constitutes Margin Stock. Schedule 7.1 annexed hereto (as so supplemented) correctly sets forth the ownership interest of Company and each of its Subsidiaries in each of the Subsidiaries of Company identified therein.

7.2 Authorization of Borrowing, etc.

A. Authorization of Borrowing. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto.

B. No Conflict. The execution, delivery and performance by Loan Parties of the Loan Documents and the Related Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents and the Related Documents do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, the Organizational Documents of Holdings or any of its Subsidiaries or any order, judgment or decree of any court or other Governmental Authority binding on Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material Contractual Obligation of Holdings or any of its Subsidiaries including, without limitation, the existing Senior Note Indenture, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Collateral Agent on behalf of Lenders, Swap Lenders and Agents), or (iv) require any approval of stockholders or any approval or consent of any Person under any material Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date and disclosed in writing to Lenders.

C. Governmental Consents. The execution, delivery and performance by Loan Parties of the Loan Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents do not and will not require any Governmental Authorization, except as have been obtained, or are being obtained and listed in Schedule 7.2, or are registrations of the Collateral Documents being made pursuant to Section 5.2.

D. Binding Obligation. Each of the Loan Documents has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Person, enforceable against such Person in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

E. Issuance of Senior Second Lien Secured Notes. Company has the corporate power and authority to issue the Senior Second Lien Secured Notes. The Senior Second Lien Secured Notes, when issued and paid for, will be legally valid and binding obligations of

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Company, enforceable against Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability. The Senior Second Lien Secured Notes, when issued and sold, will either (a) have been registered or qualified under applicable securities laws or (b) be exempt therefrom.

7.3 Financial Condition.

Company has heretofore delivered to Administrative Agent, at Lenders’ request, the financial statements and information described in subsection 6.1E. All such statements other than pro forma financial statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position (on a consolidated basis) of the entities described in such financial statements as at the respective dates thereof and the results of operations and cash flows (on a consolidated basis) of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit, absence of footnotes and normal year-end adjustments. As of the Closing Date, neither Company nor any of its Subsidiaries has (and immediately following the funding of the initial Loans will not have) any Contingent Obligation, contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment that is not reflected in the foregoing financial statements or the notes thereto and, as of any Funding Date subsequent to the Closing Date, is not reflected in the most recent financial statements delivered to Administrative Agent pursuant to subsection 8.1 or the notes thereto and that, in any such case, is material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries (except to the extent incurred after the period covered by such financial statements and such incurrence is permitted by this Agreement and except for any such matter that need not, in accordance with GAAP, be reflected in such financial statements and which has been otherwise expressly disclosed to Administrative Agent in writing).

7.4 No Material Adverse Change; No Restricted Junior Payments.

Since March 31, 2004, no event or change has occurred that has resulted in or evidences, either in any case or in the aggregate, a Material Adverse Effect that is continuing. Neither Company nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Junior Payment or agreed to do so except as permitted by subsection 9.5. Company and its Subsidiaries are in compliance with all laws and regulations applicable to it where failure to be in compliance could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

7.5 Title to Properties; Liens; Real Property; Intellectual Property.

A. Title to Properties; Liens. Company and its Subsidiaries have (i) good, sufficient and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), or (iii) good title to (in the case of all other personal property), all of their respective properties and assets reflected in the financial statements referred to in subsection 7.3 or in the most recent financial statements delivered pursuant to subsection 8.1, in each case except (A) for assets disposed of since the date

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of such financial statements in the ordinary course of business, (B) as otherwise permitted under subsection 9.7, or (C) where failure to have such title could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as permitted by this Agreement, all such properties and assets are free and clear of Liens.

B. Real Property. As of the Closing Date, Schedule 7.5B annexed hereto contains a true, accurate and complete list of (i) all fee interests in any real property, and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) in real property, regardless of whether a Loan Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment. Except as specified in Schedule 7.5B annexed hereto, as of the Closing Date each agreement listed in clause (ii) of the immediately preceding sentence is in full force and effect and no defaults by any Loan Party currently exist thereunder, and Company does not have knowledge of any defaults by any third party currently existing thereunder, in any case where any such defaults could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each such agreement constitutes the legally valid and binding obligation of each applicable Loan Party, enforceable against such Loan Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.

C. Material Serial Number Equipment. As of the Closing Date, Schedule 7.5C annexed hereto contains a true, accurate and complete list of (i) all interests of any Loan Party in any vehicles or other equipment that can be registered in a personal property registry by way of serial number, regardless of whether the Loan Party is an owner or lessee thereof, and which vehicle or other equipment individually has a cost or book value of Cdn.$500,000 or more, and (ii) the serial numbers of such vehicles or other equipment. As of the Closing Date each lease agreement in respect of any vehicle or other equipment listed in Schedule 7.5C is in full force and effect and no defaults by any Loan Party currently exist thereunder, and Company does not have knowledge of any defaults by any third party currently existing thereunder, in any case where any such defaults could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each such agreement constitutes the legally valid and binding obligation of each applicable Loan Party, enforceable against such Loan Party in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.

D. Intellectual Property. As of the Closing Date, Company and its Subsidiaries own or have the right to use all Intellectual Property used in the conduct of their business, except where the failure to own or have such right to use in the aggregate could not reasonably be expected to result in a Material Adverse Effect. No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does Company know of any valid basis for any such claim, except for such claims that in the aggregate could not reasonably be expected to result in a Material Adverse Effect. The use of such Intellectual Property by Company and its Subsidiaries does not infringe on the rights of any Person, except for such claims and

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infringements that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. All applicable registrations of and applications for Intellectual Property, and all unregistered Intellectual Property, that are owned or licensed by Company or any of its Subsidiaries on the Closing Date and that are material to their respective operations are described on Schedule 7.5D annexed hereto.

7.6 Litigation; Adverse Facts.

There are no Proceedings (whether or not purportedly on behalf of Holdings or any of its Subsidiaries) before or by any court or other Governmental Authority (including any Environmental Claims) that are, to the knowledge of Company, threatened or pending against or by Holdings or any of its Subsidiaries or any property or operations of Holdings or any of its Subsidiaries and that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither Company, Holdings nor any of its Subsidiaries (i) is in violation of any Applicable Laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (ii) is subject to or in default with respect to any final judgments, writs, injunctions or decrees of any court or other Governmental Authority that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

7.7 Payment of Taxes.

Except to the extent permitted by subsection 8.3, all tax returns and reports of Holdings and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable, except where failure to do so could not reasonably be expected to have a Material Adverse Effect. Company knows of no proposed tax assessment against Holdings or any of its Subsidiaries that is not being contested by Holdings or such Subsidiary in good faith and by appropriate proceedings, provided that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

7.8 Performance of Agreements; Material Contracts.

A. Neither Company nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default, except in either case where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to result in a Material Adverse Effect.

B. Schedule 7.8 contains a true, correct and complete list of all the Material Contracts in effect on the Closing Date.

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C. All Material Contracts are in full force and effect and no material defaults by any Loan Party currently exist thereunder, and Company does not have knowledge of any material defaults by any third party currently existing thereunder.

7.9 Benefit Plans.

Company and its Subsidiaries have made full payment when due of all required contributions to any Benefit Plan except where failure to do so individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.

7.10 Certain Fees.

Except as provided in the Advisory Services Agreement, no broker’s or finder’s fee or commission will be payable by any Loan Party with respect to this Agreement or any of the transactions contemplated hereby, and Company hereby indemnifies Lenders against, and agrees that it will hold Lenders harmless from, any claim, demand or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses (including reasonable fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or liability.

7.11 Environmental Protection.

(i) Neither Company nor any of its Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to (a) any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(ii) There are and, to Company’s knowledge, have been no conditions, occurrences, or Hazardous Materials Activities that could reasonably be expected to form the basis of an Environmental Claim against Company or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(iii) All Governmental Authorizations required by Environmental Law for Hazardous Materials Activities of the Company or any of its Subsidiaries have been obtained by the Company or its Subsidiaries, as the case may be, and to the knowledge of the Company, are in full force and effect and the Company and its Subsidiaries have not committed a breach or default of any terms and conditions of such Governmental Authorizations that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(iv) Neither Company nor, to Company’s knowledge, any of its Subsidiaries, is aware of any event or circumstances which are reasonably expected to result in any Governmental Authorizations for any Hazardous Materials Activities not being renewed, extended or replaced in the ordinary course by a Governmental Authority over the expiry

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of such Governmental Authorizations, in any case where, individually or in the aggregate, such non-renewal could reasonably be expected to result in a Material Adverse Effect.

(v) Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.

Except where any obligations or liabilities resulting therefrom, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither Company’s nor any of its Subsidiaries nor, to Company’s knowledge, any predecessor of Company or any of its Subsidiaries’ operations or Facilities involves or involved the generation, transportation, treatment, storage or disposal of Hazardous Materials over any limits or quantities or in concentrations in excess of limits, quantities or concentrations prescribed by Environmental Laws or any applicable Governmental Authorizations.

7.12 Employee Matters.

There is no strike or work stoppage in existence or threatened involving Company or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.

7.13 Solvency.

As of the Closing Date (after giving effect to the transactions contemplated hereby on such date), Company is, and Company and its Subsidiaries taken as a whole are, Solvent. As of each Funding Date, upon the incurrence of any Loans by, or the issuance of Letters of Credit for the account of, any Loan Party on such date, Company is, and Company and its Subsidiaries taken as a whole are, Solvent.

7.14 Matters Relating to Collateral.

A. Creation, Perfection and Priority of Liens. The execution and delivery of the Collateral Documents by the Loan Parties, together with (i) the actions that have been taken, and (ii) the delivery to Collateral Agent of any Pledged Collateral in accordance herewith, are effective to create in favor of Collateral Agent for the benefit of the Agents and Lenders, as security for the Obligations and the Secured Swap Obligations, a valid First Priority Lien on all of the Collateral, and all filings and other actions necessary or desirable to perfect and maintain the perfection and First Priority status of such Liens have been duly made or taken and remain in full force and effect.

B. Governmental Authorizations. No authorization, approval or other action by, and no notice to or filing with, any Governmental Authority is required on the part of or in respect of any Loan Party for either (i) the pledge or grant by any Loan Party of the Liens purported to be created in favor of Collateral Agent pursuant to any of the Collateral Documents or (ii) the exercise by Collateral Agent of any rights or remedies in respect of any Collateral

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(whether specifically granted or created pursuant to any of the Collateral Documents or created or provided for by Applicable Law), except for filings or recordings contemplated by subsection 7.14A.

C. Absence of Third-Party Filings. Except such as may have been filed in favor of Collateral Agent as contemplated by subsections 5.2 and 7.14A and to evidence permitted lease obligations and other Liens permitted pursuant to subsection 9.2A, (i) no effective financing statement, fixture filing, caveat, encumbrance or other instrument similar in effect covering all or any part of the Collateral is on file in any filing or recording office, and (ii) no effective filing covering all or any part of the IP Collateral is on file in any Canadian registry allowing or contemplating such filings.

D. Information Regarding Collateral. All information supplied to Administrative Agent and Collateral Agent by or on behalf of any Loan Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects.

7.15 Disclosure.

As of the Closing Date, no representation or warranty of Holdings or any of its Subsidiaries contained in any Loan Document, Related Document or in any other document, certificate or written statement furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact (known to Company, in the case of any document not furnished by it and not otherwise expressly disclosed in any other of the above-described documents) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Company to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results. There are no facts known (or which should upon the reasonable exercise of diligence be known) to Company (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in other documents, certificates and statements furnished to Lenders for use in connection with the transactions contemplated hereby.

7.16 Related Documents.

Company has delivered to Lenders complete and correct copies of each Related Document and of all exhibits and schedules thereto.

7.17 Accounts.

Except as disclosed in the written information provided to Administrative Agent, Collateral Agent and Lenders by Company, Administrative Agent and Collateral Agent may rely

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in all material respects upon all statements, warranties, or representations made in any Borrowing Base Certificate or other written report regarding accounts receivable delivered hereunder by Company in determining which items of Collateral are to be deemed Eligible Accounts Receivable.

7.18 Compliance with Existing Senior Notes.

As of each Funding Date, the Obligations in respect of the Loans to be made, and/or the Letters of Credit to be issued on such Funding Date are permitted to be incurred and the Liens securing the same are “Permitted Liens” under the Senior Note Indenture.

7.19 Deemed Repetition.

On each Funding Date:

(i) Representations True: each of the representations and warranties contained herein and in the other Loan Documents shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date (provided that if a representation and warranty is qualified as to materiality, with respect to such representation and warranty, the materiality qualifier set forth above shall be disregarded for purposes of this representation), and Company shall so confirm in the applicable Notice of Borrowing; and

(ii) No Default: Company shall be deemed to have represented to Administrative Agent and the Lenders that, except as has otherwise been notified to Administrative Agent in writing and has been waived in accordance herewith, no Potential Event of Default or Event of Default has occurred and is continuing nor will any such event occur as a result of the aforementioned borrowing.

Section 8. COMPANY’S AFFIRMATIVE COVENANTS

Company covenants and agrees that, so long as any of the Revolving Loan Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations (other than Unasserted Obligations), the satisfaction of all Bankers’ Acceptances and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give prior written consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 8.

8.1 Financial Statements and Other Reports.

Company will maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to

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permit preparation of financial statements in conformity with GAAP. Company will deliver to Administrative Agent, in sufficient copies for delivery to all Lenders:

(i) Events of Default, Filings, etc.: promptly (and in any event within five days) upon any Officer of Company obtaining knowledge:

(a) of any condition or event that constitutes an Event of Default or Potential Event of Default, or becoming aware that any Lender has given any notice (other than to Administrative Agent) or taken any other action with respect to a claimed Event of Default or Potential Event of Default,

(b) that any Person has given any notice to Company or any of its Subsidiaries or taken any other action with respect to a claimed default or event or condition of the type referred to in subsection 10.2,

(c) of any condition or event that would be required to be disclosed in a material change report filed by Company with the Alberta Securities Commission if Company were required to file such reports under the Securities Act (Alberta),

(d) of any default or claimed default under any lease of real property that has an aggregate value in excess of Cdn. $500,000, or any lease of vehicles or other equipment that has an aggregate value in excess of Cdn. $500,000, in either case that would entitle the lessor to terminate any lease in respect of such assets,

(e) of any written communication delivered to the Sellers or their advisors notifying them of a breach or potential breach of any representation or warranty of the Sellers under the Acquisition Agreement,

(f) the registration of a financing statement or other registration of a filing or recordation document which has the effect of perfecting any Liens securing the Bonding Program or the commencement of any enforcement action in respect of any such Liens; or

(g) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect,

an Officer’s Certificate specifying the nature and period of existence of such condition, event or change, or specifying the notice given or action taken by any such Person and the nature of such claimed Event of Default, Potential Event of Default, default, event or condition, and what action Company has taken, is taking and proposes to take with respect thereto;

(ii) Monthly and Quarterly Financials: monthly financial statements for the first two months of each Fiscal Quarter delivered as soon as available and in any event within 30 days (or 45 days in the case of months ending on or before November 30, 2005) after the end of the first two months of each Fiscal Quarter, and quarterly financial

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statements for the first three Fiscal Quarters of each Fiscal Year delivered within 45 days (or 60 days in the case of Fiscal Quarters ending on or before December 31, 2005) after the end of each of the first three Fiscal Quarters of each Fiscal Year,

(a) the consolidated balance sheet of Company and its Subsidiaries as at the end of such fiscal period and the related consolidated statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such fiscal period and for the period from the beginning of the then current Fiscal Year to the end of such fiscal period, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, to the extent prepared for such fiscal period, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments,

(b) a narrative report describing the operations of Company and its Subsidiaries in the form prepared for presentation to senior management for such fiscal period and for the period from the beginning of the then current Fiscal Year to the end of such fiscal period, and

(c) a listing of all Material Contracts entered into by a Loan Party in such fiscal period, together with a copy of each such Material Contract which is reasonably expected to generate gross revenue to the Loan Parties in excess of Cdn.$50,000,000 over the term of the contract and any expected renewals thereof.

(iii) Year-End Financials: as soon as available and in any event within 90 days after the end of each Fiscal Year (or 120 days with respect to the Fiscal Year ending March 31, 2005):

(a) the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of Company and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by such financial statements, all in reasonable detail and certified by the chief financial officer of Company that they fairly present, in all material respects, the financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated,

(b) a narrative report describing the operations of Company and its Subsidiaries in the form prepared for presentation to senior management for such Fiscal Year, and

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(c) in the case of such consolidated financial statements, a report thereon of one of the “Big 4” accounting firms or other independent chartered accountants of recognized national standing selected by Company and satisfactory to Administrative Agent, which report shall be unqualified, shall express no doubts, assumptions or qualifications concerning the ability of Company and its Subsidiaries to continue as a going concern, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Company and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

(iv) Compliance Certificates: together with each delivery of financial statements pursuant to subclauses (ii) and (iii) above,

(a) an Officer’s Certificate of Company stating that the signers have reviewed the terms of this Agreement and have made, or caused to be made under their supervision, a review in reasonable detail of the transactions and condition of Company and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signers do not have knowledge of the existence as at the date of such Officer’s Certificate, of any condition or event that constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto; and

(b) a Compliance Certificate demonstrating in reasonable detail compliance during and at the end of the applicable accounting periods with those covenants and restrictions contained in Section 9 set forth on the form of Compliance Certificate attached hereto; and

(c) except in the case of monthly financial statements, an Officer’s Certificate certifying a true and correct current list of equipment in which the Company or a Subsidiary Guarantor has an interest with a cost or book value in excess of $100,000 which sets forth the cost or book value, location and serial number of such equipment and confirming that neither the Company nor any Subsidiary Guarantor has any property or assets located in any jurisdiction other than Alberta, British Columbia, Saskatchewan and Ontario (or such other jurisdictions of which the Administrative Agent and Collateral Agent have previously received written notice);

(v) Reconciliation Statements: if, as a result of any change in accounting principles and policies from those used in the preparation of the audited financial

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statements referred to in subsection 7.3, the consolidated financial statements of Company and its Subsidiaries delivered pursuant to subclauses (ii), (iii) or (xii) of this subsection 8.1 will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subclauses had no such change in accounting principles and policies been made, then

(a) together with the first delivery of financial statements pursuant to subclause (ii), (iii) or (xii) of this subsection 8.1 following such change, consolidated financial statements of Company and its Subsidiaries for (y) the current Fiscal Year to the effective date of such change and (z) either (i) the two full Fiscal Years immediately preceding the Fiscal Year in which such change is made, in each case prepared on a pro forma basis as if such change had been in effect during such periods or (ii) a written description, in form and with detail reasonably satisfactory to Administrative Agent, of the impact such change would have had on the previous two full Fiscal Years if such change had been in effect during such periods, and

(b) together with each delivery of financial statements pursuant to subclause (ii), (iii) or (xii) of this subsection 8.1 following such change, if required pursuant to subsection 1.2, a written statement of the chief accounting officer or chief financial officer of Company setting forth the differences (including any differences that would affect any calculations relating to the financial covenants set forth in subsection 9.6) which would have resulted if such financial statements had been prepared without giving effect to such change;

(vi) Accountants’ Reports: promptly upon receipt thereof (unless restricted by applicable professional standards), copies of all reports submitted to Company by independent chartered accountants in connection with each annual, interim or special audit of the financial statements of Company and its Subsidiaries made by such accountants, including any comment letter submitted by such accountants to management in connection with their annual audit;

(vii) Securities Filings and Press Releases: promptly upon their becoming available, copies of:

(a) all regular and periodic reports and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Company or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission, the Alberta Securities Commission or any other governmental or private regulatory authority, and

(b) all press releases, notices of material changes, and other statements that the Company or any of its Subsidiaries would be required, if they were reporting issuers, to make available generally concerning material developments in the business of Company or any of its Subsidiaries.

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(viii) Litigation or Other Proceedings: promptly upon any Officer of Company obtaining knowledge of (1) the institution of any Proceeding against Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by Company to Lenders, (2) the Release of Hazardous Materials in violation of Environmental Laws or (3) any material development in any Proceeding that, in any case:

(a) has a reasonable possibility of giving rise to a Material Adverse Effect; or

(b) seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby;

written notice thereof together with such other information as may be reasonably available to Company to enable Lenders and their counsel to evaluate such matters

(ix) Financial Plans: as soon as practicable and in any event no later than 30 days prior to the beginning of each Fiscal Year, a consolidated plan and financial forecast for such Fiscal Year (the “Financial Plan” for such Fiscal Year), including (a) a forecasted consolidated balance sheet and forecasted consolidated statements of income and cash flows of Company and its Subsidiaries for such Fiscal Year, and an explanation of the assumptions on which such forecasts are based, (b) forecasted consolidated statements of income and cash flows of Company and its Subsidiaries for each month of such Fiscal Year, together with an explanation of the assumptions on which such forecasts are based, and (c) such other information and projections as Administrative Agent may reasonably request;

(x) Insurance: as soon as practicable after any material change in insurance coverage maintained by or for Company and its Subsidiaries notice thereof to Administrative Agent specifying the changes and reasons therefor;

(xi) Governing Body: with reasonable promptness, written notice of any change in the Governing Body of Holdings or Company;

(xii) New Subsidiaries: promptly upon any Person becoming a Subsidiary of Company, a written notice setting forth with respect to such Person (a) the date on which such Person became a Subsidiary of Company and (b) all of the data required to be set forth in Schedule 7.1 annexed hereto with respect to all Subsidiaries of Company (it being understood that such written notice shall be deemed to supplement Schedule 7.1 annexed hereto for all purposes of this Agreement from and after the date delivery of such notice);

(xiii) Material Contracts: promptly, and in any event within five Business Days after any Officer of the Company becomes aware that any Material Contract is terminated, will not be renewed, or is amended in a manner materially adverse to the

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Company and its Subsidiaries taken as a whole, a written statement describing such event with copies of such amendments (if applicable);

(xiv) Borrowing Base Certificates: with a copy to Collateral Agent, as soon as available and in any event within 10 Business Days after the last Business Day of each month ending after the Closing Date, a Borrowing Base Certificate dated as of the last Business Day of such month, together with any additional schedules and other information as Administrative Agent and Collateral Agent may reasonably request, provided that if and for so long as the First Lien Exposure exceeds the Borrowing Base then in effect, then Company shall prepare and provide Borrowing Base Certificates and related information on a weekly basis until Requisite Lenders otherwise direct. In addition to such monthly Borrowing Base Certificates, Company may from time to time deliver to Administrative Agent, Collateral Agent and Lenders on any Business Day after the Closing Date a Borrowing Base Certificate dated as of such Business Day, together with any additional schedules and other information as Administrative Agent or Collateral Agent may reasonably request, and the most recent Borrowing Base Certificate described in this clause that is delivered to Administrative Agent and Collateral Agent shall be used in calculating the Borrowing Base as of any date of determination;

(xv) Hedge Exposure: no later than the last day of each week, a written calculation of the mark to market liabilities of Company and its Subsidiaries under all Hedge Agreements in a form satisfactory to Administrative Agent; and

(xvi) Other Information: with reasonable promptness, such other information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent.

8.2 Existence, etc.

Except as permitted under subsection 9.7, Company will, and will cause each of its Subsidiaries to at all times preserve and keep in full force and effect (i) its existence as a corporation in the jurisdiction of organization specified on Schedule 7.1, and (ii) all rights and franchises material to its business, provided that neither Company nor any of its Subsidiaries shall be required to preserve any such right or franchise if the Governing Body of Company or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of Company or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to Company, such Subsidiary or Lenders.

8.3 Payment of Taxes and Claims; Tax.

A. Payment of Taxes. Except where failure to do so could reasonably be expected to have a Material Adverse Effect, Company will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by Applicable Law have or may become a Lien upon any

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of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto, provided that in the case of a tax, assessment, charge or claim that has or may become a Lien against any of the Collateral, Company shall either pay the same, or shall be contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted, and in that regard shall have established such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP and (ii) such proceedings shall be operating to stay the sale of any portion of the Collateral to satisfy such charge or claim.

B. Consolidated Returns. Company will not, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Holdings or any of its Subsidiaries).

8.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds.

A. Maintenance of Properties. Company will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of Company and its Subsidiaries (including all Intellectual Property) and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.

B. Insurance. Company will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, environmental insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Company and its Subsidiaries as may customarily be carried or maintained under similar circumstances by corporations of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for corporations similarly situated in the industry. Without limiting the generality of the foregoing, Company will maintain or cause to be maintained replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times satisfactory to Administrative Agent in its commercially reasonable judgment. Each such policy of insurance shall (a) name Collateral Agent for the benefit of the Agents and Lenders as an additional insured thereunder as its interests may appear and (b) in the case of each casualty insurance policy, contain a loss payable clause or endorsement, satisfactory in form and substance to Collateral Agent, that names Collateral Agent for the benefit of Lenders as the loss payee thereunder for any covered loss in excess of Cdn. $10,000,000 and provides for at least 30 days prior written notice to Collateral Agent of any modification or cancellation of such policy.

C. Application of Net Insurance/Condemnation Proceeds.

(i) Business Interruption Insurance. Upon receipt by Company or any of its Subsidiaries of any business interruption insurance proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing, Company or such Subsidiary may

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retain and apply such Net Insurance/Condemnation Proceeds for working capital purposes, and (b) if an Event of Default or Potential Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance/Condemnation Proceeds to prepay the Loans and/or collateralize Letters of Credit (and/or the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A;

(ii) Net Insurance/Condemnation Proceeds Received by Company. Upon receipt by Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds other than from business interruption insurance,

(a) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing, Company shall, or shall cause one or more of its Subsidiaries to, promptly and diligently apply such Net Insurance/Condemnation Proceeds to pay or reimburse the costs of repairing, restoring or replacing the assets in respect of which such Net Insurance/Condemnation Proceeds were received or, to the extent not so applied, to prepay the Loans, including collateralizing Bankers’ Acceptances (and/or Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A, and

(b) if an Event of Default or Potential Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance/Condemnation Proceeds to prepay the Loans, including collateralizing Bankers’ Acceptances (and/or the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A.

(iii) Net Insurance/Condemnation Proceeds Received by Collateral Agent. Upon receipt by Collateral Agent of any Net Insurance/Condemnation Proceeds as loss payee,

(a) if and to the extent Company would have been required to apply such Net Insurance/Condemnation Proceeds (if it had received them directly) to prepay the Loans, collateralize Bankers’ Acceptances and reduce the Revolving Loan Commitments, Collateral Agent shall deliver such Net Insurance/Condemnation Proceeds to Administrative Agent, and Administrative Agent shall, and Company hereby authorizes Administrative Agent to, apply such Net Insurance/Condemnation Proceeds to prepay the Loans and, collateralize Bankers’ Acceptances (and/or the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A, and

(b) to the extent the foregoing clause (a) does not apply, and (1) the aggregate amount of such Net Insurance/Condemnation Proceeds received (and reasonably expected to be received) by Collateral Agent in respect of any covered loss does not exceed Cdn.$10,000,000, Collateral Agent shall

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deliver such Net Insurance/Condemnation Proceeds to Company, and Company shall, or shall cause one or more of its Subsidiaries to, promptly apply such Net Insurance/Condemnation Proceeds to the costs of repairing, restoring, or replacing the assets in respect of which such Net Insurance/Condemnation Proceeds were received, and (2) if the aggregate amount of Net Insurance/Condemnation Proceeds received (and reasonably expected to be received) by Collateral Agent in respect of any covered loss exceeds Cdn.$10,000,000, Collateral Agent shall hold such Net Insurance/Condemnation Proceeds in the Collateral Account pursuant to the terms of the Debenture and, so long as Company or any of its Subsidiaries proceeds diligently to repair, restore or replace the assets of Company or such Subsidiary in respect of which such Net Insurance/Condemnation Proceeds were received, Collateral Agent shall from time to time disburse to Company or such Subsidiary from the Collateral Account, to the extent of any such Net Insurance/Condemnation Proceeds remaining therein in respect of the applicable covered loss, amounts necessary to pay the cost of such repair, restoration or replacement after the receipt by Collateral Agent of invoices or other documentation reasonably satisfactory to Collateral Agent relating to the amount of costs so incurred and the work performed (including, if required by Collateral Agent, lien releases and architects’ certificates), provided that if at any time Collateral Agent reasonably determines (A) that Company or such Subsidiary is not proceeding diligently with such repair, restoration or replacement or (B) that such repair, restoration or replacement cannot be completed with the Net Insurance/Condemnation Proceeds then held by Collateral Agent for such purpose, together with funds otherwise available to Company for such purpose, or that such repair, restoration or replacement cannot be completed within 170 days after the receipt by Collateral Agent of such Net Insurance/Condemnation Proceeds, Collateral Agent shall deliver such Net Insurance/Condemnation Proceeds to Administrative Agent, and Administrative Agent shall, and Company hereby authorizes Administrative Agent to, apply such Net Insurance/ Condemnation Proceeds to prepay the Loans, including collateralizing Bankers’ Acceptances (and/or the Revolving Loan Commitments shall be reduced) as provided in subsection 2.4A.

8.5 Inspection Rights; Lender Meeting.

A. Inspection Rights. Company shall, and shall cause each of its Subsidiaries to, permit any authorized representatives designated by Administrative Agent and Collateral Agent to visit and inspect any of the properties of Company or of any of its Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants (provided that Company may, if it so chooses, be present at or participate in any such discussion), and conduct financial and/or collateral audits and appraisals, including but not

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limited to NOLV Appraisals of Consolidated PP&E by an appraiser acceptable to Collateral Agent no more frequently than quarterly at the expense of Company, and more if requested by Agent at the expense of the Lenders, all upon reasonable notice and at such reasonable times during normal business hours.

At any time or from time to time following the occurrence and during the continuance of an Event of Default, at the request of the Collateral Agent, Company shall, and shall cause each of its Subsidiaries to, permit such visits and inspections, extractions, discussions, audits, and appraisals and shall further permit Administrative Agent and Collateral Agent to conduct such other environmental or property inspections, audits and appraisals as Administrative Agent or Collateral Agent deems appropriate, at the expense of Company, including but not limited to NOLV Appraisals of Consolidated PP&E by an appraiser acceptable to Collateral Agent.

B. Lender Meeting. Company will, upon the request of any Agent or Requisite Lenders, participate in a meeting of Agents and Lenders once during each Fiscal Year to be held at Company’s principal offices (or at such other location as may be agreed to by Company and Agents) at such time as may be agreed to by Company and Agents.

8.6 Compliance with Laws, etc.

Company shall comply, and shall cause each of its Subsidiaries to comply, with the requirements of all Applicable Laws, rules, regulations and orders of any Governmental Authority (including all Environmental Laws), noncompliance with which could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

8.7 Environmental Matters.

A. Environmental Disclosure. Company will deliver to Administrative Agent and Lenders:

(i) Environmental Audits and Reports. As soon as practicable following receipt thereof, copies of all environmental audits, assessments, studies, investigations, analyses and reports of any kind or character, whether prepared by personnel of Company or any of its Subsidiaries or by independent consultants, governmental authorities or any other Persons, with respect to significant environmental matters at any Facility that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect or with respect to any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon the occurrence thereof, written notice describing in reasonable detail (a) any Release required to be reported to any Governmental Authority or Person under any applicable Environmental Laws the existence of which could reasonably be expected to result in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse Effect, and (b) any remedial action taken by Company or any other Person

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required by Environmental Law or in response to (1) any Hazardous Materials Activities the existence of which could reasonably be expected to result in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse Effect, or (2) any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(iii) Written Communications Regarding Environmental Claims, Releases, Etc. As soon as practicable following the sending or receipt thereof by Company or any of its Subsidiaries, a copy of any and all written communications to or from any Governmental Authority or Person with respect to (a) any Environmental Claims that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, (b) any Release required to be reported to any Governmental Authority or Person that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, and (c) any request for information from any Governmental Authority investigating whether Company or any of its Subsidiaries may be potentially responsible for any Hazardous Materials Activity or violation of Environmental Laws that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt written notice describing in reasonable detail (a) any proposed acquisition of stock, assets, or property by Company or any of its Subsidiaries that could reasonably be expected to (1) expose Company or any of its Subsidiaries to, or result in, Environmental Claims that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, or (2) affect the ability of Company or any of its Subsidiaries to maintain in full force and effect all material Governmental Authorizations required under any Environmental Laws for their respective operations and (b) any proposed action to be taken by Company or any of its Subsidiaries to modify current operations in a manner that could reasonably be expected to subject Company or any of its Subsidiaries to any additional obligations or requirements under any Environmental Laws that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

B. Company’s Actions Regarding Hazardous Materials Activities, Environmental Claims and Violations of Environmental Laws.

(i) Remedial Actions Relating to Hazardous Materials Activities. Company shall, in compliance with all applicable Environmental Laws and Governmental Authorizations, promptly undertake, and shall cause each of its Subsidiaries promptly to undertake, any and all investigations, studies, sampling, testing, abatement, cleanup, removal, remediation or other response actions necessary to remove, remediate, clean up or abate any Hazardous Materials or Hazardous Materials Activity on, under or about any Facility or which originated from any Facility that is in violation of any Environmental Laws or Governmental Authorizations, and for which Company or any of its Subsidiaries is responsible under Applicable Law, or that presents a risk of giving rise to an Environmental Claim against Company or any of its Subsidiaries, in any case where

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individually or in the aggregate failure to do so could reasonably be expected to result in a Material Adverse Effect.

(ii) Actions with Respect to Environmental Claims and Violations of Environmental Laws. Company shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any violation of applicable Environmental Laws or Governmental Authorizations by Company or its Subsidiaries that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect and (ii) make an appropriate response to any Environmental Claim against Company or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder in any case where individually or in the aggregate failure to do so could reasonably be expected to result in a Material Adverse Effect.

8.8 First Priority Liens.

Company shall ensure that:

(i) subject only to subsection 8.9, all of its and its Subsidiaries’ present and after acquired property, both real and personal, is at all times subject to the Liens constituted by the Collateral Documents, and

(ii) such Liens at all times constitute First Priority Liens with respect to all such property, other than (A) property that is, in the opinion of the Administrative Agent and Collateral Agent, acting reasonably, immaterial, both individually and in the aggregate, in terms of its value and its use in the operations of Company and its Subsidiaries or (B) equipment which has been purchased or leased by Company or a Subsidiary of Company but which equipment has not yet entered the jurisdiction where the equipment will be used in the business of Company or such Subsidiary, so long as Company or such Subsidiary intends to bring such equipment into a jurisdiction where the Collateral Agent would have a First Priority Lien in such equipment, and Company or such Subsidiary does so as soon as practicable following such acquisition by purchase or lease.

8.9 Execution of Subsidiary Guarantee; Collateral Documents After the Closing Date; Further Assurances.

A. Execution of Subsidiary Guarantee and Personal Property Collateral Documents. In the event that any Person becomes a Subsidiary of Company after the date hereof, Company will promptly notify Administrative Agent of that fact and cause such new Subsidiary to execute and deliver to Administrative Agent a counterpart of, or joinder agreement in respect of, the Subsidiary Guarantee, and to issue a new Debenture and to take all such further actions and execute all such further documents and instruments (including actions, documents and instruments comparable to those described in subsection 6.1J) as may be necessary or, in the opinion of Administrative Agent, desirable to create in favor of Collateral Agent, for the benefit of Agents and Lenders, a valid and perfected First Priority Lien on all of the personal property

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and assets of such Subsidiary. In addition, (a) if the Capital Stock of such new Subsidiary is not owned directly by the Company or by a Subsidiary that has previously provided a Subsidiary Pledge Agreement that remains in effect, the Company shall cause the Subsidiary that owns the Capital Stock of such new Subsidiary, to execute and deliver to Administrative Agent a Subsidiary Pledge Agreement, (b) the Company shall deliver, or cause the Subsidiary that owns the Capital Stock of the new Subsidiary to deliver, to Collateral Agent all certificates representing the Capital Stock of such new Subsidiary (accompanied by irrevocable undated stock powers, duly endorsed in blank), and (c) the Company shall cause the new Subsidiary to become a party to the Company Pledge Agreement or Subsidiary Pledge Agreement, as applicable (in its capacity as the entity whose securities are the subject of such Pledge Agreement), either by executing any new Pledge Agreement or an addition agreement to any existing Pledge Agreement.

B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company shall deliver to Administrative Agent, together with the Loan Documents provided under subsection 8.9A,

(i) certified copies of such Subsidiary’s Organizational Documents, together with a good standing certificate from the appropriate governmental official of the jurisdiction of its organization and each other jurisdiction in which such Person is qualified to do business, each to be dated a recent date prior to their delivery to Administrative Agent,

(ii) a certificate executed by the secretary or similar officer of such Subsidiary as to (a) the fact that the attached resolutions of the Governing Body of such Subsidiary approving and authorizing the execution, delivery and performance of such Loan Documents are in full force and effect and have not been modified or amended and (b) the incumbency and signatures of the officers of such Subsidiary executing such Loan Documents,

(iii) a favorable opinion of counsel to such Subsidiary, in form and substance satisfactory to Administrative Agent, acting reasonably, as to (a) the due organization and good standing of such Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary of such Loan Documents, (c) the enforceability of such Loan Documents against such Subsidiary and (d) such other matters (including matters relating to the creation and perfection of Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent may reasonably request.

C. Further Assurances. In the event that any Loan Party delivers for the benefit of the holders of the Senior Second Lien Notes or the trustee thereof any landlord, lessor or bailee waiver, consent, or estoppel letter with respect to any real or personal property of the Company or any of its Subsidiaries, or takes any similar actions related to the Collateral for the benefit of the holders of the Senior Second Lien Notes, Company will promptly notify Administrative Agent of that fact and shall deliver to Administrative Agent the equivalent waiver, consent or estoppel letter with respect to such Collateral in favor of the Lenders, Agents and Swap Lenders.

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8.10 Cash Management. Within 30 days after the Closing Date, Company shall establish and maintain the cash management systems described below:

A. On or before the Closing Date, Company shall establish lock boxes (“Lock Boxes”) and blocked accounts (“Blocked Accounts”) at one or more of the banks set forth in Schedule 8.10. From the Closing Date until the Revolving Loan Commitment Termination Date, Company shall and shall cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later than the first Business Day after the date of receipt thereof, all cash, cheques, drafts or other similar items of payment relating to or constituting payments made in respect of any and all Collateral (whether or not otherwise delivered to a Lock Box) into one or more Blocked Accounts in Company’s name and at a bank identified in Schedule 8.10 (each, a “Relationship Bank”). On or before the Closing Date, Company shall also have established a concentration account in its name (the “Concentration Account”) at the bank that shall be designated as the Concentration Account bank for Company in Schedule 8.10 (the “Concentration Account Bank”) which bank shall be reasonably satisfactory to Collateral Agent.

B. Company may maintain, in its name, accounts (each a “Disbursement Account” and collectively, the “Disbursement Accounts”) at a bank acceptable to Collateral Agent, into which Administrative Agent shall, from time to time, deposit proceeds of Revolving Loans and Swing Line Loans made to Company for use by Company in accordance with the provisions of this Agreement.

C. On or before the Closing Date (or such later date as Collateral Agent may consent to in writing), the Concentration Account Bank, each bank where a Disbursement Account is maintained and all other Relationship Banks, shall have entered into tri-party blocked account agreements with Collateral Agent (for the benefit of itself, Administrative Agent and the Lenders) and Company, in form and substance reasonably acceptable to Collateral Agent (it being understood that the form of blocked account agreement attached as Exhibit XXII is acceptable to Collateral Agent), which shall become operative on or prior to the Closing Date. Each such blocked account agreement shall, unless otherwise agreed to by Collateral Agent in accordance with the immediately preceding sentence, provide, among other things, that (i) all items of payment deposited in such account and proceeds thereof deposited in the Concentration Account are held by such bank as agent or bailee in possession for Collateral Agent (for the benefit of itself, Administrative Agent and the Lenders), (ii) the bank executing such agreement has no rights of setoff or recoupment or any other claim against such account, as the case may be, other than (1) for payment of its service fees and other charges directly related to the administration of such accounts and the Disbursement Accounts maintained with such Relationship Bank, (2) for the amount of any required adjustments due to clerical error or calculation errors directly relating to such accounts or the Disbursement Accounts, (3) for returned cheques or other items of payment, (4) for clearing of Company’s cheques or other items of payment by Company or (5) in accordance with any court order, notice of garnishment or applicable law binding on such Relationship Bank, and (iii) from and after the Closing Date (A) with respect to banks at which a Blocked Account is maintained, such bank agrees, from and after the receipt of a notice (an “Activation Notice”) from Collateral Agent (which Activation Notice may be given by Collateral Agent at any time at which (1) an Event of Default has

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occurred and is continuing, (2) an event or circumstance having a Material Adverse Effect has occurred, or (3) Borrowing Availability plus cash and Cash Equivalents is less than $15,000,000 (any of the foregoing being referred to herein as an “Activation Event”)), to forward immediately all amounts in each Blocked Account to the Concentration Account Bank and to commence the process of daily sweeps from such Blocked Account into the Concentration Account, and (B) with respect to the Concentration Account Bank, such bank agrees from and after the receipt of an Activation Notice from Collateral Agent upon the occurrence of an Activation Event, to immediately forward all amounts received in the Concentration Account to the collection account (an account of Collateral Agent designated as such, the “Collection Account”) through daily sweeps from such Concentration Account into the Collection Account. From and after the date Collateral Agent has delivered an Activation Notice to any bank with respect to any Blocked Account(s), Company (1) shall not, and shall not cause or permit any Subsidiary thereof to, accumulate or maintain cash in Disbursement Accounts or payroll accounts as of any date of determination in excess of the sum of cheques outstanding against such accounts as of that date and $500,000, and (2) Company shall request in writing and otherwise take such reasonable steps to ensure that all account debtors of Company and each Subsidiary forward payment directly to its Lock Boxes, except for wire transfers made to the Concentration Account. If an Activation Notice has been delivered to any bank, and thereafter there shall have occurred a 180-day period during which, for the duration of such 180-day period, no Potential Event of Default or Event of Default shall have occurred and be continuing, (Y) no event or circumstance having a Material Adverse Effect has occurred and (Z) Borrowing Availability plus cash and Cash Equivalents shall have been greater than $15,000,000 at all times, Collateral Agent shall rescind such Activation Notice, and thereafter the Cash Management Systems shall operate on the basis set forth in this Section 8.10 as if no Activation Notice had been given.

D. So long as no Event of Default has occurred and is continuing, Company may amend Schedule 8.10 to add or replace a Relationship Bank, Lock Box or Blocked Account or to replace any Concentration Account or any Disbursement Account; provided that (i) Collateral Agent shall have consented in writing in advance to the opening of such account or Lock Box with the relevant bank, and (ii) prior to the time of the opening of such account or Lock Box, Company and such bank shall have executed and delivered to Collateral Agent a tri-party blocked account agreement, in form and substance reasonably satisfactory to Collateral Agent. Company shall close any of its accounts (and establish replacement accounts in accordance with the foregoing sentence) promptly and in any event within thirty (30) days following notice from Collateral Agent that the creditworthiness of any bank holding an account is no longer acceptable in Collateral Agent’s reasonable judgment, or as promptly as practicable and in any event within sixty (60) days following notice from Collateral Agent that the operating performance, funds transfer or availability procedures or performance with respect to accounts or Lock Boxes of the bank holding such accounts or Collateral Agent’s liability under any tri-party blocked account agreement with such bank is no longer acceptable in Collateral Agent’s reasonable judgment.

E. The Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration Account shall be cash collateral accounts, with all cash, cheques and other similar items of payment in such accounts securing payment of the Loans and all other Obligations and

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Lender Hedge Agreements, and in which Company shall have granted a Lien to Collateral Agent, on behalf of itself, the Agents, the Lenders and the Swap Lenders, pursuant to the Collateral Documents.

F. All amounts deposited in the Collection Account shall be deemed received by Collateral Agent. Upon receipt, Collateral Agent shall promptly (and in all events on the same Business Day received, so long as such amounts are deposited in the Collection Account no later than noon eastern time) deliver such amounts to Administrative Agent, and Administrative Agent shall, and Company hereby authorizes Administrative Agent to, apply such amounts to prepay the outstanding Loans and, collateralize Bankers’ Acceptances (without further reduction of the Revolving Loan Commitments).

G. Company shall, and shall cause its Affiliates, officers, employees, agents, directors or other Persons acting for or in concert with Company (each a “Related Person”) to, (i) hold in trust for Collateral Agent (for the benefit of itself, Administrative Agent and the Lenders) all cheques, cash and other items of payment received by Company or any such Related Person relating to or constituting payments made in respect of any and all Collateral, and (ii) within one (1) Business Day after receipt by Company or any such Related Person of any such cheques, cash or other items of payment, deposit the same into a Blocked Account. Company on behalf of itself and each Related Person acknowledges and agrees that all cash, cheques or other items of payment constituting proceeds of Collateral are part of the Collateral.

Section 9. COMPANY’S NEGATIVE COVENANTS

Company covenants and agrees that, so long as any of the Revolving Loan Commitments hereunder shall remain in effect and until payment in full of all of the Loans, the satisfaction of all Bankers’ Acceptances and other Obligations (other than Unasserted Obligations) and the cancellation or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise give prior written consent, Company shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 9.

9.1 Indebtedness.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guarantee, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except:

(i) Company may become and remain liable with respect to the Obligations;

(ii) (a) Company and its Domestic Subsidiaries may become and remain liable with respect to Contingent Obligations permitted by subsection 9.4 (excluding Section 9.4(vi)) and, (b) upon any matured obligations actually arising pursuant thereto, the Indebtedness corresponding to the Contingent Obligations so extinguished;

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(iii) Company and its Domestic Subsidiaries may become and remain liable with respect to Indebtedness in respect of Capital Leases aggregating not in excess of Cdn. $20,000,000 at any one time;

(iv) Company may become and remain liable with respect to Indebtedness to any Subsidiary Guarantor, and any wholly-owned Domestic Subsidiary of Company and Finance Co. may become and remain liable with respect to Indebtedness to Company or any Subsidiary Guarantor, provided that (a) a Lien on all such intercompany Indebtedness shall have been granted to Collateral Agent for the benefit of Agents and Lenders, and (b) if such intercompany Indebtedness is evidenced by a promissory note or other instrument, such promissory note or instrument shall have been pledged to Collateral Agent pursuant to a Debenture;

(v) Company and its Subsidiaries, as applicable, may remain liable with respect to Indebtedness described in Schedule 9.1 annexed hereto;

(vi) Company may remain liable with respect to Indebtedness evidenced by the Senior Notes in an aggregate principal amount not to exceed U.S. $200,000,000;

(vii) Company and its Subsidiaries may become and remain liable with respect to Indebtedness evidenced by the Senior Second Lien Secured Notes in an aggregate principal amount not to exceed U.S. $60,481,000; and

(viii) Company and its Domestic Subsidiaries may become and remain liable with respect to other Indebtedness in an aggregate principal amount not to exceed Cdn. $5,000,000 at any time outstanding.

9.2 Liens and Related Matters.

A. Prohibition on Liens. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Company or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, except:

(i) Permitted Encumbrances, provided that nothing in this Agreement shall be construed as postponing or subordinating the Liens of the Collateral Documents to any such Permitted Encumbrance;

(ii) Liens described in Schedule 9.2 annexed hereto;

(iii) other Liens securing obligations in an aggregate amount not to exceed Cdn.$5,000,000 at any time outstanding, provided that in the case of Liens securing the Bonding Program, to the extent that such obligations are also secured or supported by a Letter of Credit (or cash, to the extent permitted by subclause (iv) below), the face

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amount of such Letter of Credit (or the cash amount, as applicable) shall not count against the $5,000,000;

(iv) Liens on cash as security for the Bonding Program in an amount not to exceed Cdn.$30,000,000, but only if (a) at the time such Liens are granted, there is no Fronting Bank, and there is no other Revolving Lender or Revolving Lenders satisfactory to the providor(s) of the Bonding Program that have agreed to provide all Letters of Credit to serve as security therefor, and (b) after giving effect to the granting of such Liens, the sum of the amount of cash subject to such Liens plus the Letters of Credit Usage shall not exceed Cdn.$30,000,000; and

(v) Second Priority Liens on the Collateral securing Indebtedness permitted under subsection 9.1(vii) which Liens are subordinated pursuant to the Intercreditor Agreement.

Company shall not, and shall not permit any of its Subsidiaries to, permit to remain in effect for more than 30 days after it becomes aware of the same, any financing statement or other similar registration with respect to any property, asset, income or profits of any Loan Party under any security recording or notice statute, except for Liens permitted by this subsection 9.2, and filings or registrations in respect of interests that do not relate to Liens.

B. Equitable Lien in Favor of Lenders. If Company or any of its Subsidiaries shall create or assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than Liens excepted by the provisions of subsection 9.2A, it shall make or cause to be made effective provision whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness secured thereby as long as any such Indebtedness shall be so secured, provided that notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite Lenders to the creation or assumption of any such Lien not permitted by the provisions of subsection 9.2A.

C. No Further Negative Pledges. Neither Company nor any of its Subsidiaries shall enter into any agreement (other than the Senior Note Indenture, the Senior Second Lien Secured Note Indenture, or any agreement prohibiting only the creation of Liens securing Indebtedness subordinated in right of payment to the Obligations) prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired to secure Indebtedness under any senior credit facility, including this Agreement, except with respect to specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to an Asset Sale.

D. No Restrictions on Subsidiary Distributions to Company or Other Subsidiaries. Company will not, and will not permit any of its wholly-owned Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary’s Capital Stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or advances to Company or any

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other Subsidiary of Company, or (iv) transfer any of its property or assets to Company or any other Subsidiary of Company, except (a) as provided in this Agreement, (b) as may be provided in an agreement with respect to an Asset Sale, and (c) as provided in the Senior Note Indenture or the Senior Second Lien Secured Note Indenture.

9.3 Investments; Acquisitions.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including any Joint Venture, or acquire, by purchase or otherwise, all or substantially all the business, property or fixed assets of, or Capital Stock or other ownership interest of any Person, or any division or line of business of any Person except:

(i) Company and its Subsidiaries may make and own Investments in Cash and Cash Equivalents;

(ii) Company and its wholly-owned Domestic Subsidiaries may make and own additional equity Investments in their respective wholly-owned Domestic Subsidiaries and Finance Co.;

(iii) Company and its Subsidiaries may make intercompany loans to the extent permitted under subsection 9.1(iv);

(iv) Company and its Subsidiaries may make Consolidated Capital Expenditures;

(v) Company and its Subsidiaries may continue to own the Investments owned by them and described in Schedule 9.3 annexed hereto;

(vi) Company may acquire and hold obligations of one or more officers or other employees of Company or its Subsidiaries in connection with such officers’ or employees’ acquisition of shares of Holdings’ common stock, so long as no cash is actually advanced by Company or any of its Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;

(vii) Company and its Subsidiaries may receive and hold promissory notes and other non-cash consideration received in connection with any Asset Sale permitted by subsection 9.7;

(viii) Company and its Subsidiaries may, in the ordinary course of business, exchange accounts receivable that are excluded from Eligible Accounts Receivable under clause (vi) thereof, for Investments;

(ix) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby, Company and its Domestic Subsidiaries may make and own Permitted Joint Venture Investments in an aggregate amount not to exceed at any time Cdn.$10,000,000; provided that, for greater certainty,

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upon and during the occurrence and continuation of an Event of Default or Potential Event of Default, Company and its Domestic Subsidiaries may own all Permitted Joint Venture Investments then owned by it and them; and

(x) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby, Company and its Domestic Subsidiaries may make and own other Investments in an aggregate amount not to exceed at any time Cdn.$10,000,000; provided that, for greater certainty, upon and during the occurrence and continuation of an Event of Default or Potential Event of Default, Company and its Domestic Subsidiaries may own all Investments then owned by it and them.

For certainty, neither the acquisition nor the retirement of Senior Second Lien Secured Notes in connection with any exchange of exchange notes therefor (containing substantially identical terms (except that such exchange notes will not contain terms with respect to transfer restrictions or the accrual of liquidated damages) to the Senior Second Lien Secured Notes), as contemplated by the Senior Second Lien Secured Note Indenture shall constitute an Investment.

9.4 Contingent Obligations.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or become or remain liable with respect to any Contingent Obligation, except:

(i) Subsidiaries of Company may become and remain liable with respect to Contingent Obligations in respect of the Subsidiary Guarantee;

(ii) Company may become and remain liable with respect to Contingent Obligations in respect of Letters of Credit, and Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of other letters of credit in an aggregate amount not to exceed at any time Cdn. $5,000,000;

(iii) Company may become and remain liable with respect to Contingent Obligations under Currency Agreements with respect to Indebtedness under the Senior Second Lien Secured Notes and the Senior Notes;

(iv) Company may become and remain liable with respect to Contingent Obligations under the Lender Hedge Agreements;

(v) Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of customary indemnification and purchase price adjustment obligations incurred in connection with Asset Sales or other sales of assets;

(vi) Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of any obligations of Company or any Subsidiary Guarantors permitted by subsection 9.1 (excluding Section 9.1(ii)(a));

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(vii) Company and its Subsidiaries, as applicable, may remain liable with respect to Contingent Obligations described in Schedule 9.4 annexed hereto;

(viii) Subsidiary Guarantors may remain liable with respect to Contingent Obligations arising under their guarantees of the Senior Notes;

(ix) Subsidiary Guarantors may become and remain liable with respect to Contingent Obligations arising under their guarantees of the Senior Second Lien Secured Notes;

(x) Company and its Subsidiaries may become and remain liable for Contingent Obligations under the Bonding Program;

(xi) Company and Subsidiary Guarantors may become and remain liable with respect to any obligation of Company or another Subsidiary Guarantor incurred in the ordinary course of its business (the “Direct Obligation”)(for certainty, excluding obligations that are dealt with in the preceding clauses (i) through (x) of this Section 9.4) if the primary purpose or intent of the Company or Subsidiary Guarantor incurring the Contingent Obligation is to provide assurance to the obligee of the Direct Obligation that the Direct Obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such Direct Obligation will be protected (in whole or part) against loss in respect thereof; and

(xii) Company and its Domestic Subsidiaries may become and remain liable with respect to other Contingent Obligations, provided that the maximum aggregate liability, contingent or otherwise, of Company and its Domestic Subsidiaries in respect of all such other Contingent Obligations shall at no time exceed Cdn. $10,000,000.

9.5 Restricted Junior Payments.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment, provided that Company may make Restricted Junior Payments to Holdings:

(i) in an aggregate amount not to exceed Cdn. $1,000,000 in any Fiscal Year, to the extent necessary to permit Holdings to pay general administrative costs and expenses,

(ii) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby, in an aggregate amount not to exceed Cdn. $1,000,000 in any Fiscal Year, or Cdn. $5,000,000 during the term of this Agreement, for distribution to Parent to the extent necessary to permit Parent to repurchase shares of Parent Common Stock (or options or warrants to acquire Parent Common Stock) from employees of Company pursuant to the terms of the existing employee stock ownership plans as such plans may be modified, supplemented or replaced as approved by Agents, acting reasonably; and

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(iii) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby, to the extent necessary to permit Holdings to discharge its tax liabilities, so long as Holdings applies the amount of any such Restricted Junior Payment for such purpose.

9.6 Financial Covenants.

A. Minimum Fixed Charge Coverage Ratio. Company shall not permit the ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for (a) the period of April 1, 2005 through June 30, 2005, to be less than 0.45 to 1.00, (b) the period of April 1. 2005 through September 30, 2005, to be less than 0.65 to 1.00, (c) the period of April 1, 2005 through December 31, 2005, to be less than 0.65 to 1.00, and (d) for any four-Fiscal Quarter period ending during any of the periods set forth below to be less than the correlative ratio indicated:

Period	Minimum Fixed Charge Coverage Ratio
January 1, 2006 - March 31, 2006	1.05:1.00
April 1, 2006 - June 30, 2006	1.15:1.00
July 1, 2006 - September 30, 2006	1.20:1.00
October 1, 2006 - December 31, 2006	1.20:1.00
January 1, 2007 - March 31, 2007	1.20:1.00
April 1, 2007 - June 30, 2007	1.30:1.00
July 1, 2007 - September 30, 2007	1.35:1.00
October 1, 2007 - December 31, 2007	1.45:1.00
January 1, 2008 - March 31, 2008	1.55:1.00
April 1, 2008 - June 30, 2008	1.65:1.00
July 1, 2008 - September 30, 2008	1.70:1.00
October 1, 2008 - December 31, 2008	1.80:1:00
January 1, 2009 - March 31, 2009	1.80:1.00
April 1, 2009 - June 30, 2009	1.80:1.00
July 1, 2009 - September 30, 2009	1.80:1.00
October 1, 2009 - December 31, 2009	1.80:1:00
January 1, 2009 - Maturity	1.80:1:00

B. Maximum Leverage Ratio. Company shall not permit the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter ending during any of the periods set forth below to exceed the correlative ratio indicated:

Period	Maximum Leverage Ratio
April 1, 2005 - June 30, 2005	12.00:1.00
July 1, 2005 - September 30, 2005	10.25:1.00
October 1, 2005 - December 31, 2005	7.75:1.00
January 1, 2006 - March 31, 2006	7.25:1.00

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Period	Maximum Leverage Ratio
April 1, 2006 - June 30, 2006	6.45:1.00
July 1, 2006 - September 30, 2006	6.10:1.00
October 1, 2006 - December 31, 2006	5.70:1.00
January 1, 2007 - March 31, 2007	5.40:1.00
April 1, 2007 - June 30, 2007	5.20:1.00
July 1, 2007 - September 30, 2007	5.00:1.00
October 1, 2007 - December 31, 2007	4.80:1.00
January 1, 2008 - March 31, 2008	4.60:1.00
April 1, 2008 - June 30, 2008	4.40:1.00
July 1, 2008 - September 30, 2008	4.25:1.00
October 1, 2008 - December 31, 2008	4.10:1:00
January 1, 2009 - March 31, 2009	4.00:1.00
April 1, 2009 - June 30, 2009	4.00:1.00
July 1, 2009 - September 30, 2009	4.00:1.00
October 1, 2009 - December 31, 2009	4.00:1:00
January 1, 2009 - Maturity	4.00:1:00

C. Minimum Consolidated EBITDA. Company shall not permit Consolidated EBITDA for any four-Fiscal Quarter period ending during any of the periods set forth below to be less than the correlative amount indicated:

Period	Minimum Consolidated EBITDA
April 1, 2005 - June 30, 2005	$	29,000,000
July 1, 2005 - September 30, 2005	$	34,000,000
October 1, 2005 - December 31, 2005	$	45,000,000
January 1, 2006 - March 31, 2006	$	48,000,000
April 1, 2006 - June 30, 2006	$	54,000,000
July 1, 2006 - September 30, 2006	$	57,000,000
October 1, 2006 - December 31, 2006	$	61,000,000
January 1, 2007 - March 31, 2007	$	64,000,000
April 1, 2007 - June 30, 2007	$	67,000,000
July 1, 2007 - September 30, 2007	$	70,000,000
October 1, 2007 - December 31, 2007	$	73,000,000
January 1, 2008 - March 31, 2008	$	76,000,000
April 1, 2008 - June 30, 2008	$	80,000,000
July 1, 2008 - September 30, 2008	$	83,000,000
October 1, 2008 - December 31, 2008	$	86,000,000
January 1, 2009 - March 31, 2009	$	89,000,000
April 1, 2009 - June 30, 2009	$	89,000,000
July 1, 2009 - September 30, 2009	$	89,000,000
October 1, 2009 - December 31, 2009	$	89,000,000
January 1, 2009 - Maturity	$	89,000,000

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9.7 Restriction on Fundamental Changes; Asset Sales.

Company shall not, and shall not permit any of its Subsidiaries to, alter the corporate, capital or legal structure of Company or any of its Subsidiaries, or enter into any transaction of amalgamation, merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, property or assets (including its notes or receivables or Capital Stock of a Subsidiary, whether newly issued or outstanding), whether now owned or hereafter acquired, except:

(i) any Subsidiary of Company may be amalgamated or merged with or into Company or any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or dissolved, provided that in such case Company or such wholly-owned Subsidiary Guarantor shall be the continuing or surviving Person; or all or any part of the business, property or assets of any Subsidiary of Company may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Company or any wholly-owned Subsidiary Guarantor;

(ii) Company and its Subsidiaries may sell or otherwise dispose of assets in transactions that do not constitute Asset Sales, provided that with respect to all such dispositions having a fair market value in excess of $500,000, Company has provided an Officer’s Certificate certifying that the consideration to be received for such assets will be in an amount at least equal to the fair market value thereof;

(iii) Company and its Subsidiaries may dispose of obsolete, worn out or surplus property in the ordinary course of business;

(iv) Company and its Subsidiaries may make Asset Sales of assets having a fair market value not in excess of $15,000,000 in the aggregate in any Fiscal Year, provided that (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof, (b) at least 75% of the consideration received shall be cash, and (c) the proceeds of such Asset Sales shall be applied as required by subsection 2.4A(iii)(a) or subsection 2.4F;

(v) in order to resolve disputes (or to settle with non-paying account debtors) that occur in the ordinary course of business, Company and its Subsidiaries may discount or otherwise compromise for less than the face value thereof, notes or accounts receivable;

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(vi) Company or a Subsidiary may sell or dispose of shares of Capital Stock of any of its Subsidiaries in order to qualify members of the Governing Body of the Subsidiary if and to the extent required by Applicable Law; and

(vii) except for clause (i) above, any Person may be merged with or into Company or any Subsidiary of Company, and Company and/or Subsidiary of Company may amalgamate with any such Person, if the acquisition of the Capital Stock of such Person by Company or such Subsidiary would have been permitted pursuant to subsection 9.3, provided that:

(a) in the case of a merger with or into Company, Company shall be the continuing or surviving Person;

(b) in the case of any other merger, if a Subsidiary is not the surviving or continuing Person, the surviving Person becomes a Subsidiary of Company and complies with the provisions of subsection 9.8, and

(c) no Potential Event of Default or Event of Default shall have occurred or be continuing immediately after giving effect thereto.

9.8 Transactions with Shareholders and Affiliates.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of 5% or more of any class of equity Securities of Parent or Holdings or with any Affiliate of Company or Holdings or of any such holder:

(i) in the case of any agreement or arrangement pursuant to which any Loan Party is obligated to pay any amounts to Permitted Holders or any of their respective Affiliates, without the prior written consent of Administrative Agent, and

(ii) in all other cases, on terms that are less favorable to Company or that Subsidiary, as the case may be, than those that might be obtained at the time from Persons who are not such a holder or Affiliate,

provided that the foregoing restriction shall not apply:

(a) to any transaction between Company and any of its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries,

(b) to reasonable and customary fees paid to members of the Governing Bodies of Company and its Subsidiaries,

(c) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or shall be caused thereby, to payments of Management Fees in accordance with the Advisory Services Agreement and

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reimbursement of expenses of Permitted Holders as provided therein, in each case so long as such payment is permitted under subsection 9.5,

(d) to indemnification payments to officers or directors of Loan Parties, and customary board of directors fees and expenses, and

(e) to the extent the same would otherwise be prohibited by this Section 9.8, for certainty, to the provision of subcontracting services to Noramac for which the applicable Loan Party is paid an amount equal to the amount Noramac is paid by the counterparty to its contract taking into consideration the percentage of such work performed for Noramac by such Loan Party less any fees paid to the joint venture partner in Noramac.

9.9 Sales and Lease-Backs.

Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease, whether an Operating Lease or a Capital Lease, of any property (whether real or personal), whether now owned or hereafter acquired,

(i) that Company or any of its Subsidiaries has sold or transferred or is to sell or transfer to any other Person (other than Company or any of its Subsidiaries); or

(ii) that Company or any of its Subsidiaries intends to use for substantially the same purpose as any other property that has been or is to be sold or transferred by Company or any of its Subsidiaries to any Person (other than Company or any of its Subsidiaries) in connection with such lease;

provided that Company and its Subsidiaries may become and remain liable as lessee, guarantor or other surety with respect to any such lease if and to the extent that Company or any of its Subsidiaries would be permitted to enter into, and remain liable under, such lease to the extent that the transaction would be permitted under subsection 9.1, assuming the sale and lease back transaction constituted Indebtedness in a principal amount equal to the gross proceeds of the sale.

9.10 Conduct of Business.

From and after the Closing Date, Company shall not, and shall not permit any of its Subsidiaries to, engage in any business other than (i) the businesses engaged in by Company and its Subsidiaries on the Closing Date and similar or related businesses and (ii) such other lines of business as may be consented to by Requisite Lenders.

9.11 Amendments or Waivers of Certain Agreements.

A. Amendments or Waivers of Related Agreements. Neither Company nor any of its Subsidiaries will agree to any material amendment to, or waive any of its material rights under, any Related Document after the Closing Date without in each case obtaining the prior written consent of Requisite Lenders. Without limiting the foregoing, the Company will not,

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without obtaining the prior written consent of Requisite Lenders, amend the Equity Issuance Documentation to contain any mandatory put, redemption, repayment, sinking fund or other required cash payment (other than a liquidation preference) prior to the date that is 91 days after the Revolving Loan Commitment Termination Date or any covenant or event of default (other than any covenant restricting payments by the Company with respect to the common stock of the Company in violation of the liquidation preference of the Equity Issuance). For greater certainty, nothing herein shall prevent the assignment, after the Closing Date, of Series B New Preferred Stock to Persons who are common shareholders of the Parent or to an Affiliate of any such Person.

B. Amendments or Waivers with Respect to Senior Second Lien Secured Notes. Company shall not, nor shall it permit Holdings or any of its Subsidiaries to, amend, supplement or otherwise change the terms of the Intercreditor Agreement, the Senior Second Lien Secured Note Indenture, the Second Lien Collateral Documents or the Senior Second Lien Secured Notes or any related document, or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment, supplement or change is to increase the interest rate on the Senior Second Lien Secured Notes, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change any covenant to make such covenant more restrictive, change the redemption, prepayment or defeasance provisions thereof, add to the collateral securing the Senior Second Lien Secured Notes, or otherwise if the effect of such amendment or change is to increase the obligations of or restrictions applicable to Company, Holdings or any of its Subsidiaries or to confer any additional rights on the holders of the Senior Second Lien Secured Notes (or the trustee under the Senior Second Lien Secured Note Indenture or other representative on their behalf).

9.12 Fiscal Year.

Company shall not change its Fiscal Year end from March 31.

Section 10. EVENTS OF DEFAULT

If any of the following conditions or events (“Events of Default”) shall occur:

10.1 Failure to Make Payments When Due.

Failure by Company to pay principal of any Loan when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; failure by Company to pay when due any amount payable to an Issuing Lender in reimbursement of any drawing under a Letter of Credit; failure by Company to collateralize any Bankers’ Acceptance or Letter of Credit when required hereunder; or failure by Company to pay any interest on any Loan or any fee or any other amount due under this Agreement, on the date due; or

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10.2 Default in Other Agreements.

(i) Failure of Company or any of its Subsidiaries to pay when due any principal of or interest on one or more items of Indebtedness (other than Indebtedness referred to in subsection 10.1) or Contingent Obligations in an individual principal amount of Cdn.$5,000,000 or more or with an aggregate principal amount of Cdn.$7,500,000 or more, in each case beyond the end of any grace period provided therefor; or

(ii) breach or default by Company or any of its Subsidiaries with respect to any other term of (a) one or more items of Indebtedness or Contingent Obligations in the individual or aggregate principal amounts referred to in clause (i) above, or (b) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such failure, breach or default is to cause, or to permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or be declared due and payable prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be (upon the giving or receiving of notice, lapse of time, both, or otherwise); or

10.3 Breach of Certain Covenants.

Failure of Company to perform or comply with any term or condition contained in subsection 2.5 or 8.2(i) or Section 9 of this Agreement; or

10.4 Breach of Warranty.

Any representation, warranty, certification or other statement made by Holdings, Company or any of its Subsidiaries in any Loan Document or in any statement or certificate at any time given by Holdings, Company or any of its Subsidiaries in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made or deemed made (provided that if a representation and warranty is qualified as to materiality, with respect to such representation and warranty, the materiality qualifier set forth above shall be disregarded for purposes of this Section 10.4), provided that, if such false representation, warranty, certification or statement is capable of being corrected, and the applicable Loan Party causes such representation, warranty, certification or statement to be corrected by no later than 30 days after it is made or deemed made, the falseness of such representation, warranty, certification or statement shall not constitute an Event of Default; or

10.5 Other Defaults Under Loan Documents.

Any Loan Party shall default in the performance of or compliance with any term contained in this Agreement or any of the other Loan Documents, other than any such term referred to in any other subsection of this Section 10, and such default shall not have been remedied or waived within 30 days after the earlier of (i) an Officer of Company or such Loan Party becoming aware of such default or (ii) receipt by Company and such Loan Party of notice from Administrative Agent or any Lender of such default; or

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10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.

If any case, proceeding or other action shall be instituted in any court of competent jurisdiction, against Holdings, Company or any Subsidiary seeking in respect of such Person an adjudication in bankruptcy, reorganization of its indebtedness, dissolution, winding up, liquidation, a composition, proposal or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, receiver and manager, interim receiver, custodian, liquidator or any Person with similar powers with respect to such Person or of all or any substantial part of its assets, or any other like relief in respect of such Person under a Bankruptcy Law, the Partnership Act (Alberta) or any other bankruptcy, insolvency or analogous law and:

(i) such case, proceeding or other action results in an entry of an order for relief or any such adjudication or appointment; or

(ii) if such case, proceeding or other action is being contested in good faith and by appropriate proceedings, the same shall continue undismissed, or unstayed and in effect, for any period of 45 days past the commencement of such case, proceeding or action; or

10.7 Voluntary Insolvency.

If Company, Holdings or any Subsidiary:

(i) makes any assignment in bankruptcy or makes any other assignment for the benefit of creditors;

(ii) makes any proposal or seeks relief under a Bankruptcy Law or any comparable law, seeks relief under any other bankruptcy, insolvency or analogous law, or files a petition or proposal to take advantage of any act of insolvency;

(iii) consents to or acquiesces in the appointment of a trustee in bankruptcy, receiver, receiver and manager, interim receiver, custodian, sequestrator or other person with similar powers of itself or of all or any portion of its assets which is, in the opinion of the Requisite Lenders, material;

(iv) files a petition or otherwise commences any proceeding seeking any reorganization, arrangement, composition, administration or readjustment under any applicable bankruptcy, insolvency, moratorium, reorganization or other similar law affecting creditors’ rights;

(v) commits an act of bankruptcy under a Bankruptcy Law;

(vi) is adjudicated insolvent under a Bankruptcy Law, or admits in writing its inability to pay its debts as they become due; or

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(vii) consents to, or acquiesces in, the filing of such assignment, proposal, relief, petition, proposal, appointment or proceeding set out in this Section 10.7 (excluding clause (iii)) or takes any action to authorize or effect any of the foregoing; or

10.8 Judgments and Attachments.

Any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of Cdn. $5,000,000 or (ii) in the aggregate at any time an amount in excess of Cdn. $7,500,000 (in either case not adequately covered by insurance of a solvent unaffiliated insurance company that has not denied coverage in writing) shall be entered or filed against Company or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any event later than five days prior to the date of any proposed sale thereunder); or

10.9 Dissolution.

Any order, judgment or decree of a court of competent jurisdiction shall be entered against Holdings, Company or any of its Subsidiaries decreeing the dissolution or split up of Holdings, Company or that Subsidiary and such order shall remain undischarged or unstayed for a period in excess of 60 days; or

10.10  Seizure.

If property and assets of Company or any Subsidiary having an aggregate fair market value in excess of Cdn $5,000,000 is seized or otherwise attached by anyone pursuant to any legal process or other means, including distress, execution or any other step or proceeding with similar effect and such attachment, step or other proceeding shall continue in effect and not be released, discharged, bonded or stayed within 60 days; or

10.11  Change in Control.

A Change in Control shall have occurred; or

10.12  Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations.

At any time after the execution and delivery thereof:

(i) any Loan Document or any provision thereof, for any reason other than the satisfaction in full of all Obligations, shall cease to be in full force and effect (other than in accordance with its terms),

(ii) any Loan Document or any provision thereof shall be declared by a court of competent jurisdiction to be null and void,

(iii) Collateral Agent shall not have or shall cease to have a valid and perfected First Priority Lien in Collateral purported to be covered by the Collateral Documents, or

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(iv) any Loan Party shall contest the validity or enforceability of any Loan Document or any provision thereof in writing or deny in writing that it has any further liability, including with respect to future advances by Lenders, under any Loan Document or any provision thereof to which it is a party;

unless, in the case of clause (i) above, such unenforceability is capable of remedy and the applicable Loan Party remedies such unenforceability within 30 days of it being determined, or in the case of clause (ii) above such Loan Party appeals such declaration and has it finally overturned within 30 days of such declaration having been made, in which case the unenforceability, declaration or failure shall not constitute an Event of Default.

10.13  Conduct of Business By Holdings.

Holdings shall (i) engage in any business other than entering into and performing its obligations under and in accordance with the Loan Documents and Related Documents to which it is a party, and its obligations to bonding companies referred to in subclause (iii) below, (ii) own any assets other than (a) the capital stock of Company, and (b) Cash and Cash Equivalents in an amount not exceeding the amounts theretofore permitted to be distributed to Holdings under subsection 9.5 plus the aggregate amount of Net Securities Proceeds from the issuance of Capital Stock of Holdings or from any capital contribution to Holdings by any holder of the Capital Stock thereof not required to be applied to prepay the Loans pursuant to subsection 2.4A, or (iii) have any Indebtedness or other liability other than its obligations under the Holdings Guarantee or the Holdings Preferred Stock, or liabilities to bonding companies in respect of any Bonding Program; or

10.14  Conduct of Business by Finance Co.

Finance Co. shall (i) engage in any business other than entering into and performing its obligations under, in accordance with, and as contemplated in, the Loan Documents, the Senior Notes, the Senior Second Lien Secured Notes, any guarantee related to the Senior Second Lien Secured Notes or the Senior Notes, and Related Documents to which it is a party, or (ii) own any assets other than Loans made to a Loan Party, and any notes evidencing the same.

10.15  Amendment of Certain Documents of Holdings.

Holdings shall agree to any material amendment to, or waive any of its material rights under, or otherwise change any material terms of, any of the Acquisition Agreement or the Holdings Certificate of Designations, in each case as in effect on the Closing Date, in a manner adverse to Holdings or any of its Subsidiaries or to Lenders without the prior written consent of Administrative Agent and Requisite Lenders:

then:

Administrative Agent shall, upon the written request or with the written consent of Requisite Lenders, by written notice to Company, declare each of (a) the unpaid principal

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amount of and accrued interest on the Loans, (b) an amount equal to the aggregate face amount of all Bankers’ Acceptances and the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (whether or not any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents or certificates required to draw under such Letter of Credit), and (c) all other Obligations to be immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company to the extent permitted by Applicable Law, and the obligation of each Lender to make any Loan, the obligation of Fronting Bank to issue any Letter of Credit and the right of any Lender to issue any Letter of Credit hereunder shall thereupon terminate, provided that the foregoing shall not affect in any way the obligations of Revolving Lenders under subsection 4.3C(i) or the obligations of Revolving Lenders to purchase assignments of any unpaid Swing Line Loans as provided in subsection 2.1A(ii).

Any amounts described in clause (b) above, when received by Administrative Agent, shall be held by Administrative Agent pursuant to the terms of this Agreement and shall be applied as provided in subsection 2.4F.

Section 11. ADMINISTRATIVE AGENT AND COLLATERAL AGENT

11.1 Appointment.

A. Appointment of Administrative Agent. BNP PARIBAS (Canada) is hereby appointed Administrative Agent hereunder and under the other Loan Documents. Each Lender hereby authorizes Administrative Agent to act as its agent in accordance with the terms of this Agreement and the other Loan Documents. Administrative Agent agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and 11.6, the provisions of this Section 11 are solely for the benefit of Administrative Agent, Collateral Agent and Lenders and no Loan Party shall have rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties under this Agreement, Administrative Agent shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Company or any other Loan Party.

B. Appointment of Collateral Agent. GE Canada Finance Holding Company is hereby appointed Collateral Agent hereunder and under the other Loan Documents. Each Lender hereby authorizes Collateral Agent to act as its agent in accordance with the terms of this Agreement and the other Loan Documents. Collateral Agent agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and 11.6, the provisions of this Section 11 are solely for the benefit of Administrative Agent, Collateral Agent and Lenders and no Loan Party shall have rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties under this Agreement, Collateral Agent shall act solely as an agent of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Company or any other Loan Party.

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C. Appointment of Supplemental Collateral Agents. It is the purpose of this Agreement and the other Loan Documents that there shall be no violation of any law of any jurisdiction denying or restricting the right of banking corporations or associations to transact business as agent or trustee in such jurisdiction. It is recognized that in case of litigation under this Agreement or any of the other Loan Documents, and in particular in case of the enforcement of any of the Loan Documents, or in case Collateral Agent deems that by reason of any present or future law of any jurisdiction it may not exercise any of the rights, powers or remedies granted herein or in any of the other Loan Documents or take any other action which may be desirable or necessary in connection therewith, it may be necessary that Collateral Agent appoint an additional individual or institution as a separate trustee, co-trustee, collateral agent or collateral co-agent (any such additional individual or institution being referred to herein individually as a “Supplemental Collateral Agent” and collectively as “Supplemental Collateral Agents”).

In the event that Collateral Agent appoints a Supplemental Collateral Agent with respect to any Collateral, (i) each and every right, power, privilege or duty, and each obligation, expressed or intended by this Agreement or any of the other Loan Documents to be exercised by or vested in or conveyed to Collateral Agent, or to which Collateral Agent is subject, with respect to such Collateral shall be exercisable by and vest in such Supplemental Collateral Agent to the extent, and only to the extent, necessary to enable such Supplemental Collateral Agent to exercise such rights, powers and privileges with respect to such Collateral as if such Supplemental Collateral Agent were the Collateral Agent, and to perform such duties with respect to such Collateral, and every covenant and obligation contained in the Loan Documents and necessary to the exercise or performance thereof by and against such Supplemental Collateral Agent shall run to and be enforceable by and against either Collateral Agent or such Supplemental Collateral Agent, and (ii) the provisions of this Section 11 and of subsections 12.2 and 12.3 that refer to Collateral Agent shall inure to the benefit of such Supplemental Collateral Agent and all references therein to Collateral Agent shall be deemed to be references to Collateral Agent and/or such Supplemental Collateral Agent, as the context may require.

Should any instrument in writing from Company or any other Loan Party be required by any Supplemental Collateral Agent so appointed by Collateral Agent for more fully and certainly vesting in and confirming to him or it such rights, powers, privileges and duties, Company shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon request by Collateral Agent. In case any Supplemental Collateral Agent, or a successor thereto, shall die, become incapable of acting, resign or be removed, all the rights, powers, privileges and duties of such Supplemental Collateral Agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Collateral Agent until the appointment of a new Supplemental Collateral Agent.

D. Control. Each Lender and Collateral Agent hereby appoint each other Lender as agent for the purpose of perfecting Administrative Agent’s security interest in assets that, in accordance with any governing legislation, can be perfected by possession or control.

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11.2 Powers and Duties; General Immunity.

A. Powers; Duties Specified. Each Lender irrevocably authorizes Administrative Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Loan Documents as are specifically delegated or granted to Administrative Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Administrative Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and the other Loan Documents together with such powers, rights and remedies as are reasonably incidental thereto. Administrative Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. Administrative Agent shall not have, by reason of this Agreement or any of the other Loan Documents, a fiduciary relationship in respect of any Lender or Company; and nothing in this Agreement or any of the other Loan Documents, expressed or implied, is intended to or shall be so construed as to impose upon Administrative Agent any obligations in respect of this Agreement or any of the other Loan Documents except as expressly set forth herein or therein.

Each Lender irrevocably authorizes Collateral Agent to take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other Loan Documents as are specifically delegated or granted to Collateral Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Collateral Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and the other Loan Documents together with such powers, rights and remedies as are reasonably incidental thereto. Collateral Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees. Collateral Agent shall not have, by reason of this Agreement or any of the other Loan Documents, a fiduciary relationship in respect of any Lender or Company; and nothing in this Agreement or any of the other Loan Documents, expressed or implied, is intended to or shall be so construed as to impose upon Collateral Agent any obligations in respect of this Agreement or any of the other Loan Documents except as expressly set forth herein or therein.

B. No Responsibility for Certain Matters. No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by such Agent to Lenders or by or on behalf of Company to such Agent or any Lender in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of Company or any other Person liable for the payment of any Obligations, nor shall such Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default. Anything contained in this Agreement to the contrary notwithstanding, Administrative Agent shall not have any liability arising from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or the component amounts thereof.

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C. Exculpatory Provisions. No Agent or any of its officers, directors, employees or agents shall be liable to Lenders for any action taken or omitted by such Agent under or in connection with any of the Loan Documents except to the extent caused by such Agent’s gross negligence or willful misconduct. An Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection with this Agreement or any of the other Loan Documents or from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until such Agent shall have received instructions in respect thereof from Requisite Lenders (or such other Lenders as may be required to give such instructions under subsection 12.6) and, upon receipt of such instructions from Requisite Lenders (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Company and its Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no Lender shall have any right of action whatsoever against an Agent as a result of such Agent acting or (where so instructed) refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of Requisite Lenders (or such other Lenders as may be required to give such instructions under subsection 12.6).

D. Agents Entitled to Act as Lender. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, an Agent in its individual capacity as a Lender hereunder. With respect to its participation in the Loans and the Letters of Credit, an Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder, and the term “Lender” or “Lenders” or any similar term shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. An Agent and its Affiliates may accept deposits from, lend money to, acquire equity interests in and generally engage in any kind of commercial banking, investment banking, trust, financial advisory or other business with Company or any of its Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company for services in connection with this Agreement and otherwise without having to account for the same to Lenders.

11.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.

Each Lender agrees that it has made its own independent investigation of the financial condition and affairs of Company and its Subsidiaries in connection with the making of the Loans and the issuance of Letters of Credit hereunder and that it has made and shall continue to make its own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making

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of the Loans or issuance of any Letter of Credit or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.

11.4 Right to Indemnity.

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent and its officers, directors, employees, agents, attorneys, professional advisors and Affiliates to the extent that any such Person shall not have been reimbursed by Company, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements on a solicitor and his own client basis, and fees and disbursements of any financial advisor engaged by Agents) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Agent or and other such Persons in exercising the powers, rights and remedies of an Agent or performing duties of an Agent hereunder or under the other Loan Documents or otherwise in its capacity as Agent in any way relating to or arising out of this Agreement or the other Loan Documents, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of an Agent resulting solely from such Agent’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. If any indemnity furnished to an Agent or any other such Person for any purpose shall, in the opinion of such Agent, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished.

11.5 Successor Agents and Swing Line Lender.

A. Successor Agents. Any Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to Collateral Agent, Lenders and Company. Upon any such notice of resignation, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Administrative Agent, which must be a Lender, subject (if no Event of Default exists) to the approval of Company. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent. Whether or not a successor is appointed, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement upon its resignation becoming effective in accordance with its notice of resignation. After any retiring Administrative Agent’s resignation hereunder as an Administrative Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was an Administrative Agent under this Agreement.

Any Collateral Agent may resign at any time by giving 30 days’ prior written notice thereof to Administrative Agent, Lenders and Company. Upon any such notice of resignation, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Collateral Agent, subject (if no Event of Default exists) to the approval of Company. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the

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rights, powers, privileges and duties of the retiring Collateral Agent. Whether or not a successor is appointed, the retiring Collateral Agent shall be discharged from its duties and obligations under this Agreement upon its resignation becoming effective in accordance with its notice of resignation. After any retiring Collateral Agent’s resignation hereunder as the Collateral Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement.

B. Successor Swing Line Lender. Any resignation of Administrative Agent pursuant to subsection 11.5A shall also constitute the resignation of it or its successor as Swing Line Lender, and any successor Administrative Agent appointed pursuant to subsection 11.5A shall, upon its acceptance of such appointment, become the successor Swing Line Lender for all purposes hereunder. In such event Company shall prepay any outstanding Swing Line Loans made by the retiring or removed Administrative Agent in its capacity as Swing Line Lender.

C. Successor Fronting Bank. The Fronting Bank may resign at any time by giving 30 days’ prior written notice thereof to Lenders and Company. Upon any such notice of resignation, Requisite Lenders shall have the right, upon five Business Days’ notice to Company, to appoint a successor Fronting Bank, which must be a Lender, subject (if no Event of Default exists) to the approval of Company. Upon the acceptance of any appointment as Fronting Bank hereunder by a successor Fronting Bank, that successor Fronting Bank shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Fronting Bank and the retiring Fronting Bank shall be discharged from its duties and obligations under this Agreement. Whether or not a successor is appointed, the retiring Fronting Bank shall be discharged from its duties and obligations under this Agreement upon its resignation becoming effective in accordance with its notice of resignation. After any retiring Fronting Bank’s resignation hereunder as Fronting Bank, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was a Fronting Bank under this Agreement.

11.6 Collateral Documents and Guarantees.

A. Each Lender hereby further authorizes Administrative Agent, on behalf of and for the benefit of Lenders, to be the agent for and representative of Lenders under any Loan Document (other than this Agreement and the Collateral Documents) and each Lender agrees to be bound by the terms of each such Loan Document, provided that Administrative Agent shall not enter into or consent to any material amendment, modification, termination or waiver of any provision contained in any such Loan Document, except in compliance with subsection 12.6, and provided further that, without further written consent or authorization from Lenders, Administrative Agent may execute any documents or instruments necessary to release any Subsidiary Guarantor from the Subsidiary Guarantee if all of the Capital Stock of such Subsidiary Guarantor is sold to any Person (other than an Affiliate of Company) pursuant to a sale or other disposition permitted hereunder or to which Requisite Lenders have otherwise consented so long as, in the case of a sale of such item of Collateral or Capital Stock referred to above, the requirements of subsections 12.14 and 12.15 are satisfied. In addition, each Lender (and by accepting the benefits thereof, each Swap Lender) hereby further authorizes Administrative Agent to execute the St. Paul Priority Agreement as agent for and representative of the Lenders, and each Lender (and by

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accepting the benefits thereof, each Swap Lender) agrees to be bound thereby. Anything contained in any of the Loan Documents to the contrary notwithstanding, Company, Administrative Agent and each Lender hereby agree that no Lender shall have any right individually to enforce any Guarantee, it being understood and agreed that all powers, rights and remedies under the Guarantees may be exercised solely by Administrative Agent for the benefit of Lenders in accordance with the terms thereof.

B. Each Lender (and by accepting the benefits thereof, each Swap Lender) hereby further authorizes Collateral Agent, on behalf of and for the benefit of Lenders, without further authorization or consent of the Lenders, to enter into the Intercreditor Agreement, the St. Paul Priority Agreement and each Collateral Document as secured party, and each Lender agrees to be bound by the terms of each such Collateral Document, provided that Collateral Agent shall not:

(i) enter into or consent to any material amendment, modification, termination or waiver of any provision contained in any such Collateral Document or the Intercreditor Agreement, or

(ii) release any Collateral,

except in compliance with subsection 12.6, and provided further that, without further written consent or authorization from Lenders, Collateral Agent may execute any documents or instruments necessary to:

(a) release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted by this Agreement or to which Requisite Lenders have otherwise consented, or

(b) subordinate the Liens of Collateral Agent, on behalf of Lenders, Swap Lenders and Agents, to any Liens permitted by subsections 9.2A(i), (ii) and (iv);

so long as, in the case of a sale of such item of Collateral referred to in subclause (a), the requirements of subsections 12.14 and 12.15 are satisfied. Anything contained in any of the Collateral Documents to the contrary notwithstanding, Company, Collateral Agent and each Lender hereby agree that:

(1) no Lender shall have any right individually to realize upon any of the Collateral under any Collateral Document, it being understood and agreed that all powers, rights and remedies under the Collateral Documents may be exercised solely by Collateral Agent for the benefit of Lenders in accordance with the terms thereof, and

(2) in the event of a foreclosure by Collateral Agent on any of the Collateral pursuant to a public or private sale, Collateral Agent, Administrative Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and Administrative Agent, as agent for and representative of Lenders (but not any Lender or Lenders in its or their

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respective individual capacities unless Requisite Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Collateral Agent at such sale.

11.7 Duties of Other Agents.

To the extent that any Lender is identified in this Agreement as a “co-agent,” documentation agent or syndication agent, such Lender shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.

11.8 Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to Holdings, Company or any of the Subsidiaries of Holdings or Company, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on Company) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Loans or Letters of Credit and any other Obligations that are owing and unpaid and to file such other papers or documents as may be necessary or advisable in order to have the claims of Lenders and Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and Agents and their agents and counsel and all other amounts due Lenders and Agents under subsections 2.3 and 12.2) allowed in such judicial proceeding, and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Agents and their agents and counsel, and any other amounts due Agents under subsections 2.3 and 12.2.

Nothing herein contained shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lenders or

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to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

11.9 Borrowing Base Communication.

If, at any time, Collateral Agent determines that the Borrowing Base is not the amount set forth in the most recent Borrowing Base Certificate delivered by the Company pursuant to Section 8.1(xiv), whether due to the establishment of a Reserve, the ineligibility of accounts receivable, the receipt of an updated NOLV Appraisal or otherwise, Collateral Agent shall notify Administrative Agent of same in writing (with a copy to the Company), which notice shall state the newly calculated Borrowing Base. Administrative Agent, Swing Line Lender and Issuing Lender shall have no liability to the Lenders for Loans made (including Swing Line Loans) or Letters of Credit issued (and Lenders shall be responsible for their Pro Rata shares of such Loans or Letters of Credit pursuant to Sections 2.1A(i), 2.1A(ii)(d), 2.1A(ii)(e) and 4.1C) in good faith based on the Company’s most recent Borrowing Base Certificate unless and until Collateral Agent has delivered such notice.

Section 12. MISCELLANEOUS

12.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit.

A. General. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Lenders (it being understood that Lenders’ rights of assignment are subject to the further provisions of this subsection 12.1). Neither Company’s rights or obligations hereunder nor any interest therein may be assigned or delegated by Company without the prior written consent of all Lenders (and any attempted assignment or transfer by Company without such consent shall be null and void). No sale, assignment or transfer or participation of any Letter of Credit or any participation therein may be made separately from a sale, assignment, transfer or participation of a corresponding interest in the Revolving Loan Commitment and the Revolving Loans of the Revolving Lender effecting such sale, assignment, transfer or participation. Anything contained herein to the contrary notwithstanding, except as provided in subsection 2.1A(ii) and subsection 12.5, the Swing Line Loan Subcommitment and the Swing Line Loans of Swing Line Lender may not be sold, assigned or transferred as described below to any Person other than a successor Administrative Agent and Swing Line Lender to the extent contemplated by subsection 11.5. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Affiliates of each Agent and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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B. Assignments.

(i) Amounts and Terms of Assignments. Any Lender may assign to one or more Eligible Assignees all or any portion of its rights and obligations under this Agreement, provided that:

(a) except (1) in the case of an assignment of the entire remaining amount of the assigning Lender’s rights and obligations under this Agreement or (2) in the case of an assignment to a Lender or an Affiliate of a Lender or Agent or an Approved Fund of a Lender, the aggregate amount of the Revolving Loan Exposure of the assigning Lender and the assignee subject to each such assignment shall not be less than Cdn. $1,000,000 in the case of any assignment of a Revolving Loan or Revolving Loan Commitment, unless each of Administrative Agent and, so long as no Event of Default has occurred and is continuing, Company otherwise consents (each such consent not to be unreasonably withheld or delayed),

(b) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Revolving Loan Commitment assigned,

(c) the assignor and the assignee under each assignment shall execute and deliver to Administrative Agent an Assignment Agreement, together with a processing and recordation fee of $3,500 (unless the assignee is an Affiliate or an Approved Fund of the assignor, in which case no fee shall be required), and the Eligible Assignee, if it shall not be a Lender, shall deliver to Administrative Agent information reasonably requested by Administrative Agent), and

(d) except in the case of an assignment to another Lender, an Affiliate of a Lender or Agent or an Approved Fund of a Lender, Agents, if no Event of Default has occurred and is continuing, Company, shall have consented thereto (each of which consents shall not be unreasonably withheld and in the case of Collateral Agent such consent may only be withheld if in Collateral Agent’s reasonable judgment such assignment would likely result in additional liability, cost or administrative burden for the Collateral Agent), and shall evidence such consent in writing on request by any party to the Assignment Agreement. Collateral Agent’s consent to any assignment shall be deemed given 5 Business Days after written request therefor by Administrative Agent or Company if, by such time Collateral Agent has not consented (or denied consent).

Upon such execution, delivery and consent, from and after the effective date specified in such Assignment Agreement, (y) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (z) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive the termination of this Agreement under

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subsection 12.9B) and be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto, provided that, anything contained in any of the Loan Documents to the contrary notwithstanding, if such Lender is an Issuing Lender such Lender shall continue to have all rights and obligations of an Issuing Lender until the cancellation or expiration of any Letters of Credit issued by it and the reimbursement of any amounts drawn thereunder). Other than as provided in subsection 2.1A(ii) and subsection 12.5, any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 12.1B shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection 12.1C.

(ii) Acceptance by Administrative Agent; Recordation in Register. Upon its receipt of an Assignment Agreement executed by an assigning Lender and an assignee representing that it is an Eligible Assignee, together with the processing and recordation fee referred to in subsection 12.1B(i), Administrative Agent shall, if Administrative Agent and Company have consented to the assignment evidenced thereby (in each case to the extent such consent is required pursuant to subsection 12.1B(i)), (a) accept such Assignment Agreement by executing a counterpart thereof as provided therein (which acceptance shall evidence any required consent of Administrative Agent to such assignment), (b) record the information contained therein in the Register, and (c) give prompt notice thereof to Company. Administrative Agent shall maintain a copy of each Assignment Agreement delivered to and accepted by it as provided in this subsection 12.1B(ii).

(iii) Deemed Consent by Company. If the consent of Company to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in subsection 12.1B(i), but excluding any consent of Company required for the sale of a participation set forth in subsection 12.1C), Company shall be deemed to have given its consent five Business Days after the date notice thereof has been delivered by the assigning Lender (through Administrative Agent) unless such consent is expressly refused by Company on or prior to such fifth Business Day.

C. Participations. Any Lender may, without the consent of, or notice to, Company or Administrative Agent, sell participations to one or more Persons (other than a natural Person or Company or any of its Affiliates) in all or a portion of such Lender’s rights and/or obligations under this Agreement, provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Company, Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such agreement or instrument may provide that such Lender will not,

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without the consent of the Participant, agree to any amendment, modification or waiver directly affecting (a) the extension of the regularly scheduled maturity of any portion of the principal amount of or interest on any Loan allocated to such participation (other than interest imposed by subsection 2.2D for a period not to exceed 60 days) or (b) a reduction of the principal amount of or the rate of interest payable on any Loan allocated to such participation (other than interest imposed by subsection 2.2D for a period not to exceed 60 days). Subject to the further provisions of this subsection 12.1C, Company agrees that each Participant shall be entitled to the benefits of subsection 2.6 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection 12.1B. To the extent permitted by Applicable Law, each Participant also shall be entitled to the benefits of subsection 12.4 as though it were a Lender, provided such Participant agrees to be subject to subsection 12.5 and 12.20 as though it were a Lender. A Participant shall not be entitled to receive any greater payment under subsection 2.6 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with Company’s prior written consent.

Where payments to a Participant are subject to withholding tax pursuant to Part XIII of the Income Tax Act, a Participant shall not be entitled to the benefits of subsection 2.6 unless Company is notified of the participation sold to such Participant and Company agrees to comply with subsection 2.6 as though such Participant were a Lender.

D. Pledges and Assignments. Any Lender may at any time pledge or assign a security interest in all or any portion of its Loans, and the other Obligations owed to such Lender, to any banking or finance Governmental Authority to secure obligations of such Lender, including any pledge or assignment to secure obligations to any Federal Reserve Bank, provided that (i) no Lender shall be relieved of any of its obligations hereunder as a result of any such assignment or pledge and (ii) in no event shall any assignee or pledgee be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.

E. Information. Each Lender may furnish any information concerning Company and its Subsidiaries in the possession of that Lender from time to time to assignees and participants (including prospective assignees and participants), subject to subsection 12.20.

F. Agreements of Lenders. Each Lender listed on the signature pages hereof hereby agrees, and each Lender that becomes a party hereto pursuant to an Assignment Agreement shall be deemed to agree, (i) that it is an Eligible Assignee described in clause (ii) of the definition thereof; (ii) that it has experience and expertise in the making of or purchasing loans such as the Loans; and (iii) that it will make or purchase Loans for its own account in the ordinary course of its business and without a view to distribution of such Loans within the meaning of the Securities Act or the Exchange Act or other securities laws (it being understood that, subject to the provisions of this subsection 12.1, the disposition of such Loans or any interests therein shall at all times remain within its exclusive control).

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12.2 Expenses.

Whether or not the transactions contemplated hereby shall be consummated, Company agrees to pay promptly:

(i) all reasonable costs and expenses of the Agents incurred in connection with the negotiation, preparation and execution of the Loan Documents and any consents, amendments, waivers or other modifications thereto;

(ii) all costs and expenses of furnishing all opinions by counsel for Company (including any opinions requested by Agents or Lenders as to any legal matters arising hereunder) and of Company’s performance of and compliance with all agreements and conditions on its part to be performed or complied with under this Agreement and the other Loan Documents including with respect to confirming compliance with environmental, insurance and solvency requirements;

(iii) all reasonable fees, expenses and disbursements of counsel to Administrative Agent on a solicitor and his own client basis (including allocated costs of internal counsel) in connection with the negotiation, preparation, execution and administration of the Loan Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by Company;

(iv) all costs and expenses of creating and perfecting Liens in favor of Collateral Agent on behalf of Lenders, Swap Lenders and Agents pursuant to any Collateral Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees and reasonable fees, expenses and disbursements of counsel to Administrative Agent and Collateral Agent and of counsel providing any opinions that Administrative Agent, Collateral Agent or Requisite Lenders may request in respect of the Collateral Documents or the Liens created pursuant thereto;

(v) all costs and expenses (including the reasonable fees, expenses and disbursements of any auditors, accountants or appraisers and any environmental, engineering or other consultants, advisors and agents employed or retained by Administrative Agent, Collateral Agent or its counsel) of obtaining and reviewing any appraisals or any environmental audits or reports provided for under this Agreement, provided that Administrative Agent and Collateral Agent shall advise Company of Lenders’ intent to obtain such information, although failure to do so will not affect Company’s obligations under this subsection 12.2;

(vi) all costs and expenses incurred by Collateral Agent in connection with the custody or preservation of any of the Collateral;

(vii) all other costs and expenses incurred by Agents in connection with the syndication of the Revolving Loan Commitments;

(viii) all costs and expenses, including reasonable legal fees on a solicitor and his own client basis (including allocated costs of internal counsel) and fees, costs and expenses of accountants, advisors and consultants, incurred by Administrative Agent and

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Collateral Agent and its counsel relating to efforts to (a) evaluate or assess any Loan Party, its business or financial condition and (b) protect, evaluate, assess or dispose of any of the Collateral; and

(ix) all costs and expenses, including reasonable attorneys’ fees (including allocated costs of internal counsel), fees, costs and expenses of accountants, advisors and consultants and costs of settlement, incurred by Administrative Agent, Collateral Agent and Lenders in enforcing any Obligations of or in collecting any payments due from any Loan Party hereunder or under the other Loan Documents (including in connection with the sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Loan Documents) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings.

12.3 Indemnity.

In addition to the payment of expenses pursuant to subsection 12.2, whether or not the transactions contemplated hereby shall be consummated, Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders (including Issuing Lenders), and the officers, directors, employees, agents and Affiliates of Agents and Lenders (collectively called the “Indemnitees”), from and against any and all Indemnified Liabilities (as hereinafter defined), provided that (i) an Indemnitee shall always be entitled to select its own counsel, and (ii) Company shall not have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise solely from the gross negligence or willful misconduct of that Indemnitee as determined by a final judgment of a court of competent jurisdiction.

As used herein, “Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, actions, judgments, suits, claims (including Environmental Claims), costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials or Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of:

(i) this Agreement, the other Loan Documents or the Related Documents or the transactions contemplated hereby or thereby (including Lenders’ agreement to make the Loans hereunder or the use or intended use of the proceeds thereof or the issuance of

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Letters of Credit hereunder or the use or intended use of any thereof, the failure of an Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority or any enforcement of any of the Loan Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guarantees)), and further including:

(a) any cost or expense incurred by reason of the liquidation or re-deployment in whole or in part of deposits or other funds required by any Lender to fund any Bankers’ Acceptance or to fund or maintain any Loan as a result of Company’s failure to complete a borrowing or to make any payment, repayment or prepayment on the date required hereunder or specified by it in any notice given hereunder;

(b) subject to permitted or deemed Rollovers and Conversions, Company’s failure to provide for the payment to Administrative Agent for the account of the Lenders of the full principal amount of each Bankers’ Acceptance on its maturity date;

(c) Company’s failure to pay any other amount, including any interest or fee, due hereunder on its due date after the expiration of any applicable grace or notice periods (subject, however, to the interest obligations of Company hereunder for overdue amounts);

(d) the prepayment of any outstanding Bankers’ Acceptance otherwise than on the last day of its BA Interest Period;

(e) Company’s failure to give any notice required to be given by it to Administrative Agent or the Lenders hereunder;

(f) the failure of Company to make any other payment due hereunder;

(g) any inaccuracy or incompleteness of Company’s representations and warranties contained herein;

(h) any failure of Company to observe or fulfill its covenants contained herein;

(i) any failure of Company to observe or fulfill any other Obligation not specifically referred to above; or

(j) the occurrence of any Default or Event of Default in respect of Company; or

(ii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Company or any of its Subsidiaries.

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To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this subsection 12.3 may be unenforceable in whole or in part because they are violative of any law or public policy, Company shall contribute the maximum portion that it is permitted to pay and satisfy under Applicable Law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

12.4 Set-Off; Security Interest in Deposit Accounts.

In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, during the existence of any Event of Default (and with the approval of the Requisite Lenders prior to any Loans becoming or being declared to be due under Section 10), each Lender is hereby authorized by Company at any time or from time to time, without notice to Company or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, time or demand, provisional or final, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by that Lender or any Affiliate of that Lender to or for the credit or the account of Company and each other Loan Party against and on account of the Obligations of Company or any other Loan Party to that Lender (or any Affiliate of that Lender) or to any other Lender (or any Affiliate of any other Lender) under this Agreement, the Letters of Credit and participations therein and the other Loan Documents, including all claims of any nature or description arising out of or connected with this Agreement, the Letters of Credit and participations therein or any other Loan Document, irrespective of whether or not (i) that Lender shall have made any demand hereunder or (ii) the principal of or the interest on the Loans or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have become due and payable pursuant to Section 10 and although said obligations and liabilities, or any of them, may be contingent or unmatured. Company hereby further grants to Collateral Agent and each Lender a security interest in all deposits and accounts maintained with Administrative Agent, Collateral Agent or such Lender as security for the Obligations.

12.5 Ratable Sharing.

Lenders hereby agree among themselves that if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms of this Agreement), by realization upon security, through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Loan Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under a Bankruptcy Law, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to that Lender hereunder or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to such Lender) that is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (i) notify Administrative Agent and each other Lender of the receipt of such payment and (ii) apply a portion of such payment to purchase assignments (which it shall be deemed to have purchased from each seller of an assignment simultaneously upon the receipt by such seller of its portion of such payment)

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of the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them, provided that if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy, receivership or reorganization of a Loan Party or otherwise, those purchases shall be rescinded and the purchase prices paid for such assignments shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Company expressly consents to the foregoing arrangement and agrees that any purchaser of an assignment so purchased may exercise any and all rights of a Lender as to such assignment as fully as if that Lender had complied with the provisions of subsection 12.1B with respect to such assignment. In order to further evidence such assignment (and without prejudice to the effectiveness of the assignment provisions set forth above), each purchasing Lender and each selling Lender agree to enter into an assignment agreement at the request of a selling Lender or a purchasing Lender, as the case may be, in form and substance reasonably satisfactory to each such Lender.

12.6 Amendments and Waivers.

No amendment, modification, termination or waiver of any provision of this Agreement, and no consent to any departure by Company therefrom, shall in any event be effective without the written concurrence of Requisite Lenders, provided that no such amendment, modification, termination, waiver or consent shall:

(i) without the additional consent of each Lender with Obligations directly affected:

(a) reduce the principal amount payable on account of any Loan,

(b) increase the maximum aggregate amount of Letters of Credit available,

(c) postpone any installment date or the final maturity date of any Loan,

(d) postpone the date on which any interest or any fees are payable, other than interest imposed by subsection 2.2D for a period not to exceed 60 days,

(e) decrease the interest rate or stamping fee borne by any Loan or the amount of any fees payable hereunder, other than interest imposed by subsection 2.2D for a period not to exceed 60 days,

(f) reduce the amount or postpone the due date of any amount payable in respect of any Letter of Credit,

(g) extend the expiration date of any Letter of Credit beyond the Revolving Loan Commitment Termination Date,

(h) change in any manner the obligations of Revolving Lenders relating to the purchase of participations in Letters of Credit, or

(i) increase such Lender’s Revolving Loan Commitment;

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(ii) without the consent of all Lenders:

(a) change in any manner the definition of “Pro Rata Share” or the definition of “Requisite Lenders” (except for any changes resulting solely from an increase in Revolving Loan Commitments approved by Requisite Lenders),

(b) change in any manner any provision of this Agreement that, by its terms, expressly requires the approval or concurrence of all Lenders,

(c) increase the maximum duration of BA Interest Periods permitted hereunder,

(d) release any Lien granted in favor of Collateral Agent with respect to the Collateral, or release Holdings from its obligations under the Holdings Guarantee, or release any of the Subsidiary Guarantors from their obligations under the Subsidiary Guarantee, in each case other than in accordance with the terms of this Agreement and the other Loan Documents, including subsections 12.14 and 12.15, or

(e) change in any manner or waive the provisions contained in subsection 10.1 or this subsection 12.6.

In addition:

(1) no amendment, modification, termination or waiver of any provision of subsection 2.1A(ii) or of any other provision of this Agreement relating to the Swing Line Loan Subcommitment or the Swing Line Loans shall be effective without the written concurrence of Swing Line Lender,

(2) no amendment, modification, termination or waiver of any provision of Section 4 shall be effective without the written concurrence of Fronting Bank (if any) and, with respect to Letters of Credit, without the written concurrence of each Issuing Lender that has issued an outstanding Letter of Credit or has not been reimbursed for a payment under a Letter of Credit,

(3) no amendment, modification, termination or waiver of any provision of Section 11 or of any other provision of this Agreement which, by its terms, expressly requires the approval or concurrence of Administrative Agent or Collateral Agent shall be effective without the written concurrence of Administrative Agent or Collateral Agent, as applicable; and

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(4) no amendment, modification, termination or waiver of Section 2.4F affecting the rights thereunder of any Swap Lender shall be effective without the written concurrence of such Swap Lender.

Either Administrative Agent or Collateral Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of that Lender. If Administrative Agent or Collateral Agent expressly executes any such amendment, modification, waiver or consent on behalf of any Lender or Lenders, Company may rely on such execution as conclusive evidence that the written concurrence of the Lender or Lenders on whose behalf such Agent has executed has been obtained.

Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Company in any case shall entitle Company to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this subsection 12.6 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by Company, on Company and each Subsidiary Guarantor.

12.7 Independence of Covenants.

All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if such action is taken or condition exists.

12.8 Notices; Effectiveness of Signatures.

Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, or sent by telefacsimile or Canadian mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telefacsimile in complete and legible form, or three Business Days after depositing it in the Canadian mail with postage prepaid and properly addressed, provided that notices to Administrative Agent, Collateral Agent, Swing Line Lender and any Issuing Lender shall not be effective until received. For the purposes hereof, the address of each party hereto shall be as set forth under such party’s name on the signature pages hereof or (i) as to Company, Collateral Agent and Administrative Agent, such other address as shall be designated by such Person in a written notice delivered to the other parties hereto and (ii) as to each other party, such other address as shall be designated by such party in a written notice delivered to Administrative Agent, Collateral Agent and Company. Electronic mail and Internet and intranet websites may be used to distribute routine communications, such as financial statements and other information, provided that no signature with respect to any notice, request, agreement, waiver, amendment or other document or any notice that is intended to have binding effect may be sent by electronic mail.

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Loan Documents and notices under the Loan Documents may be transmitted and/or signed by telefacsimile. The effectiveness of any such documents and signatures shall, subject to Applicable Law, have the same force and effect as an original copy with manual signatures and shall be binding on all Loan Parties, Agents and Lenders. Agents may also require that any such documents and signature be confirmed by a manually-signed copy thereof, provided that the failure to request or deliver any such manually-signed copy shall not affect the effectiveness of any facsimile document or signature.

12.9 Survival of Representations, Warranties and Agreements.

A. Survive Execution. All representations, warranties and agreements made herein shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit hereunder.

B. Survive Termination. Notwithstanding anything in this Agreement or implied by Applicable Law to the contrary, the agreements of Company set forth in subsections 2.6, 12.2, 12.3, 12.18 and 12.19 and the agreements of Lenders set forth in subsections 11.2C, 11.4, 12.5, 12.19 and 12.20 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination of this Agreement.

12.10  Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of an Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Loan Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise available.

12.11  Marshalling; Payments Set Aside.

Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of Company or any other party or against or in payment of any or all of the Obligations. To the extent that Company makes a payment or payments to Administrative Agent or Lenders (or to Administrative Agent for the benefit of Lenders), or Agents or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any similar official in respect of a Loan Party under any Bankruptcy Law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

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12.12  Severability.

In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

12.13  Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.

The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Revolving Loan Commitments of any other Lender hereunder. Nothing contained herein or in any other Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or Lenders and Company, as a partnership, an association, a Joint Venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

To the extent permitted by Applicable Law, Company shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement (including subsection 2.1C hereof), any other Loan Document, any transaction contemplated by the Loan Documents, any Loan or the use of proceeds thereof.

12.14  Release of Subsidiary Guarantee.

Upon the sale or other disposition of all of the Capital Stock of a Subsidiary Guarantor to any Person (other than to an Affiliate of Company, unless such sale or other disposition is permitted under subclause 9.7(i)) permitted by this Agreement, or termination of the existence of a Subsidiary Guarantor in a transaction permitted by subclause 9.7(i), or to which Requisite Lenders have otherwise consented, for which a Loan Party desires to obtain a release of the Subsidiary Guarantor from the Subsidiary Guarantee, such Loan Party shall deliver an Officer’s Certificate:

(i) specifying the Capital Stock being sold or otherwise disposed of in the proposed transaction,

(ii) stating that the Capital Stock subject to such disposition is being sold or otherwise disposed of in compliance with the terms hereof, and

(iii) certifying that no Event of Default or Potential Event of Default exists;

and upon the receipt of such Officer’s Certificate, Administrative Agent shall, at such Loan Party’s expense (so long as Administrative Agent does not have actual knowledge, without

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independent inquiry, that the facts stated in such Officer’s Certificate are not true and correct) execute and deliver a release of the Subsidiary Guarantor from the Subsidiary Guarantee, as may be reasonably requested by such Loan Party.

12.15  Release of Security Interest on Asset Disposition.

Upon the sale or other disposition of any Collateral that is permitted by this Agreement or to which Requisite Lenders have otherwise consented and for which a Loan Party desires to obtain a security interest release, such Loan Party shall deliver an Officer’s Certificate:

(i) specifying the Collateral being sold or otherwise disposed of in the proposed transaction,

(ii) stating that the Collateral subject to such disposition is being sold or otherwise disposed of in compliance with the terms hereof,

(iii) stating whether the sale or other disposition of such item of Collateral constitutes an Asset Sale, and

(iv) certifying that no Event of Default or Potential Event of Default exists.

Upon the receipt of such Officer’s Certificate, Collateral Agent shall, at such Loan Party’s expense (so long as Collateral Agent does not have actual knowledge, without independent inquiry, that the facts stated in such Officer’s Certificate are not true and correct, and if the sale or other disposition of such item of Collateral or Capital Stock constitutes an Asset Sale, Collateral Agent shall have received evidence satisfactory to it in its sole discretion that satisfactory arrangements or undertakings have been made for delivery of the Net Asset Sale Proceeds if and as required by subsection 2.4) execute and deliver such releases of the security interests created by the Collateral Documents in the Collateral which is the subject of such sale, as may be reasonably requested by such Loan Party.

12.16  Applicable Law.

This Agreement and the rights and obligations of the Parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the Province of Alberta, without regard to conflicts of laws principles that would require application of another law.

12.17  Construction of Agreement; Nature of Relationship.

Each of the parties hereto acknowledges that (i) it has been represented by counsel in the negotiation and documentation of the terms of this Agreement, (ii) it has had full and fair opportunity to review and revise the terms of this Agreement, (iii) this Agreement has been drafted jointly by all of the parties hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has any fiduciary relationship with or duty to Company arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent, the other Agents and Lenders, on one hand, and Company, on the

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other hand, in connection herewith or therewith is solely that of debtor and creditor. Accordingly, each of the parties hereto acknowledges and agrees that the terms of this Agreement shall not be construed against or in favor of another party.

12.18  Consent to Jurisdiction and Service of Process.

All judicial proceedings brought against Company arising out of or relating to this Agreement or any other Loan Document, or any obligations thereunder, may be brought in any court of competent jurisdiction in the Province of Alberta. By executing and delivering this Agreement, Company, for itself and in connection with its properties, irrevocably

(i) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts;

(ii) waives any defense of forum non conveniens;

(iii) agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to Company at its address provided in accordance with subsection 12.8;

(iv) agrees that service as provided in clause (iii) above is sufficient to confer personal jurisdiction over Company in any such proceeding in any such court, and otherwise constitutes effective and binding service in every respect; and

(v) agrees that Lenders retain the right to serve process in any other manner permitted by Applicable Law or to bring proceedings against Company in the courts of any other jurisdiction.

12.19  Waiver of Jury Trial.

Each of the Parties to this Agreement hereby agrees to waive its respective rights to a jury trial of any claim or cause of action based upon or arising out of this agreement or any of the other loan documents or any dealings between them relating to the subject matter of this loan transaction or the lender/borrower relationship that is being established. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this agreement, and that each will continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this subsection 12.19 and executed by each of the parties hereto), and this waiver shall apply to any subsequent amendments, renewals,

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supplements or modifications to this Agreement or any of the other Loan Documents or to any other documents or agreements relating to the Loans made or Letters of Credit issued hereunder.

12.20  Confidentiality.

Each Agent and Lender shall hold all non-public information obtained pursuant to the requirements of this Agreement that has been identified in writing as confidential by Company in accordance with such Agent’s or Lender’s customary procedures for handling confidential information of this nature, it being understood and agreed by Company that in any event a Lender may make disclosures:

(i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such information and instructed to keep such information confidential),

(ii) to the extent requested by any Governmental Authority,

(iii) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder,

(iv) to the extent required by Applicable Law or by any subpoena or similar legal process,

(v) to any other party to this Agreement,

(vi) to the trustee under the Senior Second Lien Secured Note Indenture in accordance with the terms of the Intercreditor Agreement,

(vii) subject to an agreement containing provisions substantially the same as those of this subsection 12.20, to any Eligible Assignee of or participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations under this Agreement,

(viii) with the consent of Company,

(ix) to the extent such information (i) becomes publicly available other than as a result of a breach of this subsection 12.20 or (ii) becomes available to any Agent or any Lender on a nonconfidential basis from a source other than Company, or

(x) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about an Agent’s or a Lender’s or their Affiliates’ investment portfolio in connection with ratings issued with respect to such Agent, Lender or Affiliates,

provided that, unless specifically prohibited by Applicable Law or court order, each Agent or Lender, applicable, shall notify Company of any request by any Governmental Authority or

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representative thereof (other than any such request in connection with any examination of the financial condition of such Agent or Lender by such Governmental Authority) for disclosure of any such non-public information prior to disclosure of such information; and provided, further that in no event shall any Agent or Lender be obligated or required to return any materials furnished by Company or any of its Subsidiaries. In addition, any Agent and any Lender may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to Agents and Lenders.

Notwithstanding anything herein to the contrary, information required to be treated as confidential by reason of the foregoing shall not include, and any Agent and each Lender may disclose to any and all Persons, without limitation of any kind, any information with respect to income tax treatment and income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such Agent or such Lender relating to such tax treatment and tax structure.

12.21  Paramountcy; Superseding Effect.

If there is any conflict or inconsistency between any provision of this Agreement and any provision of any other Loan Document, the provisions of this Agreement shall, to the extent necessary to resolve such conflict, govern. The commitment letter by and among BNP Paribas, GE Canada Finance Holding Company and the Company dated as of May 12, 2005 is cancelled and superseded in its entirety by this Agreement upon its effectiveness.

12.22  Counterparts; Effectiveness.

This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto.

[Remainder of page intentionally left blank]

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

COMPANY:
NORTH AMERICAN ENERGY PARTNERS INC.
By:	/s/ Vincent Gallant
Name:	Vincent Gallant
Title:	Vice President, Finance
By:	/s/ Chris Hayman
Name:	Chris Hayman
Title:	Treasurer
Notice Address:
North American Energy Partners Inc.
Zone 3, Acheson Industrial Area
2-53016 Highway 60
Acheson, Alberta T7X 5G7
Facsimile: (780) 960-7103
Attention: Vincent Gallant

BNP PARIBAS (CANADA),
as Administrative Agent and Lender
By:	/s/ James Goodall
Name:	James Goodall
Title:	Managing Director, Leveraged Finance & Real Estate Finance
By:	/s/ Eric Borromeo
Name:	Eric Borromeo
Title:	Vice President, Leveraged Finance
Notice Address:
(Funding, Conversions, Rollovers and other payment related notices)
Ms. Paule Fortin
BNP PARIBAS (Canada)
1981 McGill College Avenue,
Montreal, Quebec H3A 2W8 Canada
Phone: (514) 285-6127
Fax: (514) 285-2944
with a copy to:
Eric Borromeo
Vice-President
BNP PARIBAS (Canada)
77 King Street West, Suite 4100, P.O. Box 31
Royal Trust Tower, T-D Centre,
Toronto, Ontario, M5K 1N8 Canada
Phone: (416) 365-6719
Fax: (416) 947-9995
(All other notices)
Anthony Wilson
Merchant Banking Group
BNP Paribas
One Front Street, 23rd Floor
San Francisco CA, USA 94111
Phone: (415) 772-1526
Fax: (415) 398-4240

with a copy to:

Eric Borromeo

Vice-President

BNP PARIBAS (Canada)

77 King Street West, Suite 4100, P.O. Box 31

Royal Trust Tower, T-D Centre,

Toronto, Ontario, M5K 1N8 Canada

Phone: (416) 365-6719

Fax: (416) 947-9995

GE CANADA FINANCE HOLDING COMPANY, as Collateral Agent and Lender
By:	/s/ Stephen B. Smith
Name:	Stephen B. Smith
Title:	President
Notice Address:
GE Canada Finance Holding Company
100 California Street, 10th Floor
San Francisco, California 94111
Attention:		Daniel Shapiro, Global Sponsor Finance
Facsimile:		(415) 277-7443

EX-10.2

Exhibit 10.2

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (this “Agreement”), dated as of May 19, 2005, is made by and between GE Canada Finance Holding Company, as collateral agent for First Lien Secured Parties (as hereinafter defined) (together with any replacement or successor agent, “First Lien Collateral Agent”), Wells Fargo Bank, N.A., as agent for Second Lien Secured Parties (as hereinafter defined) (together with any replacement or successor agent, “Trustee”) and Computershare Trust Company of Canada, as a sub-collateral agent under the Indenture (as herein after defined) (the “Sub-Collateral Agent”, each of the Trustee, the Sub-Collateral Agent and any other sub-collateral agent appointed pursuant to Section 20(l) hereof, being a “Second Lien Collateral Agent” and collectively, the “Second Lien Collateral Agents”; and together with First Lien Collateral Agent, the “Agents”).

RECITALS:

A. Pursuant to the First Lien Credit Agreement (capitalized terms used but not defined in these recitals shall have the meanings given to such terms in Section 1(a) hereof), First Lien Lenders have agreed to provide to North American Energy Partners Inc., a Canadian corporation (“Company”), a revolving credit facility in the aggregate principal amount of $40,000,000, to be guaranteed by NACG Preferred Corp., a Canadian corporation, and certain subsidiaries of Company which are Subsidiary Guarantors, and, in connection therewith, each Debtor has granted or will grant to First Lien Collateral Agent, for the benefit of First Lien Lenders, Liens on the Collateral.

B. Pursuant to the First Lien Credit Agreement, certain Debtors have entered and may from time to time enter into one or more First Lien Hedge Agreements with First Lien Hedge Agreement Counterparties (such First Lien Hedge Agreement Counterparties, together with First Lien Lenders, the First Lien Administrative Agent and First Lien Collateral Agent, “First Lien Secured Parties”), and in connection therewith, each Debtor has granted or will grant to First Lien Collateral Agent, for the benefit of First Lien Hedge Agreement Counterparties, Liens on the Collateral.

C. Debtors have executed and delivered to First Lien Collateral Agent the Company Pledge Agreement, the Subsidiary Pledge Agreements, the Debentures and the Deposit Instruments.

D. Pursuant to the Indenture, Second Lien Holders have purchased and/or hold $60,481,000 aggregate principal amount of Senior Second Lien Secured Notes, guaranteed by the Subsidiary Guarantors and, in connection therewith, the Company and each Subsidiary Guarantor has granted or will grant to the Second Lien Collateral Agents, for the benefit of Second Lien Holders, Liens on the Collateral.

E. Debtors have executed and delivered to Second Lien Collateral Agents the Second Lien Company Pledge Agreement, the Second Lien Subsidiary Pledge Agreements, the Second Lien Debentures and the Second Lien Deposit Instruments.

F. Secured Parties desire to set forth their agreement with respect to, among other things, (i) the appointment, duties and responsibilities of Agents hereunder, (ii) the relative

priorities of the Liens securing the First Lien Claims and the Liens securing the Second Lien Claims, (iii) the exercise of remedies with respect to the Collateral, and (iv) the allocation of any realizations upon the Collateral.

NOW THEREFORE, the parties hereto agree as follows:

1. Interpretation.

(a) Definitions. As used herein (including in the recitals hereof), the following terms shall have the following meanings:

“Agents” has the meaning assigned to that term in the introductory paragraph hereof.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereinafter in effect, or any successor statute.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the Province of Alberta, the Province of Ontario or in New York, New York, or is a day on which banking institutions located in either of such provinces or such state are authorized or required by law or other governmental action to close.

“Claims” means the First Lien Claims and the Second Lien Claims.

“Collateral” means all collateral pledged or secured by the Collateral Documents.

“Collateral Documents” means, collectively, the First Lien Collateral Documents and the Second Lien Collateral Documents.

“Collateral Records” means books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

“Company” has the meaning assigned to that term in the recitals hereof.

“Company Pledge Agreement” means the “Company Pledge Agreement” as defined in the First Lien Credit Agreement.

“Credit Documents” means, collectively, (a) the First Lien Loan Documents and First Lien Hedge Agreements, and (b) the Second Lien Note Documents.

“Debenture” means a “Debenture” as defined in the First Lien Credit Agreement.

“Debtors” means the Company and the Subsidiary Guarantors.

“Deposit Instrument” means any “Deposit Instrument” as defined in the First Lien Credit Agreement.

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“DIP Financing” has the meaning assigned to that term in Section 5(b) hereof.

“Enforcement Action” means and includes, with respect to any Collateral of any Secured Party, (i) exercising any rights or remedies, including repossessing, seizing, selling, leasing, foreclosing upon, or otherwise disposing by such Secured Party or the applicable Agent or its agent (or any receiver appointed by or at the request of such Secured Party) of all or any part of such Collateral, or exercising notification, collection, realization or execution rights with respect to all or any portion thereof, or attempting or agreeing to do any of the foregoing; (ii) exercising voting rights in respect of any Collateral comprising equity interests; (iii) commencing or prosecuting the enforcement with respect to such Collateral of any of the rights and remedies under any of the applicable agreements or documents to which such Secured Party is a party or under applicable laws or equity; (iv) offering, or proposing to apply any of the Second Lien Claims as a credit on account of the purchase price for any Collateral payable by Second Lien Secured Parties at any public or private sale of the Collateral; (v) appropriating, setting off, recouping or applying any part or all of such Collateral in the possession of, or coming into the possession of, such Secured Party or Agent or its agent or bailee, to such Secured Party’s Claim; or (vi) exercising any other rights or remedies of a secured creditor under the PPSA, under any Insolvency Law or under any other comparable law, including appointing or requesting the appointment of a receiver with respect to all or any portion of the Collateral; provided, however, that (i) nothing contained in this Agreement shall be deemed to prohibit the Second Lien Collateral Agents and Second Lien Secured Parties from offering or proposing to apply any of the Second Lien Claims as a credit on account of the purchase price for any Collateral payable by Second Lien Secured Parties at any public or private sale of the Collateral (including any sale in connection with an Insolvency or Liquidation Proceeding) in which the First Lien Claims are Paid in Full, (ii) the exercise by First Lien Collateral Agent of control over any Person’s depository accounts pursuant to any lockbox arrangements or blocked account arrangements, without more, shall not constitute “Enforcement Action”, (iii) the filing of any proof of claim or other notice of claim in any Insolvency or Liquidation Proceeding involving a Debtor shall not be deemed to be an “Enforcement Action”, (iv) voting on a plan of reorganization in an Insolvency or Liquidation Proceeding shall not be deemed to be an “Enforcement Action”, and (v) the taking of actions that are not and could not reasonably be expected to be adverse to the First Lien Secured Parties by any Second Lien Collateral Agent to preserve or protect the Lien of the Second Lien Secured Parties and which are not designed to enforce any right or remedy shall not be deemed to be an Enforcement Action.

“First Lien Administrative Agent” means BNP PARIBAS (Canada) as administrative agent under the First Lien Credit Agreement.

“First Lien Collateral Agent” has the meaning assigned to that term in the introductory paragraph hereof.

“First Lien Claims” means all present and future claims of any one or more of First Lien Secured Parties against Debtors, or any of them, for the payment of money arising out of or related to (i) the extension of credit or other financial accommodations by First Lien Secured Parties to Debtors under the First Lien Credit Agreement (including all “Obligations” as defined therein), (ii) any refinancing, replacement, refunding or restatement of all or any portion thereof, (iii) any First Lien Hedge Agreement, (iv) any of the other First Lien Loan Documents (provided

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that the amount of the First Lien Claims in respect of the First Lien Credit Agreement, the First Lien Loan Documents and any refinancing, replacement, refunding or restatement thereof shall be subject to the limitations on the aggregate principal amount of the obligations outstanding under the First Lien Credit Agreement set forth in clause (2) of the definition of the term “Permitted Indebtedness” as defined in the Indenture as in effect on the date hereof) or (v) any DIP Financing, including, in each case, all claims for principal and interest (including post-petition interest, fees and costs even if such interest, fees and costs are not an allowed claim enforceable against any Debtor in a bankruptcy case under applicable law), reimbursement obligations in respect of Letters of Credit, indemnification obligations and reimbursement of fees, costs and expenses, or otherwise (including payments for early termination of First Lien Hedge Agreements), whether fixed or contingent, matured or unmatured, liquidated or unliquidated.

“First Lien Collateral Documents” means the Debentures, the Deposit Instruments, the Company Pledge Agreement, the Subsidiary Pledge Agreement, and any other document or instrument executed and delivered pursuant to any First Lien Loan Document at any time or otherwise pursuant to which a Lien is granted by a Debtor to secure the First Lien Claims or under which rights or remedies with respect to any such Lien are governed (excluding the Holdings Pledge Agreement except as provided in Section 2(f) hereof).

“First Lien Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and among Company, the financial institutions from time to time party thereto, BNP PARIBAS (Canada), as administrative agent, and GE Canada Finance Holding Company, as collateral agent, as amended, supplemented, modified or restated from time to time, and any replacement agreement or facility existing at any time to refund, refinance, replace or renew (including subsequent or successive refinancings, replacements and renewals whether with the same or different lenders), in whole or in part, amounts outstanding thereunder plus any additional amounts.

“First Lien Hedge Agreements” means the “Swap Agreements” as defined in the Indenture as in effect on the date hereof to the extent they constitute “Secured Swap Obligations” under the First Lien Credit Agreement.

“First Lien Hedge Agreement Counterparty” means any swap counterparty to a First Lien Hedge Agreement, and collectively the “First Lien Hedge Agreement Counterparties”.

“First Lien Lenders” means “Lenders” as defined in the First Lien Credit Agreement.

“First Lien Loan Documents” means the “Loan Documents” as defined in the First Lien Credit Agreement, in each case as amended, supplemented, modified or restated from time to time, and such similar documents entered into in connection with any refinancing, replacement or renewal (including subsequent or successive refinancings, replacements and renewals) of the facilities under the First Lien Credit Agreement.

“First Lien Secured Parties” has the meaning assigned to that term in the recitals hereof.

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“Holdings Pledge Agreement” means “Holdings Pledge Agreement” as defined in the First Lien Credit Agreement.

“Indenture” means that certain Indenture, dated as of May 19, 2005 and pursuant to which the Senior Second Lien Secured Notes are issued, as such indenture may be amended, supplemented, modified or restated from time to time to the extent permitted hereunder and under the First Lien Credit Agreement.

“Insolvency Law” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), Companies Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada), in each case as now or hereinafter in effect and any successor statute thereto, and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, receivership, insolvency, arrangement or similar laws of Canada or other applicable jurisdictions from time to time that have become applicable in connection with the insolvency or restructuring of any Debtor.

“Insolvency or Liquidation Proceeding” means:

(i) any dissolution, winding-up, total or partial liquidation, adjustment or readjustment of debt, reorganization, compromise, arrangement with creditors, plan of arrangement, proposal or similar proceedings under any Insolvency Law of or with respect to any Debtor or its property or liabilities, in each case under any Insolvency Law;

(ii) any dissolution, winding-up, total or partial liquidation, adjustment or readjustment of debt, reorganization, compromise, arrangement with creditors, plan of arrangement or similar proceedings under the arrangement provisions of any applicable corporate law (in any case which involves the alteration, amendment, conversion, compromise, satisfaction or discharge of obligations of any or all creditors) of or with respect to any Debtor or its property or liabilities (but which, for certainty, shall exclude any dissolution, winding-up, liquidation, consolidation, merger or amalgamation of a solvent Debtor into another solvent Debtor permitted by the First Lien Credit Agreement as in effect on the date hereof);

(iii) any bankruptcy, insolvency, receivership, petition or assignment in bankruptcy, or assignment for the benefit of creditors under any Insolvency Laws of or with respect to any Debtor;

(iv) any marshalling of property and liabilities of any Debtor under any Insolvency Law; or

(v) any proceedings in relation to any of the foregoing,

whether any of the foregoing is voluntary or involuntary, partial or complete, and includes any such proceedings initiated or consented to by any Debtor.

“Letters of Credit” means a commercial or standby letter of credit issued pursuant to any First Lien Loan Document.

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“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

“PPSA” means the Personal Property Security Act (Alberta) or any similar or equivalent legislation in effect in any applicable jurisdiction.

“Paid in Full”, “Pay in Full” or “Payment in Full” means the irrevocable termination of all commitments to extend credit that would constitute First Lien Claims, the payment in full in cash of all First Lien Claims and the discharge thereof in accordance with the First Lien Loan Documents and the First Lien Hedge Agreements (except undrawn letters of credit and Unasserted Obligations), including principal, interest, fees, costs (including post-petition interest, fees and costs even if such interest, fees and costs are not an allowed claim enforceable against any Debtor in a bankruptcy case under applicable law) and premium (if any), and the discharge or cash collateralization (by first priority liens on such cash collateral) of all Letters of Credit outstanding under any First Lien Loan Documents in an amount equal to 105% of the greatest amount for which such Letters of Credit may be drawn.

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited or unlimited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments (whether federal, state, provincial or local, domestic or foreign, and including political subdivisions thereof) and agencies or other administrative or regulatory bodies thereof.

“Proceeds” has the meaning given to such term in the PPSA.

“receiver” means a receiver or receiver and manager and includes any liquidator or similar official lawfully appointed with respect to all or a portion of the Collateral.

“Recovery” has the meaning assigned to that term in Section 17 hereof.

“Second Lien Claims” means all present and future claims of any one or more of Second Lien Secured Parties against Debtors, or any of them, for the payment of money arising out of or related to the Senior Second Lien Secured Notes or other financial accommodations by Second Lien Secured Parties to Debtors under the Indenture, any refinancing, replacement refunding or restatement of all or any portion thereof, or any of the other Second Lien Note Documents, including all claims for principal and interest (including post-petition interest, fees and costs even if such interest, fees and costs are not an allowed claim enforceable against any Debtor in a bankruptcy case under applicable law), indemnification obligations and reimbursement of fees, costs and expenses, or otherwise, whether fixed or contingent, matured or unmatured, liquidated or unliquidated.

“Second Lien Collateral Agent” has the meaning assigned to that term in the introductory paragraph hereof.

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“Second Lien Collateral Documents” means the Second Lien Debentures, the Second Lien Deposit Instruments, the Second Lien Company Pledge Agreement, the Second Lien Subsidiary Pledge Agreement and any other document or instrument executed and delivered pursuant to any Second Lien Note Document at any time or otherwise pursuant to which a Lien is granted by a Debtor to secure the Second Lien Claims or under which rights or remedies with respect to any such Lien are governed.

“Second Lien Company Pledge Agreement” means “Pledge Agreement” as defined in the Indenture granted by the Company.

“Second Lien Debentures” means “Debentures” as defined in the Indenture.

“Second Lien Deposit Instruments” means “Deposit Instruments” as defined in the Indenture.

“Second Lien Holders” means “Holders” as defined in the Indenture.

“Second Lien Note Documents” means the Senior Second Lien Secured Notes, the Indenture, the Second Lien Collateral Documents and the “Guarantees” as such term is defined in the Indenture, as such agreements and documents may be amended, supplemented, modified or restated from time to time to the extent permitted hereunder and under the First Lien Credit Agreement.

“Second Lien Secured Parties” means the Second Lien Holders and the Second Lien Collateral Agents.

“Second Lien Subsidiary Pledge Agreements” means “Pledge Agreements” as defined in the Indenture granted by the Subsidiary Guarantors.

“Secured Parties” means, collectively, the First Lien Secured Parties and the Second Lien Secured Parties.

“Senior Second Lien Secured Notes” means the U.S.$60,481,000 in aggregate principal amount of 9% Senior Secured Notes due 2010 of Company issued pursuant to the Indenture, any Additional Notes issued pursuant to the Indenture and any exchange notes containing substantially identical terms issued as contemplated in the Indenture (except that such exchange notes will not contain terms with respect to transfer restrictions or the accrual of liquidated damages).

“Standstill Period” has the meaning set forth in Section 4(e) hereof.

“St. Paul Priority Agreement” means that certain Priority Agreement dated May 19, 2005 among St. Paul Guarantee Insurance Company, NACG Holdings Inc. and is subsidiaries, BNP PARIBAS (Canada), GE Canada Finance Holding Company, Computershare Trust Company of Canada and Wells Fargo Bank, NA.

“Sub-Collateral Agent” has the meaning assigned to that term in the introductory paragraph hereof.

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“Subsidiary Guarantor” means any “Subsidiary Guarantor” as defined in the First Lien Credit Agreement.

“Subsidiary Pledge Agreements” means “Subsidiary Pledge Agreements” as defined in the First Lien Credit Agreement.

“Trustee” has the meaning assigned to that term in the introductory paragraph hereof.

“Unasserted Obligations” means, at any time, obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, any indebtedness and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for payment has been made (or, in the case of obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

(b) Terms Generally. Unless otherwise expressly provided herein, references to Credit Documents and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto to the extent entered into in a manner which is not prohibited by, or in violation of any provision of, the First Lien Loan Documents, the Second Lien Note Documents and this Agreement. All terms used in this Agreement in the singular form shall have comparable meanings when used in the plural form and vice versa. The use of the word “include” or “including” in this Agreement, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The word “property” shall refer to any and all tangible and intangible assets and real and personal properties, including cash, securities, accounts and contract rights.

2. Lien Subordination.

(a) Relative Priorities. All Liens in favor of Second Lien Secured Parties now or hereafter existing with respect to any Collateral, including judgment Liens, shall be subject, subordinate, postponed and junior in all respects and at all times to the Liens in favor of First Lien Secured Parties now or hereafter existing with respect to such Collateral (it being understood that no such Liens of Second Lien Secured Parties shall extend to or cover any property other than the property subject to the first priority Liens of First Lien Secured Parties).

The foregoing allocation of priorities shall govern the relationship of the parties with respect to the Collateral irrespective of (i) the time, order or manner of creation, grant, attachment or perfection of any of such Liens, (ii) the time or order of filing of financing statements or other registrations in respect of the Liens, or any defect or deficiency in such financing statements or registrations or failure to register and perfect the Liens, (iii) the acquisition of purchase money or other Liens, the time of giving or failure to give notice of the acquisition or expected acquisition of purchase money or other Liens, (iv) the rules for

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determining priority (or any other provisions) under the PPSA or any other law or rule governing relative priorities of Secured Parties, or (iv) the fact that any such Liens in favor of any First Lien Secured Party with respect to any Collateral are (A) subordinated to any Lien securing any obligation of any Debtor other than the Second Lien Claims or (B) otherwise subordinated, postponed, voided, avoided, invalidated, released, discharged or lapsed under applicable law or otherwise, or any other circumstances whatsoever.

The Lien subordination provisions in this Section 2 shall be enforceable directly by the First Lien Collateral Agent for the benefit of the First Lien Secured Parties, and the First Lien Secured Parties shall be deemed to have acquired and committed to the First Lien Claims, whether now existing or hereafter arising, in reliance upon the provisions of this Section 2.

For greater certainty, the First Lien Collateral Agent for the benefit of the First Lien Secured Parties, hereby consents to the granting by the Debtors of the Liens under the Second Lien Collateral Documents, and each of the Second Lien Collateral Agents on behalf of the Second Lien Secured Parties hereby consents to the granting by the Debtors of the Liens under the First Lien Collateral Documents.

(b) Prohibition on Contesting Liens. Each Second Lien Collateral Agent and each Second Lien Secured Party agrees that it shall not (and it hereby waives any right to) directly or indirectly take any action at any time (including in any Insolvency or Liquidation Proceeding) to contest or challenge, or support or join in any contest or challenge to, the validity, legality, extent, enforceability, perfection or priority of any of the First Lien Claims, any of the documents or instruments evidencing such First Lien Claims or any of the Liens of First Lien Collateral Agent on any of the Collateral or on the collateral pledged pursuant to the Holdings Pledge Agreement. Except as otherwise contemplated herein, First Lien Collateral Agent and each First Lien Secured Party agrees that it shall not (and it hereby waives any right to) directly or indirectly take any action at any time (including in any Insolvency or Liquidation Proceeding) to contest or challenge, or support or join in any contest or challenge to, the validity, legality, extent, enforceability or perfection of any of the Second Lien Claims, any of the documents or instruments evidencing such Second Lien Claims or any of the Liens of any Second Lien Collateral Agent on any of the Collateral; provided that, nothing in this Agreement shall be construed to prevent or impair the rights of any First Lien Secured Party to enforce this Agreement and the relative priorities of the Liens of the First Lien Secured Parties and the Liens of the Second Lien Secured Parties provided hereunder.

(c) Rights of Set-Off. For the purposes of the allocation of priorities described in Section 2(a), any claim of a right of set-off shall be treated in all respects as a security interest, and no claimed right of set-off shall be asserted by any Second Lien Secured Party to defeat or diminish the rights or priorities of the Lien of any First Lien Secured Party provided for herein.

(d) Other Persons. The priorities set forth herein are solely for the purpose of establishing the relative rights of Secured Parties, and there are no other Persons who are intended to be benefited in any way by this Agreement, except, to the extent expressly set forth herein, the Debtors. Nothing herein affects the relative priority of any other secured party of a Debtor who is not a party to this Agreement.

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(e) Further Assurances. Each Secured Party (at the sole cost and expense of the Debtors, to the extent so provided in the Credit Documents) and each Debtor shall promptly execute and deliver to any Secured Party any and all financing statements or registration documents, subordination or priority agreements and other documents, and shall take all such other actions, as reasonably requested by a Secured Party to the extent necessary to effectuate the terms of this Agreement.

(f) No New Liens. The parties hereto agree that until all First Lien Claims have been Paid in Full, Second Lien Secured Parties shall not at any time (including during any Insolvency or Liquidation Proceeding), without the consent of First Lien Collateral Agent, acquire or hold any Lien on any property of any Debtor securing any Second Lien Claims which property is not also subject to a first priority Lien in favor of the First Lien Secured Parties under the First Lien Collateral Documents. If Second Lien Secured Parties shall (whether or not in breach hereof) acquire or hold any Lien on any property of any Debtor securing any Second Lien Claims which property is not also subject to the first priority Lien in favor of First Lien Secured Parties under the First Lien Loan Documents, then Second Lien Secured Parties shall, notwithstanding anything to the contrary in any other Second Lien Note Document, (i) be deemed to hold and have held such Lien for the benefit of First Lien Collateral Agent, on behalf of itself and the First Lien Secured Parties, as security for the First Lien Claims and shall assign such Lien to First Lien Collateral Agent (in which case a Second Lien Collateral Agent may retain a junior Lien on such property subject to the terms hereof), and any amounts received by or distributed to any of the Second Lien Secured Parties pursuant to or as a result of such Lien shall be distributed in accordance with Section 6, or (ii) if so requested by First Lien Collateral Agent, release such Lien.

Second Lien Secured Parties hereby acknowledge that in addition to the Liens on the Collateral, the First Lien Claims are to be secured by the Holdings Pledge Agreement, and that the Second Lien Secured Parties do not have, and until the First Lien Claims are Paid in Full, shall not take, a Lien on the collateral pledged under the Holdings Pledge Agreement. If the Second Lien Secured Parties take a Lien on the collateral pledged under the Holdings Pledge Agreement in violation of this provision, then without limiting the rights of the First Lien Collateral Agent for breach of this Agreement (including the right to require the Second Lien Secured Parties to release such Lien), (i) the Holdings Pledge Agreement shall constitute a First Lien Collateral Document under this Agreement, (ii) the pledge agreement pursuant to which such Lien was granted to the Second Lien Secured Parties shall constitute a Second Lien Collateral Document under this Agreement, and (iii) the collateral pledged under the Holdings Pledge Agreement and the collateral pledged under such corresponding pledge agreement entered into by the Second Lien Secured Parties shall constitute Collateral under this Agreement.

(g) Notice of Registration. The First Lien Collateral Agent agrees to provide the Trustee and each Second Lien Collateral Agent agrees to provide the First Lien Collateral Agent with prior written notice of its intention to effect any new registrations or amend or otherwise modify any registrations in respect of its Liens under its respective Collateral Documents, including (i) the registration of any of its Collateral Documents in any new jurisdiction, (ii) any new serial number registrations or (iii) any specific registrations against any individual parcels or leases of real property. In all events, the Second Lien Secured Parties agree that the First Lien Collateral Documents and the Liens created thereunder are intended to be (and

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shall be deemed to be) registered prior to the registration of the Second Lien Collateral Documents and the Liens created thereunder.

(h) Second Lien Note Documents. All Second Lien Note Documents shall be submitted to First Lien Collateral Agent for its review to determine compliance with this Agreement, and all of the Second Lien Collateral Documents shall bear the following legend disclosing the existence of this Agreement:

“Notwithstanding anything herein to the contrary, the lien and security interest granted to the [Trustee] pursuant to this Agreement and the exercise of any right or remedy by the [Trustee] hereunder are subject to the provisions of the Intercreditor Agreement, dated as of May [·], 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), between the [·] as collateral agent for the First Lien Secured Parties thereunder and the [Trustee], as agent for the Second Lien Secured Parties thereunder, and such other Persons that may become party thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.”

3. Enforcement Rights.

(a) Exclusive Enforcement. Each Second Lien Secured Party agrees that until all First Lien Claims have been Paid in Full:

(i) it will not take any Enforcement Action (or support or join with any other Person in taking any Enforcement Action) with respect to any Collateral except after the termination of the Standstill Period, and then only in accordance with Section 4(e); and

(ii) subject to the terms of this Agreement, the First Lien Secured Parties may, at their option at any time (including during any Insolvency or Liquidation Proceeding), take any action and exercise any right or remedy they deem appropriate with respect to the Collateral, and nothing in the Second Lien Collateral Documents or any other Second Lien Note Document shall in any way restrict the rights and remedies of the First Lien Secured Parties with respect to the Collateral, and none of the Second Lien Secured Parties (whether as secured or unsecured creditors) shall take any action (or support or join with any other Person taking any action) that would hinder, delay, limit or prohibit the exercise of any rights or remedies by any First Lien Secured Party or any Enforcement Action taken by the First Lien Secured Party.

Each of the Second Lien Secured Parties hereby waives any and all rights it may have as a junior lien creditor or otherwise to object to the manner in which any First Lien Secured Party seeks to enforce or collect the First Lien Claims or the Liens granted in any of the First Lien Collateral Documents, regardless of whether any action or failure to act by or on behalf of the First Lien Secured Parties is adverse to the interest of the Second Lien Secured Parties.

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(b) Cooperation. Each Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, agrees that it shall take such actions (at the sole cost and expense of Debtors, to the extent provided in the Credit Documents) as First Lien Collateral Agent shall reasonably request in connection with the exercise by First Lien Secured Parties of their rights set forth herein.

(c) No Additional Rights for Debtors Hereunder. Except as provided in Section 3(d) hereof, if any First Lien Secured Party or any Second Lien Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Debtor shall be entitled to use such violation as a defense to any action by any First Lien Secured Party or any Second Lien Secured Party, nor to assert such violation as a counterclaim or basis for set-off or recoupment against any First Lien Secured Party or any Second Lien Secured Party.

(d) Actions upon Breach.

(i) If any Second Lien Secured Party, contrary to this Agreement, commences or participates in any Enforcement Action against Company, any other Debtor or the Collateral, Debtors, with the prior written consent of First Lien Collateral Agent, may interpose as a defense to or dilatory plea in respect of such Enforcement Action (as opposed to the underlying Second Lien Claims) the making of this Agreement, and any First Lien Secured Party may intervene and interpose such defense or plea in its or their name or in the name of Company or such other Debtor (and, if in the name of the Company, with no liability to the Company arising from the manner in which such action is pursued).

(ii) Should any Second Lien Secured Party, contrary to this Agreement, in any way take, or attempt to or threaten to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, any First Lien Secured Party (in its or their own name or in the name of Company, and, if in the name of the Company, with no liability to the Company arising from the manner in which such action is pursued) or Company may obtain relief against such Second Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each Second Lien Collateral Agent on behalf of each Second Lien Secured Party that (x) First Lien Secured Parties’ and Company’s damages or irreparable harm from its actions may at that time be difficult to ascertain and may be irreparable, and (y) each Second Lien Secured Party waives any defense that Company and/or First Lien Secured Parties cannot demonstrate damage and/or can be made whole by the awarding of damages.

(e) Judgment Lien. In the event that any Second Lien Secured Party is granted a judgment Lien in respect of Collateral as a result of its enforcement of rights or remedies as a secured or unsecured creditor, such judgment Lien shall be subject to the terms of this Agreement in the same manner as the other Liens in favor of the Second Lien Secured Parties (including with respect to the relative priorities in relation to the Liens in favor of the First Lien Secured Parties and the application of proceeds).

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4. Standstill and Waivers. Each Second Lien Secured Party agrees that until the First Lien Claims are Paid in Full (including during any Insolvency or Liquidation Proceeding):

(a) it will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Collateral pari passu with or senior to, or to give Second Lien Secured Parties any preference or priority relative to, the Liens in favor of First Lien Secured Parties with respect to such Collateral;

(b) it will not oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including the filing of an Insolvency or Liquidation Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Collateral by any First Lien Secured Party or any receiver appointed by or at the request of the First Lien Secured Parties (or any of them) or any other Enforcement Action taken by any such Person;

(c) it has no right to (i) direct either any First Lien Secured Party or any receiver acting on behalf of the First Lien Secured Parties (or any of them) to exercise any right, remedy or power with respect to the Collateral or pursuant to the First Lien Loan Documents or (ii) consent or object to the exercise by any First Lien Secured Party or by any receiver appointed by or at the request of the First Lien Secured Parties (or any of them) of any right, remedy or power with respect to the Collateral or pursuant to the First Lien Loan Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent it may have any such right described in this clause (c), whether as a junior lien creditor or otherwise, it hereby irrevocably waives such right);

(d) it will not institute any suit or other proceeding or assert in any suit, Insolvency or Liquidation Proceeding or other proceeding any claim against any First Lien Secured Party or any receiver appointed by or at the request of the First Lien Secured Parties (or any of them) seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no First Lien Secured Party nor any such receiver shall be liable for, any action taken or omitted to be taken by any First Lien Secured Party or any such receiver with respect to the Collateral or pursuant to the First Lien Loan Documents;

(e) it will not commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of any Collateral, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize or foreclose upon, the Collateral; provided, however, that the Second Lien Collateral Agents may exercise any or all of such rights after the passage of a period of 210 days from the date of delivery of a notice in writing to the First Lien Collateral Agent of its intention to exercise its right to take such actions (the “Standstill Period,”); provided, further, however, in no event shall any Second Lien Collateral Agent or any Second Lien Secured Party exercise any rights or remedies with respect to the Collateral if, notwithstanding the expiration or inapplicability of the Standstill Period, any First Lien Secured Party or any receiver appointed by or at the request of the First Lien Secured Parties (or any of them) shall have commenced the exercise of any of their or its rights or remedies with respect to any material portion of the Collateral and is diligently pursuing such rights or remedies in good faith; or

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(f) except as set forth in clause (e) above, it will not exercise any other rights (other than the right to perfect the Liens in favor of the Second Lien Collateral Agents as contemplated under the Second Lien Note Documents in accordance with the terms of this Agreement) or remedies under the Second Lien Note Documents with respect to any Collateral.

5. Insolvency or Liquidation Proceedings.

(a) Filing of Motions. Until the First Lien Claims are Paid in Full, each Second Lien Secured Party agrees that it shall not, in or in connection with any Insolvency or Liquidation Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Collateral, including with respect to the determination of any Liens or claims held by any First Lien Secured Party (including the validity, extent, perfection, priority and enforceability thereof) or the value of any claims of any First Lien Secured Party under any Insolvency Law, or otherwise, and it shall not support or join with any other Person in any of the foregoing; provided that (i) any Second Lien Collateral Agent may defend against any action in any Insolvency or Liquidation Proceeding to avoid its Lien on the Collateral, (ii) Second Lien Secured Parties shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of Second Lien Secured Parties, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement, and (iii) Second Lien Secured Parties shall be entitled to file any proof of claim and other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Second Lien Claims and the Collateral.

(b) Financing Matters. Until the First Lien Claims are Paid in Full, if any Debtor becomes subject to any Insolvency or Liquidation Proceeding, and if First Lien Collateral Agent or First Lien Secured Parties desire to consent (or not object) to the use of cash collateral on which First Lien Secured Parties or any other creditor has a Lien, or to provide financing to any Debtor under any Insolvency Law, or to consent (or not object) to the provision of such financing supported by security or priority security as may be ordered by a court of competent jurisdiction, to any Debtor by any third party (such financing, whether provided by a First Lien Secured Party or any third party, is referred to herein as a “DIP Financing”), then Second Lien Secured Parties agree that they (i) will be deemed to have consented to, and will raise no objection to, the use of such cash collateral or to such DIP Financing, (ii) will not request or accept any form of relief in connection with the use of such cash collateral or such DIP Financing except as set forth in Section 5(d) hereof, and (iii) to the extent the Liens in favor of First Lien Secured Parties securing the First Lien Claims (other than claims in respect of such DIP Financing) are subordinated to, or pari passu with, the Liens securing such DIP Financing, will subordinate and postpone (and will be deemed hereunder to have subordinated and postponed) the Liens in favor of Second Lien Secured Parties (x) to such DIP Financing and such subordination and postponement will not alter in any manner the terms of this Agreement (and, if the First Lien Secured Parties’ Liens securing the First Lien Claims (other than claims in respect of the DIP Financing) are subordinated to the Liens securing the DIP Financing, the Second Lien Secured Parties’ Liens will be subordinated to the DIP Financing on the same terms and conditions as such First Lien Secured Parties’ Liens securing the First Lien Claims (other than claims in respect of the DIP Financing)), (y) to any additional security or other relief provided to

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First Lien Secured Parties in respect of the First Lien Claims (other than claims in respect of the DIP Financing) and (z) to any priority granted for administrative claims, directors’ charges, professional fees and bankruptcy trustee, proposal trustee, receiver or monitor fees agreed to by First Lien Collateral Agent or First Lien Secured Parties.

(c) Relief From any Stay of Creditor Proceedings. Second Lien Secured Parties agree that until the First Lien Claims are Paid in Full, they will not (i) seek relief from any stay of proceedings in any Insolvency or Liquidation Proceeding or take any action in derogation of such stay, in each case in respect of any Collateral, without the prior written consent of First Lien Collateral Agent (which consent shall not be unreasonably delayed, conditioned or withheld), or (ii) oppose any request by any First Lien Secured Party to seek relief from any stay of proceedings in any Insolvency or Liquidation Proceeding in respect of any Collateral.

(d) Additional Collateral and Relief. Second Lien Secured Parties agree that until the First Lien Claims are Paid in Full, they shall not object to, contest, or support or join any other Person objecting to or contesting, (i) any request by First Lien Collateral Agent or any other First Lien Secured Party for additional or replacement Liens or collateral or other relief in respect of First Lien Claims, (ii) any objection by First Lien Collateral Agent or any other First Lien Secured Party to any motion, relief, action or proceeding based on a claim of a lack of sufficient collateral or protection for the First Lien Claims, or (iii) the payment of interest, fees, expenses or other amounts to First Lien Collateral Agent or any other First Lien Secured Party in respect of, or related to, the First Lien Claims or any receiver appointed by or at the request of the First Lien Secured Parties (or any of them) under any Insolvency Law, or otherwise. Notwithstanding anything contained in this Section and in Section 5(b) hereof, in any Insolvency or Liquidation Proceeding, (x) Second Lien Secured Parties may seek, support, accept or retain additional collateral or Liens only if (A) First Lien Secured Parties are also granted the same additional collateral or Liens as security for the First Lien Claims and (B) the collateral or Liens in favor of the Second Lien Secured Parties is subordinated and postponed to the Liens in favor of First Lien Secured Parties securing the First Lien Claims (including the Liens securing the DIP Financing (if applicable)) on the same basis as the other Liens in favor of Second Lien Secured Parties are so subordinated and postponed to the Liens in favor of the First Lien Secured Parties under this Agreement (subject to Section 5(b)(iii)(z) above), and (y) in the event any Second Lien Secured Party receives additional collateral or Liens, then Second Lien Secured Parties agree that First Lien Collateral Agent shall have a senior Lien and claim on such additional collateral or Liens as security for the First Lien Claims and that any Lien on any additional collateral securing the Second Lien Claims shall be subordinated and postponed to the Liens on such collateral securing the First Lien Claims (including any DIP Financing (if applicable)), and all obligations relating thereto, and to any other Liens granted to First Lien Secured Parties as additional relief in respect of the First Lien Claims, with such subordination to be on the same terms that the other Liens securing the Second Lien Claims are subordinated and postponed to the Liens securing the First Lien Claims under this Agreement.

(e) Asset Dispositions in an Insolvency or Liquidation Proceeding. Neither any Second Lien Collateral Agent nor any other Second Lien Secured Party shall, in an Insolvency or Liquidation Proceeding, oppose any sale or disposition of any assets of any Debtor that is supported by First Lien Secured Parties, and each Second Lien Collateral Agent and each

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other Second Lien Secured Party will be deemed to have consented under any Insolvency Law or in any Insolvency and Liquidation Proceeding to any sale supported by First Lien Secured Parties and to have released its Liens in such assets upon the consummation of such sale.

(f) Separate Grants of Security and Separate Classification. Each Second Lien Collateral Agent and each other Second Lien Secured Party acknowledge and agree that (i) the grants of Liens pursuant to each of the First Lien Collateral Documents and the Second Lien Collateral Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Second Lien Claims are fundamentally different from the First Lien Claims and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of First Lien Secured Parties and Second Lien Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then Second Lien Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against Debtors in respect of the Collateral with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by Second Lien Secured Parties), First Lien Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees and other First Lien Claims before any distribution is made in respect of the Second Lien Claims, with each Second Lien Collateral Agent and each other Second Lien Secured Party hereby acknowledging and agreeing to hold in trust for and turn over to First Lien Collateral Agent for itself and on behalf of the First Lien Secured Parties amounts otherwise received or receivable by it (whether before, during or after any Insolvency or Liquidation Proceeding) to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of Second Lien Secured Parties.

(g) No Waivers of Rights of First Lien Secured Parties. Nothing contained herein shall prohibit or in any way limit First Lien Collateral Agent or any other First Lien Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Second Lien Collateral Agent or any other Second Lien Secured Party, including the seeking by any Second Lien Collateral Agent or any other Second Lien Secured Party of additional or replacement Liens or collateral or other relief or protection (except as expressly permitted under Section 5(d)) or the asserting or exercise by any Second Lien Collateral Agent or any other Second Lien Secured Party of any of its rights and remedies under the Second Lien Note Documents or otherwise.

(h) Other Matters. To the extent that any Second Lien Collateral Agent or any other Second Lien Secured Party has or acquires rights under any Insolvency Law (or any similar provisions under any other comparable law) with respect to any of the Collateral, each Second Lien Collateral Agent and each other Second Lien Secured Party agree not to assert any of such rights without the prior written consent of First Lien Collateral Agent; provided that if requested by First Lien Collateral Agent, the applicable Second Lien Collateral Agent shall timely exercise such rights in the manner requested by First Lien Collateral Agent, including any rights to payments in respect of such rights.

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(i) Effectiveness in Insolvency or Liquidation Proceeding. This Agreement shall be effective before and after the commencement of an Insolvency or Liquidation Proceeding. All references in this Agreement to any Debtor shall include such Debtor as a debtor-in-possession and any receiver or trustee for such Debtor in any Insolvency or Liquidation Proceeding.

(j) Plans of Reorganization. Second Lien Secured Parties shall not, with respect to any secured claims, support or vote in favor of any plan of reorganization (and they shall vote and shall be deemed to have voted to reject any plan of reorganization) unless (x) the First Lien Claims are Paid in Full under such plan or (y) such plan is accepted by the class of holders of First Lien Claims voting thereon and is supported by First Lien Collateral Agent.

6. Distributions of Proceeds of Collateral.

(a) All realizations upon the Collateral or any part thereof (whether occurring before or after the commencement of a case under any Insolvency Law or any other Insolvency or Liquidation Proceeding and including realizations resulting from sales by a Debtor), including any realizations by way of an Enforcement Action (but excluding, for the avoidance of doubt, the use or application of Proceeds of Collateral by Debtors prior to the acceleration of the First Lien Claims or the commencement of an Insolvency or Liquidation Proceeding, in each case, to the extent permitted by, and in accordance with the terms of, the First Lien Credit Agreement and the Indenture) shall be applied as follows:

(i) First, to the costs and expenses of sale, collection or other realization with respect to the Collateral incurred by First Lien Collateral Agent or, solely in the case of an Enforcement Action by a Second Lien Collateral Agent permitted hereunder, by such Second Lien Collateral Agent, including reasonable compensation to First Lien Collateral Agent or such Second Lien Collateral Agent, as applicable, and its agents and counsel, all expenses, liabilities and advances made or incurred by First Lien Collateral Agent or such Second Lien Collateral Agent in connection therewith, all amounts for which First Lien Collateral Agent or the Second Lien Collateral Agents are entitled to indemnification under the First Lien Loan Documents or Second Lien Note Documents, as applicable, all advances made by the First Lien Collateral Agent for the account of a Debtor pursuant to the First Lien Loan Documents, and to the payment of all costs and expenses paid or incurred by First Lien Collateral Agent or, solely in the case of an Enforcement Action by a Second Lien Collateral Agent permitted hereunder, by such Second Lien Collateral Agent, in connection with the exercise of any right or remedy hereunder or under the First Lien Collateral Documents or Second Lien Collateral Documents, as applicable;

(ii) Second, to the other First Lien Claims until the First Lien Claims are Paid in Full in accordance with the First Lien Loan Documents;

(iii) Third, to the extent not paid pursuant to clause (i), above, to Second Lien Collateral Agents’ costs and expenses of sale, collection or other realization with respect to the Collateral, including reasonable compensation to Second Lien Collateral Agents and their agents and counsel, all expenses, liabilities and advances

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made or incurred by Second Lien Collateral Agents in connection therewith, all amounts for which Second Lien Collateral Agents are entitled to indemnification under the Second Lien Note Documents, all advances made by the Second Lien Collateral Agents under the Second Lien Note Documents for the account of a Debtor and to the payment of all costs and expenses paid or incurred by Second Lien Collateral Agents in connection with the exercise of any right or remedy hereunder or under the Second Lien Collateral Documents;

(iv) Fourth, to the other Second Lien Claims until the Second Lien Claims are Paid in Full in accordance with the Second Lien Note Documents;

(v) Fifth, to any amounts owing the First Lien Secured Parties under the First Lien Loan Documents that do not constitute First Lien Claims due to the limitation set forth in clause (iv) of the definition of First Lien Claims; and

(vi) Sixth, to Debtors as their interests may appear or as otherwise required by applicable law.

(b) General Provisions Regarding Distributions.

(i) If Proceeds of Collateral pursuant to a realization of Collateral described in clause (a) above shall be received by any Second Lien Secured Party before all First Lien Claims have been Paid in Full, such Proceeds shall be segregated and held in trust and forthwith paid or delivered by such Second Lien Secured Party to First Lien Collateral Agent on behalf of First Lien Secured Parties, or their representative or representatives, for application to the payment or repayment of all First Lien Claims, to the extent necessary to Pay in Full all First Lien Claims after giving effect to any concurrent payment or distribution, or provision therefor, to First Lien Secured Parties.

(ii) In connection with the distribution of Proceeds of Collateral with respect to Letters of Credit that have not been Paid in Full, (A) such Letters of Credit shall be deemed fully drawn, (B) such Proceeds in an amount not to exceed 105% of the aggregate face amount of such Letters of Credit shall be held as Collateral in an account controlled by First Lien Collateral Agent, (C) if any such Letter of Credit is thereafter drawn, such Proceeds held as Collateral therefore shall be applied to reimburse the issuer thereof in accordance with the First Lien Loan Documents, and (D) if any Letter of Credit terminates or otherwise expires without being fully drawn, such Proceeds held in respect of such Letter of Credit shall be applied in accordance with clause (a) above.

(iii) All payments by the applicable Agent to Secured Parties on account of realizations upon Collateral shall be made (A) in the case of First Lien Claims, to First Lien Collateral Agent for distribution to First Lien Secured Parties in accordance with the First Lien Loan Documents, and (B) in the case of Second Lien Claims, to the applicable Second Lien Collateral Agent for distribution to Second Lien Secured Parties in accordance with the Second Lien Note Documents.

7. Amendment of First Lien Loan Documents and Second Lien Note Documents.

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(a) Until the First Lien Claims are Paid in Full in accordance with the First Lien Loan Documents and the First Lien Hedge Agreements, and notwithstanding anything to the contrary contained in the Second Lien Note Documents, neither Second Lien Holders nor any Second Lien Collateral Agent shall, without the prior written consent of First Lien Collateral Agent (acting with the concurrence of such First Lien Lenders as may be required under the First Lien Credit Agreement), agree to amend, supplement or otherwise change the terms of any Second Lien Note Document or any related or replacement document, or make any payment consistent with an amendment thereof or change thereto, if such amendment, supplement or change contravenes the terms of this Agreement or if the effect of such amendment, supplement or change is to increase the interest rate on the Senior Second Lien Secured Notes, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change any covenant (or definition used therein) to make such covenant more restrictive, change the redemption, prepayment or defeasance provisions thereof, add to the collateral securing the Senior Second Lien Secured Notes, or otherwise, if the effect of such amendment, supplement or change is to increase the obligations of or restrictions applicable to any Debtor or its subsidiaries or to confer any additional rights on any Second Lien Secured Party. For the avoidance of doubt, nothing herein shall be deemed to require any consent from any Second Lien Secured Party or from any Second Lien Collateral Agent, or otherwise limit any right of any First Lien Secured Party, to amend, supplement, otherwise change or waive any rights under any of the First Lien Loan Documents or any First Lien Hedge Agreements.

(b) In the event First Lien Collateral Agent enters into any amendment, waiver or consent in respect of any of the First Lien Collateral Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Collateral Document or changing in any manner the rights of any parties thereunder, then such amendment, waiver or consent shall apply automatically to any comparable provision of the comparable Second Lien Collateral Document without the consent of or action by any Second Lien Secured Party (with all such amendments, waivers and modifications subject to the terms hereof); provided that (i) no such amendment, waiver or consent shall have the effect of removing property subject to the Lien of any Second Lien Collateral Document, except to the extent that a release of such Lien is permitted by Section 9 hereof, (ii) any such amendment, waiver or consent that materially and adversely affects the rights of Second Lien Secured Parties shall not apply to the Second Lien Collateral Documents without the consent of the applicable Second Lien Collateral Agent (other than with respect to amendments, modifications or waivers that secure additional extensions of credit or add additional secured creditors which, in each case, do not violate the express provisions of the Second Lien Note Documents) and (iii) notice of such amendment, waiver or consent shall be given to the applicable Second Lien Collateral Agent prior to its effectiveness, provided that the failure to give such notice shall not affect the effectiveness and validity thereof.

8. Perfection of Possessory Security Interests. For the limited purpose of perfecting the security interests of Secured Parties in those types or items of Collateral in which a security interest may be perfected by possession or control, each Agent hereby appoints the other Agent as its agent for the limited purpose of possessing or controlling on its behalf any such Collateral that may come into the possession or control of such other Agent from time to time,

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and each Agent agrees to act as the other Agent’s agent for such limited purpose of perfecting such other Agent’s security interest by possession or control through an agent (such possession by such agent being intended to satisfy the requirements of Section 24(1) of the PPSA and equivalent sections of comparable legislation in other applicable jurisdictions), provided, that this Section 8 shall not create a fiduciary relationship in respect of any Secured Parties, no Agent shall incur any liability to any other Agent by virtue of acting as such other Agent’s agent hereunder, and either Agent may relinquish possession or control of Collateral in accordance with the terms of the applicable Credit Document without the consent of the other Agent (except that, in the case of any relinquishment of possession or control of Collateral by a Second Lien Collateral Agent prior to the First Lien Claims being Paid in Full, such Second Lien Collateral Agent shall only relinquish possession or control of such Collateral to the First Lien Collateral Agent), and without incurring liability to the other Agent, except as otherwise provided herein or unless there is an express written agreement to the contrary in effect between Agents. Without limiting the foregoing, the First Lien Collateral Agent shall have the right to possess or control any such Collateral until such time as the First Lien Claims are Paid In Full (and, prior to the time the First Lien Claims are Paid In Full, each Second Lien Collateral Agent shall relinquish possession or control of any such Collateral in its possession or under its control to First Lien Collateral Agent promptly upon written request). Promptly following the First Lien Claims being Paid In Full, if the Indenture remains in effect, the First Lien Collateral Agent shall deliver to Trustee (or such Second Lien Collateral Agent as Trustee may direct) all items of Collateral in the possession of the First Lien Collateral Agent pursuant to the First Lien Collateral Documents or as a court of competent jurisdiction otherwise directs.

9. Releases of Security Interests.

(a) Second Lien Secured Parties will cooperate and provide any necessary or appropriate releases with respect to the Collateral to permit an Enforcement Action by First Lien Collateral Agent or any receiver appointed by or at the request of First Lien Secured Parties (or any of them), free and clear of Second Lien Secured Parties’ Lien.

(b) In the event of a sale or other disposition of Collateral by a Debtor in accordance with the terms of the Indenture and the First Lien Loan Documents, with the consent of First Lien Secured Parties or any sale described in Section 5(e), if such First Lien Secured Parties are releasing their first priority Lien in connection therewith, the Lien of Second Lien Secured Parties on such Collateral shall be automatically released and discharged, with no further action or consent by any Second Lien Secured Party, to the extent the Lien of First Lien Secured Parties on such Collateral is released and discharged, and each Second Lien Collateral Agent shall promptly execute and deliver any releases or other documents reasonably requested by First Lien Collateral Agent to evidence such release and discharge at the sole cost and expense of the Debtors; provided that the Liens of Secured Parties in such Collateral shall attach to the Proceeds of such sale or other disposition, and the provisions of this Agreement shall be otherwise applicable to such Proceeds (including any provisions with respect to priority of Liens in such Proceeds, or application thereof to the Claims of Secured Parties).

(c) Until the First Lien Claims are Paid in Full, each Second Lien Collateral Agent, for itself and on behalf of Second Lien Secured Parties, hereby irrevocably constitutes and appoints First Lien Collateral Agent and any officer or agent of First Lien Collateral Agent,

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with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Second Lien Collateral Agent or such holder or in First Lien Collateral Agent’s own name, from time to time in First Lien Collateral Agent’s discretion, for the purpose of carrying out the terms of this Section 9, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 9, including any endorsements or other instruments of transfer or release. This appointment is coupled with an interest, shall survive an Insolvency or Liquidation Proceeding (or the commencement thereof), and is irrevocable until the First Lien Claims are Paid in Full.

(d) Second Lien Secured Parties agree that First Lien Secured Parties may refrain from enforcing Second Lien Secured Parties’ Lien in the Collateral, permit the use or consumption of such Collateral by a Debtor free of such Second Lien Secured Parties’ Lien, or, subject to the limitations set forth in Section 9(b), above, release the Second Lien Secured Parties’ Lien on the Collateral, in each case to the same extent that First Lien Secured Parties refrain from enforcing their own Lien, permit the use or consumption of such Collateral by a Debtor free of their own Lien, or release their own Lien, without incurring any liability to Second Lien Secured Parties.

10. Insurance.

Unless and until the First Lien Claims are Paid in Full, the First Lien Collateral Agent and the First Lien Secured Parties shall have the sole and exclusive right, subject to the rights of the Debtors under the First Lien Loan Documents, to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any expropriation or similar proceeding (or any deed in lieu of expropriation) affecting the Collateral. Unless and until the First Lien Claims are Paid in Full and, subject to the rights of the Debtors under the First Lien Loan Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of expropriation) if in respect to the Collateral shall be paid and distributed in accordance with Section 6 and, if any Second Lien Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award or payment, it shall pay such proceeds over to the First Lien Collateral Agent to be distributed accordingly.

11. When Payment in Full of First Lien Claims Deemed to Not Have Occurred. If, at any time after the First Lien Claims are Paid in Full, the Company promptly thereafter enters into any refinancing or replacement of any First Lien Loan Documents evidencing a First Lien Claim which refinancing or replacement is permitted by clause (2) of the definition of the term “Permitted Indebtedness” as defined in the Indenture as in effect on the date hereof, then such Payment in Full of First Lien Claims shall automatically be deemed not to have occurred for purposes of this Agreement and, from and after the date on which the New First Lien Debt Notice is delivered to the Trustee in accordance with the next sentence, the obligations under such refinancing or replacement of the First Lien Loan Documents shall automatically be treated as First Lien Claims for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, the new documents entered into in connection with such refinancing or replacement shall automatically be treated as First Lien Loan Documents for all purposes of this Agreement, and the collateral agent under such new

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First Lien Loan Documents shall automatically be treated as the First Lien Collateral Agent for all purposes of this Agreement. Upon receipt of a notice (the “New First Lien Debt Notice”) stating that the Company has entered into one or more new First Lien Loan Documents (which notice shall include the identity of the new first lien collateral agent, such agent, the “New Agent”), each Second Lien Collateral Agent shall, at the sole cost and expense of the Debtors, promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as the Company or such New Agent shall reasonably request in order to provide, evidence or confirm to the New Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement, and (b) deliver to the New Agent any pledged Collateral in its possession together with any necessary endorsements. The New Agent shall agree in a writing addressed to the Second Lien Collateral Agents and the Second Lien Secured Parties to be bound by the terms of this Agreement, as so amended or supplemented. If the new First Lien Claims under the new First Lien Loan Documents are secured by property of the Debtors constituting Collateral that does not also secure the Second Lien Claims, then the Second Lien Claims shall be secured at such time by a second priority Lien on such property to the same extent provided in the Second Lien Collateral Documents and this Agreement.

12. Collateral Records. If in the exercise of its respective rights, any Secured Party shall receive possession or control of any Collateral Records which contain information relating to any property of any Debtor, such Secured Party shall notify the Agents that it has received such Collateral Records and shall, as promptly as practicable thereafter, make available to such Agents such Collateral Records for inspection and/or duplication, all subject to any confidentiality restrictions, if any, made in favor of the Debtors in the Credit Documents.

13. Waiver of Right to Require Marshaling. Each Secured Party hereby expressly waives any right that it otherwise might have to require any other Secured Party to marshal property or to resort to or realize upon Collateral in any particular order or manner, whether provided for by common law, statute or equity (notwithstanding that the order, manner and type of realization may affect the amount of proceeds recoverable by any or all of the Secured Parties). No Secured Party shall be required to make a demand under or enforce any guaranty or any Lien given by any Person as a condition precedent or concurrent to the taking of any Enforcement Action.

14. Obligations Unconditional.

(a) First Lien Obligations Unconditional. All rights and interests of First Lien Collateral Agent and the other First Lien Secured Parties hereunder, and all agreements and obligations of Second Lien Collateral Agents, the other Second Lien Secured Parties, Company and the other Debtors hereunder, shall remain in full force and effect irrespective of:

(i) any lack of validity or enforceability of any First Lien Loan Document or any First Lien Hedge Agreement;

(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Lien Claims, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing,

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replacement, refunding, renewal or restatement of any First Lien Loan Document or any First Lien Hedge Agreement;

(iii) until the First Lien Claims have been Paid in Full, any exchange, release, voiding, avoidance, subordination, postponement or non-perfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Lien Claims or any guarantee or guaranty thereof;

(iv) any Insolvency or Liquidation Proceeding (or the commencement of any such proceeding) in respect of any Debtor; or

(v) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Debtor in respect of the First Lien Claims, or of any Second Lien Collateral Agent, any other Second Lien Secured Party or any Debtor in respect of this Agreement (other than Payment in Full).

(b) Second Lien Obligations Unconditional. Subject to compliance with the terms of this Agreement, all rights and interests of the Second Lien Collateral Agents and the other Second Lien Secured Parties hereunder, and all agreements and obligations of First Lien Collateral Agent, the other First Lien Secured Parties, Company and the other Debtors hereunder, shall remain in full force and effect irrespective of:

(i) any lack of validity or enforceability of any Second Lien Note Document;

(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Lien Claims, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, renewal or restatement of any Second Lien Note Document;

(iii) any exchange, release, voiding, avoidance, subordination, postponement or non-perfection of any security interest in any Collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Second Lien Claims or any guarantee or guaranty thereof;

(iv) any Insolvency or Liquidation Proceeding (or the commencement of any such proceeding) in respect of any Debtor; or

(v) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Debtor in respect of the Second Lien Claims, or of First Lien Collateral Agent, any other First Lien Secured Party or any Debtor in respect of this Agreement (other than payment in full in cash of the Second Lien Claims).

15. Exercise of Remedies; No Liability. Subject to any express provision of this Agreement that requires a Secured Party to take or refrain from taking an action, (a) each

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Secured Party may exercise its good faith discretion with respect to exercising or refraining from exercising any of its rights and remedies or taking any Enforcement Action, and (b) each Secured Party agrees that no Secured Party shall incur any liability to any other Secured Party for taking or refraining from taking any action with respect to the Collateral so long as such Secured Party exercises its discretion in good faith. Each Secured Party further agrees that the other Secured Parties shall have no duty (express, implied, fiduciary or otherwise) to it in respect of the maintenance or preservation of the Collateral.

16. PPSA Notices. In the event that any Secured Party shall be required by the PPSA or any other applicable law to give any notice to any other Secured Party, such notice shall be given in accordance with Section 20(e) hereof and, as between Secured Parties, ten days’ notice shall be conclusively deemed to be commercially reasonable and sufficient notice unless the PPSA expressly requires a longer notice period.

17. Preference Issues. If any Debtor makes a payment to a First Lien Secured Party in respect of its First Lien Claims and if such First Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise (and whether as a result of any demand, settlement, litigation or otherwise) to turn over or otherwise pay to the estate of any Debtor any amount of such payment as a preference or otherwise (a “Recovery”), then the First Lien Claims shall be revived to the extent of such Recovery and continue in full force and effect as First Lien Claims entitled to the benefits of this Agreement, as if such payment had not been received by such First Lien Secured Party. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

18. Amendments; Waivers; Termination. No amendment, modification, supplement, termination, consent or waiver of or to any provision of this Agreement nor any consent to any departure therefrom shall in any event be effective unless the same shall be in writing and signed by First Lien Collateral Agent and the Second Lien Collateral Agents then party hereto, and, solely if such amendment, modification, supplement, termination, consent or waiver is adverse to or otherwise increases or makes more burdensome the obligations of a Debtor, consent of such Debtor; provided, however, that a Debtor shall be deemed to have given its consent five Business Days after the date notice of any such amendment, modification, supplement, termination, consent or waiver has been delivered to such Debtor unless such consent is expressly refused by such Debtor prior to such day. The First Lien Collateral Agent, each Second Lien Collateral Agent and the Debtors may rely on the signature of the other as conclusive evidence that such party was acting on instructions of such First Lien Lenders as were required under the First Lien Credit Agreement or on instructions of such Second Lien Holders as were required under the Indenture, as applicable. Any waiver of any provision of this Agreement, or any consent to any departure from the terms of any provisions of this Agreement, shall be effective only in the specific instance and for the specific purpose for which given.

19. Purchase Right. Without in any way limiting the rights of the First Lien Secured Parties to take any action not expressly prohibited by this Agreement, including any Enforcement Action, at any time prior to the Payment in Full of the First Lien Claims and following (i) an acceleration of the First Lien Claims under the First Lien Credit Agreement (or any other First

24

Lien Claims, if at such time all obligations under the First Lien Credit Agreement have been Paid in Full and all commitments thereunder terminated), or (ii) the commencement of an Insolvency or Liquidation Proceeding, the First Lien Secured Parties will offer the Second Lien Secured Parties the option to purchase, all, but not less than all, of the aggregate amount of outstanding First Lien Claims outstanding at the time of purchase at par, without warranty or representation or recourse (except for representations and warranties required to be made by assigning lenders pursuant to the Assignment Agreement (as such term is defined in the First Lien Credit Agreement)). One or more of the Second Lien Secured Parties shall accept such offer within twenty (20) days of the receipt thereof and the parties shall endeavor to close promptly thereafter but in all events no more than twenty (20) days after the making of the offer. If one or more of the Second Lien Secured Parties accept such offer, it shall be exercised pursuant to documentation mutually acceptable to each of the First Lien Collateral Agent and the Trustee, and all costs and expenses of closing any such purchase (including the costs and expenses relating to the preparation of the aforementioned documentation, including reasonable fees and expenses of counsel to the First Lien Secured Parties) shall be paid by the Second Lien Secured Parties as a condition precedent to the closing of any such purchase. If no Second Lien Secured Party or Parties accept such offer within the period set forth above, or any such Second Lien Secured Party that accepts such offer fails to close the purchase of the First Lien Claims within the time frame provided for above, the First Lien Secured Parties shall have no further obligations pursuant to this Section 19 and may take any further actions in their sole discretion in accordance with the First Lien Loan Documents and this Agreement.

20. Miscellaneous.

(a) All terms used in this Agreement and not otherwise defined herein shall have the meanings as set forth in the PPSA as in effect from time to time. Except as otherwise provided herein, priority shall be in accordance with the provisions of the PPSA or other applicable law.

(b) This Agreement shall be binding upon, inure to the benefit of and be enforceable by First Lien Collateral Agent on behalf of itself and First Lien Secured Parties, and each Second Lien Collateral Agent on behalf of itself and Second Lien Secured Parties, and in each case their respective successors and assigns, including, in relation to any replacement agreement or facility existing at any time to refund, refinance, replace, refund or renew (including subsequent or successive refinancings, replacements, refundings and renewals whether with the same or new lenders) the First Lien Credit Agreement or the Indenture. Each party hereto represents and warrants that it is authorized to enter into this Agreement.

(c) This Agreement is intended by the parties as a final expression of their agreement relating to the subject matter hereof and is intended as a complete statement of the terms and conditions of their agreement relating to the subject matter hereof.

(d) No failure or delay on the part of any Secured Party in the exercise of any power, right, remedy or privilege under this Agreement shall impair such power, right, remedy or privilege or shall operate as a waiver thereof; nor shall any single or partial exercise of any such power, right, remedy or privilege preclude any other or further exercise of any other power, right, remedy or privilege. The waiver of any such right, power, remedy or privilege with

25

respect to particular facts and circumstances shall not be deemed to be a waiver with respect to other facts and circumstances.

(e) Each notice hereunder shall be in writing and may be personally served or sent by telefacsimile or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile. Unless otherwise specified in a notice delivered in accordance with the foregoing provisions of this Section 20(e), notices, demands, instructions and other communications in writing shall be given to or made upon the respective parties hereto at their respective addresses indicated on the signature pages hereof.

(f) This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by different parties hereto or thereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto.

(g) In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

(h) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS IN EFFECT IN THE PROVINCE OF ALBERTA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

(i) Anything contained in this Agreement to the contrary notwithstanding, each party to this Agreement shall no longer be a party from and after such time as all of the obligations owing such party from Debtors as contemplated hereunder (other than Unasserted Obligations) shall have ceased to be outstanding by virtue of the final and irrevocable payment in full thereof or the cancellation thereof or delivery for cancellation or cash collateralization thereof in accordance with their terms.

(j) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business

26

relationship, that it has already relied on this waiver in entering into this agreement, and that it will continue to rely on this waiver in its related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 20(J) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

(k) In the event of any conflict between the provisions of this Agreement and the provisions of the First Lien Loan Documents, the First Lien Hedge Agreements or the Second Lien Note Documents, the provisions of this Agreement shall govern and control; provided that, notwithstanding any other provision hereof, nothing in this Agreement shall affect, impair or otherwise limit any rights or obligations of the Debtors under the Credit Documents and applicable law.

(l) Trustee agrees not to appoint any sub-collateral agent pursuant to Section 7.13 of the Indenture, unless such sub-collateral agent agrees to be bound by the terms of this Agreement as a Second Lien Collateral Agent.

(m) Nothing in the St. Paul Priority Agreement shall affect the rights or obligations of the parties hereto with respect to each other under this Agreement or the relative priorities of the First Lien Claims and the Second Lien Claims established hereby.

[Remainder of this page intentionally left blank]

27

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

GE CANADA FINANCE HOLDING COMPANY, as First Lien Collateral Agent
By:	/s/ Stephen B. Smith
	Name: Stephen B. Smith
	Title: President

Notice Address:

GE Canada Finance Holding Company, as

Collateral Agent

100 California Street, 10th Floor

San Francisco, California 94111

Attention: Daniel Shapiro, Global Sponsor Finance

Facsimile: (415) 277-7443

S-1

WELLS FARGO BANK, N.A., as Trustee
By:	/s/ Melissa Scott
	Name: Melissa Scott
	Title: Vice President

Notice Address:

Wells Fargo Bank, N.A.

505 Main Street

Fort Worth, Texas 76102

Attention: Melissa Scott

Fax: (817) 885-8650

S-2

COMPUTERSHARE TRUST COMPANY OF CANADA, as Sub-Collateral Agent
By:	/s/ Tina F. Vitale
	Name: Tina F. Vitale
	Title: Professional, Corporate Trust Officer

By:	/s/ Nelia Andrade
	Name: Nelia Andrade
	Title: Manager, Corporate Trust Services

Notice Address:

Attention: Louis-Philippe Marineau, LL.B.

Professional, Corporate Trust Corporate Trust

Services

Computershare Trust Company of Canada

1500 University, Suite 700

Montreal, Quebec H3A 3S8

Telephone: (514) 982-7888 ext.7501

Fax: (514) 982-7677

S-3

CONSENT OF DEBTORS AND AGREEMENT TO BE BOUND

Each of the undersigned Debtors has read the foregoing Agreement and consents thereto and agrees to be bound thereby. Each of the undersigned Debtors agrees not to take any action that would be contrary to the provisions of the foregoing Agreement and agrees that no Secured Party shall have any liability to any Debtor for acting in accordance with the provisions of the foregoing Agreement. Each Debtor understands that the foregoing Agreement is for the sole benefit of First Lien Secured Parties and Second Lien Secured Parties and their respective successors and assigns, and that such Debtor is not, except as expressly provided in the foregoing Agreement, an intended beneficiary or third party beneficiary thereof.

Dated as of May 19, 2005

NORTH AMERICAN ENERGY PARTNERS INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN CONSTRUCTION GROUP INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN CONSTRUCTION LTD.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN CAISSON LTD.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN ENGINEERING INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN ENTERPRISES LTD.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN INDUSTRIES INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN MAINTENANCE LTD.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN MINING INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN PIPELINE INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN ROAD INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN SERVICES INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

GRIFFITHS PILE DRIVING INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN SITE DEVELOPMENT LTD.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NORTH AMERICAN SITE SERVICES INC.
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Treasurer

NACG FINANCE LLC
By:	/s/ Chris Hayman
	Name: Chris Hayman
	Title: Secretary

Notice Address for each

of the Debtors listed above:

c/o North American Energy Partners Inc.

Zone 3, Acheson Industrial Area

2-53016 Highway 60

Acheson, Alberta T7X 5G7

Facsimile: (780) 960-7103

Attention: Vincent Gallant

EX-10.3

EXHIBIT 10.3

INDEMNITY AGREEMENT

THIS AGREEMENT is made effective as of the     th day of                      200  .

BETWEEN:

NACG HOLDINGS INC.,

- and -

NACG PREFERRED CORP.,

- and -

NORTH AMERICAN ENERGY PARTNERS INC.,

- and -

NORTH AMERICAN CONSTRUCTION GROUP INC.,

each of the above entities being a corporation incorporated under the laws of Canada, and referred to herein separately as a “Corporation” and collectively as the “Corporations”

- and -

, of the City of ,

in the              of

(the “Indemnitee”)

WHEREAS:

A. Each of the Corporations was incorporated under the provisions of the Canada Business Corporations Act (the “Act”), and each Corporation is a direct or indirect affiliate (as defined in the Act) of the other Corporations;

B. The Indemnitee has been nominated to act as a director and/or an officer of one or more of the Corporations, and he has, in conjunction with this indemnity agreement (the “Agreement”), agreed to act as a director and/or an officer of one or more of the Corporations;

C. Each Corporation acknowledges that the Indemnitee has been nominated to act as a director and/or an officer of some or all of the other Corporations, and desires to enter into this Agreement for the purpose of indemnifying the Indemnitee in respect of liabilities which he may incur in connection therewith;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained and for other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged by the parties hereto), and in consideration of the Indemnitee’s consenting or continuing to act as a director and/or officer of one of more of the Corporations and any other entity as requested by a Corporation, the parties hereby agree with the others as follows:

1. Each Corporation, jointly and severally, shall indemnify the Indemnitee and his heirs and legal representatives from and against all liabilities, obligations, costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal, investigative, administrative action or other proceeding (collectively, a “Proceeding”) in which he is involved by reason of being or having been a director or officer of any one of the Corporations or, at the request of any one of the Corporations, being or having been a director or officer or acting in a similar capacity of any other entity, in each case if, for each Corporation or entity that is directly involved in a Proceeding:

(a) he acted honestly and in good faith with a view to the best interests of the Corporation, or, as the case may be, to the best interests of the other entity for which the Indemnitee acted as director or officer or in a similar capacity at the Corporation’s request;

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful; and

- 2 -

(c) in the case of an action by or on behalf of the Corporation or other entity to procure a judgment in its favour, the Corporation obtains any approval required under the Act in respect of such indemnification.

2. Expenses (including lawyer’s fees) incurred by the Indemnitee in defending any claim or charge made in a Proceeding shall be paid from time to time by each Corporation, on a joint and several basis, in advance of the final disposition of such action, suit or proceeding, within 14 days after receipt by the Corporation from the Indemnitee of a Statement of Undertaking in substantially the form set forth in Exhibit A, in which he (1) states that as a director or officer, he has reasonably incurred actual expenses in defending a civil, criminal, investigative, administrative or other proceeding and (2) undertakes to repay such amount if he/she does not fulfill the conditions of subsections 1(a) and (b), and (ii) in the case of an action by or on behalf of a Corporation or other entity to procure a judgment in its favour to which the Indemnitee is made a party because of his association with a Corporation or other entity, such Corporation obtains any approval(s) required therefor under the Act.

3. Except to the extent contrary to the Act or applicable law, each Corporation, on a joint and several basis, shall indemnify the Indemnitee and his heirs and legal representatives from and against all other costs, charges losses and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any action or Proceeding to which he is made a party by reason of being a director or officer, or acting in a similar capacity, of the Corporations or, at the request of the Corporation, of any other entity.

4. Any indemnification under Section 1 or 3 shall be made:

(a) either by order of a court on the application of the Indemnitee or as authorized in the specific case upon a determination, in accordance with the procedures set forth in Section 7, that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth at subsections 1(a) and (b). For greater certainty, an Indemnitee may, at his option, either apply to a court to determine his rights to indemnification hereunder or may, upon complying with Section 7, require such determination to be made in accordance with Section 7.

- 3 -

(b) Where the determination is to be made under Section 7, such determination shall be made by a written resolution of the majority of disinterested directors or by an Independent Counsel, as the case may be.

5. The termination of any Proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that an Indemnitee did not act in good faith with a view to the best interest of the Corporation, and, with respect to any criminal or administrative action or proceeding that is enforced by a monetary penalty, he/she did not have reasonable grounds for believing the conduct was lawful.

6. For the purposes of Section 7 of this Agreement, the term “disinterested directors” means those directors of the applicable Corporation who are not full-time employees or officers of any Corporation and who are not claiming the right to indemnification being voted upon and neither were nor are a party to the Proceeding. The term “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of law related to business entities and neither contemporaneously is, nor in the five years theretofore has been, retained to represent: (1) any Corporation or Indemnitee in any matter material to either such party, (2) any other party to the Proceeding giving rise to a claim for indemnification hereunder or (3) the beneficial owner, directly or indirectly, of any equity or debt securities of any of the Corporations. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing any Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

7. Determination of Right to Indemnification. An Indemnitee may, upon complying with this Section 7, require the disinterested directors of the Corporation or the Independent Counsel, as the case may be, to make the determination as to whether the Corporation is required to indemnify the Indemnitee in accordance with the following procedures:

7.1 Indemnitee shall submit to the board of directors of the applicable Corporation a Statement of Request for Indemnification in substantially the form set forth in

- 4 -

Exhibit B, in which the Indemnitee states that he has met the applicable standard of conduct set forth in subsections 1(a) and (b).

7.2 An Indemnitee’s submission of a Statement of Request for Indemnification shall create a rebuttable presumption that the Indemnitee has met the applicable standard of conduct set forth in Section 1 and, therefore, is entitled to indemnification under Section 4. The determination of the right to an indemnity under this Agreement shall be made by a written resolution of a majority of disinterested directors provided that if one half or less of the directors of such Corporation are disinterested directors, or if the Indemnitee so requests in writing at the time of his submission of his Statement of Request for Indemnification, the determination of the right to an indemnity under this Agreement shall be made by Independent Counsel as hereinafter provided. The disinterested directors of the Corporation, or the Independent Counsel, as set out at Section 7.3 below, shall determine, within the time periods contemplated by Section 7.4, that an Indemnitee is so entitled, unless it or they shall possess clear and convincing evidence to rebut the foregoing presumption, which evidence shall be disclosed to Indemnitee with particularity in a sworn written statement signed by all persons who participated in the determination and voted to deny indemnification.

7.3 If one half or more of the directors of the applicable Corporation are not disinterested directors, or if the Indemnitee so requests, the determination of the right to indemnification under this Agreement shall be made by Independent Counsel appointed by majority vote of the disinterested directors of the Corporation. If there are no disinterested directors, then the Independent Counsel shall be appointed by the chairman of the board of the applicable Corporation. In either case, such appointment shall be made as soon as practicable and, in any event, within 20 days after the delivery of the Statement of Request for Indemnification and, immediately upon such appointment, the Corporation shall give written notice to the Indemnitees (“Independent Counsel Notice”) advising them of the identity of the Independent Counsel so selected. The Corporation shall pay any and all reasonable fees and expenses of the Independent Counsel incurred by such Independent Counsel in connection with acting pursuant hereto and provide such person with appropriate

- 5 -

indemnification, and the Corporation shall pay all reasonable fees and expenses incident to the procedures of this Section 7.3, regardless of the manner in which such Independent Counsel was selected or appointed. The rights and obligations of the parties under this Section 7.3 shall be subject to, and shall be given effect only to the extent permitted by, applicable Law.

7.4 If the person or persons empowered or selected under this Agreement to determine whether Indemnitees are entitled to indemnification shall not have made a determination within 45 days after receipt by the Corporation of the relevant Statement of Request for Indemnification (or, if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 7.3 of this Agreement, and such determination shall not have been made and delivered in written opinion within 45 days after such Independent Counsel’s being appointed), the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee(s) shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable Law; provided, however, that such 45-day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person making the determination with respect to entitlement to indemnification in good faith requires such additional time for obtaining or evaluating documentation and/or information relating to such determination.

7.5 In the event that the disinterested directors or the Independent Counsel, as the case may be, determine that an Indemnitee is not entitled to indemnification hereunder; or , if the Indemnitee at any time elects not to refer the matter to the disinterested directors or the Independent Counsel under this Section 7, the Indemnitee may apply to the Court to determine whether he is, in fact, entitled to indemnification hereunder and the Court’s decision in connection herewith shall be determinative of the Indemnitee’s right to indemnification pursuant to this Agreement.

8. Each Corporation shall use its best efforts to obtain any approval required under the Act or otherwise in respect of any indemnification required to be made by it under this Agreement.

- 6 -

9. Any indemnification to be made to an Indemnitee under this Agreement shall not be reduced or otherwise affected by any remuneration, benefits or privileges that he shall have received, or to which he may become entitled, at any time for acting in his capacity as a director or officer of any Corporation or any other body corporate.

10. The indemnification and advancement of sums provided by, or granted pursuant to, this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may be entitled under any agreement, vote, action or consent of shareholders, applicable law or otherwise, both as to action in the Indemnitee’s official capacity for each Corporation and as to action in another capacity while holding such offices. This Agreement is intended to provide indemnity to the Indemnitee to the fullest extent allowed under applicable law, including but not limited to statutory law and judicial decisions. Accordingly, to the extent permitted by applicable law, if the applicable law permits greater indemnity than the indemnity set forth herein, or if any amendment is made to any applicable law expanding the indemnity permissible under applicable law, the indemnity obligations contained herein automatically shall be expanded, without the necessity of action on the part of any party, to the extent necessary to provide to the Indemnitee the fullest indemnity permissible under applicable law.

11. If (i) a Corporation is a constituent entity in an amalgamation, merger or consolidation, whether the Corporation is the resulting or surviving entity or is absorbed as a result thereof, (ii) the Corporation is converted into another type of entity, or (iii) if there is a change in control of the Corporation, or a sale or other complete disposition of all or substantially all of the assets of the Corporation, the Indemnitee shall stand in the same position under this Agreement with respect to the resulting, surviving, changed, acquiring or converted entity as the Indemnitee would have had with respect to the Corporation if its separate existence had continued or if there had been no change in the control of the Corporation or a sale or other complete disposition of all or substantially all of the assets of the Corporation.

12. If a Corporation voluntarily decides to dissolve or to file a petition for relief under applicable bankruptcy, moratorium or similar laws, then not later than ten days prior to such disposition or filing, the Corporation shall deposit in trust for the sole and exclusive benefit of the

- 7 -

Indemnitee a cash amount equal to all amounts previously authorized or required to be paid to the Indemnitee hereunder, such amounts to be used to discharge the Corporation’s obligations to the Indemnitee hereunder. Any amounts in such trust not required for such purpose shall be returned to the Corporation. This Section shall not apply to the dissolution of the Corporation in connection with a transaction as to which Section 11 applies.

13. The parties shall sign such further and other resolutions, documents and instruments, cause such meetings to be held, votes cast, special resolutions passed, by-laws enacted and documents executed, and do and perform and cause to be done and performed such further and other acts and things as may be necessary or desirable to give full effect to this Agreement.

14. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument.

15. This Agreement shall be governed by, construed and enforced in accordance with the laws of the Province of Alberta and the laws of Canada applicable therein. The parties hereby attorn and submit to the non-exclusive jurisdiction of the Courts of the Province of Alberta in connection with any action, suit or proceeding brought in relation to this Agreement.

16. This Agreement may not be assigned without the written consent of all of the parties hereto, and shall enure to the benefit of and be binding upon the parties hereto, and their respective heirs, legal representatives, successors and permitted assigns.

17. This Agreement may not be amended without the written consent of the parties hereto. This Agreement shall be effective as of the date hereof and shall remain in full force and effect until the Indemnitee no longer serves as a director or officer of any one of the Corporations or in a similar capacity with any other entity for which the Indemnitee has acted at the request of any one of the Corporations. Any termination shall not affect any obligation of each Corporation arising prior to termination in favour of the Indemnitee, including without limitation any obligation to indemnify by reason of any matter that has arisen or circumstances which have occurred prior to termination.

- 8 -

18. The invalidity or unenforceability of any provision of this Agreement or any covenant herein contained shall not affect the validity or enforceability of any other provision or covenant hereof or herein contained, and the Agreement shall be construed as if such invalid or unenforceable provision or covenant were omitted.

19. In this Agreement, where the context so required words importing number shall include the singular and plural, words importing gender shall include the masculine, feminine and neuter genders and words importing persons shall include firms and corporations and vice versa.

20. Time shall be of the essence of this Agreement and of each and every part hereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

- 9 -

IN WITNESS WHEREOF the parties hereto have executed this Agreement under seal as of the date first above written.

SIGNED, SEALED AND DELIVERED	)	DIRECTOR OR OFFICER
in the presence of	)
	)
	)
Witness	)	Name :
	)
		NACG HOLDINGS INC.
		By:
			Ron McIntosh
			Director
		NACG PREFERRED CORP.
		By:
			Ron McIntosh
			Director
		NORTH AMERICAN ENERGY PARTNERS INC.
		By:
			Ron McIntosh
			Director
		NORTH AMERICAN CONSTRUCTION GROUP INC.
		By:
			Ron McIntosh
			Director

- 10 -

EXHIBIT A

STATEMENT OF UNDERTAKING

STATE/PROVINCE OF                                

COUNTY OF                            

I,                                              , being first duly sworn, depose and say as follows:

1. This Statement of Undertaking is submitted pursuant to the Indemnity Agreement dated                                     , between NACG Holdings Inc., NACG Preferred Corp., North American Energy Partners Inc., North American Construction Group Inc. (the “Corporations”), and me.

2. I am requesting the advancement of certain actual expenses which I have reasonably incurred in defending a civil or criminal action, suit or proceeding by reason of the fact that I am or was a director or officer of the Corporation or I am serving or have served at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise.

3. I hereby undertake to repay this advancement of expenses if it is ultimately determined that I am not entitled to be indemnified by the Corporation

4. I am requesting the advancement of expenses in connection with the following action, suit or proceeding.

I have executed this Statement of Undertaking on                                 .

Signature

Print Name

Subscribed and sworn to before me on                     .

Notary Public (State/Province)

My commission expires:                                          

- 11 -

EXHIBIT B

STATEMENT OF REQUEST FOR INDEMNIFICATION

STATE/PROVINCE OF                                

COUNTY OF                            

I,                                              , being first duly sworn, depose and say as follows:

1. This Statement of Request for Indemnification is submitted pursuant to the Indemnity Agreement dated                                     , between NACG Holdings Inc., NACG Preferred Corp., North American Energy Partners Inc., North American Construction Group Inc. (the “Corporations”) and me.

2. I am requesting indemnification against expenses (including lawyer’s fees) and, with respect to any action not by or in the right of the Corporation, judgments, fines and amounts paid in settlement, all of which have been actually and reasonably incurred by me in connection with a certain action, suit or proceeding to which I am a party or am threatened to be made a party by reason of the fact that I am or was a director or officer of the Corporation or I am serving or have served at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise.

3. With respect to all matters related to any such action, suit or proceeding, I acted honestly and in good faith with a view to the best interests of the Corporation, and, with respect to any criminal or administrative action that is enforced by a monetary penalty, I had reasonable grounds to believe that my conduct was lawful.

4. I am requesting indemnification in connection with the following action, suit or proceeding.

I have executed this Statement of Request for Indemnification on                                 .

Signature

Print Name

Subscribed and sworn to before me on                     .

Notary Public (State/Province)

My commission expires:                                          

- 12 -

EX-12.1

EXHIBIT 12.1

Computation of Ratio of Earnings to Fixed Charges

(dollars in thousands)

	Predecessor												Nine Months Ended December 31,
	Historical
	Year ended March 31,
	2000		2001			2002		2003		2004			2003			2004
Earnings:
Income (loss) from operations before income taxes	$	15,142	$	(3,575	)	$	2,298	$	19,109	$	(25,189	)	$	(20,017	)	$	(31,694	)
Plus fixed charges		3,449		6,466			7,809		6,235		15,521			7,833			25,472
Earnings	$	18,591	$	2,891		$	10,107	$	25,344	$	(9,668	)	$	(13,184	)	$	(6,222	)
Fixed charges:
Interest expense, including amortization of debt issue costs	$	1,276	$	3,034		$	3,510	$	4,162	$	13,148		$	5,556		$	24,811
Estimated interest factor of rental expense		2,173		3,432			4,299		2,073		2,373			2,277			661
Fixed charges	$	3,449	$	6,466		$	7,809	$	6,235	$	15,521		$	7,833		$	25,472
Ratio of Earnings to Fixed Charges (1)		5.4		—			1.3		4.1		—			—			—

(1) For the purposes of calculating the ratio of earnings to fixed charges, (1) earnings consist of earnings (loss) before fixed charges and income taxes and (2) fixed charges consist of interest expense on all indebtedness, including capital lease obligations. During the periods presented, no interest costs have been capitalized. The amount by which fixed charges exceeded earnings was $3,575 for the fiscal year ended March 31, 2001, $25,189 for the fiscal year ended March 31, 2004, $21,017 for the nine months ended December 31, 2003 and $31,694 for the nine months ended December 31, 2004.

EX-23.3

Exhibit 23.3

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

North American Energy Partners Inc.

We consent to the use of our audit report dated June 8, 2004 on the consolidated balance sheets of North American Energy Partners Inc. as at March 31, 2004 and the consolidated statements of operations and retained earnings and cash flows for the year in the period ended March 31, 2004 included herein and to the reference to our firm under the heading “Experts” in the Prospectus.

/s/ KPMG LLP

Chartered Accountants

Edmonton, Canada

June 7, 2005

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Norama Ltd.,

We consent to the use of our audit report dated May 30, 2003, except as to notes 17 and 18 which are as of October 17, 2003, on the consolidated balance sheets of Norama Ltd. as at March 31, 2002 and 2003 and the consolidated statements of operations and retained earnings and cash flows for each of the years in the three-year period ended March 31, 2003 included herein and to the reference to our firm under the heading “Experts” in the Prospectus.

/s/ KPMG LLP

Chartered Accountants

Edmonton, Canada

June 7, 2005

EX-24.1

EXHIBIT 24.1

POWERS OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of North American Energy Partners Inc., a Canadian federal corporation (the “Corporation”), and of North American Construction Group Inc., a Canadian federal corporation (the “Guarantor”), hereby constitutes and appoints Allen Maydonik and Chris Hayman, and each of them (with full power to each of them to act alone), the undersigned’s true and lawful attorney-in-fact and agent, for the undersigned and on the undersigned’s behalf and in the undersigned’s name, place and stead, in any and all capacities, to sign, execute and file with the Securities and Exchange Commission a registration statement on Form F-4 or S-4 (or other appropriate form), for the purpose of registering up to US$60,481,000 of 9% Senior Secured Notes due 2010 of the Corporation, and the guarantee thereof given by the Guarantor, to be offered in exchange for the Corporation’s outstanding 9% Senior Secured Notes due 2010, and the guarantee thereof given by the Guarantor, together with all amendments thereto, with all exhibits and any and all documents required to be filed with respect thereto with any regulatory authority, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, each of the undersigned has hereto signed this powers of attorney, or a counterpart hereof, this 23^rd day of May, 2005.

/s/    E.J. ANTONIO III	/s/    JOHN A. BRUSSA
E.J. Antonio III	John A. Brussa
/s/    JEAN-PIERRE L. CONTE	/s/    JIM G. GARDINER
Jean-Pierre L. Conte	Jim G. Gardiner
/s/    DONALD R. GETTY	/s/    MARTIN GOUIN
Donald R. Getty	Martin Gouin
/s/    JOHN D. HAWKINS	/s/    RONALD A. MCINTOSH
John D. Hawkins	Ronald A. McIntosh
/s/    WILLIAM C. OEHMIG	/s/    GORDON PARCHEWSKY
William C. Oehmig	Gordon Parchewsky
/s/    K. RICK TURNER	/s/    GARY K. WRIGHT
K. Rick Turner	Gary K. Wright

POWERS OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned managers of NACG Finance LLC, a Delaware limited liability company (the “Company”), hereby constitutes and appoints Allen Maydonik and Chris Hayman, and each of them (with full power to each of them to act alone), the undersigned’s true and lawful attorney-in-fact and agent, for the undersigned and on the undersigned’s behalf and in the undersigned’s name, place and stead, in any and all capacities, to sign, execute and file with the Securities and Exchange Commission a registration statement on Form F-4 or S-4 (or other appropriate form), for the purpose of registering up to US$60,481,000 of 9% Senior Secured Notes due 2010 of North American Energy Partners Inc., a Canadian federal corporation (the “Corporation”), and the guarantee thereof given by the Company, to be offered in exchange for the Corporation’s outstanding 9% Senior Secured Notes due 2010, and the guarantee thereof given by the Company, together with all amendments thereto, with all exhibits and any and all documents required to be filed with respect thereto with any regulatory authority, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, each of the undersigned has hereto signed this powers of attorney this 23^rd day of May, 2005.

/s/    RON CRAWFORD	/s/    BERNIE ROBERT
Ron Crawford	Bernie Robert

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Griffiths Pile Driving Inc., an Alberta corporation, North American Caisson Ltd., an Alberta corporation, North American Construction Ltd., a Canadian federal corporation, North American Engineering Inc., an Alberta corporation, North American Enterprises Ltd., an Alberta corporation, North American Industries Inc., an Alberta corporation, North American Maintenance Ltd., an Alberta corporation, North American Mining Inc., an Alberta corporation, North American Pipeline Inc., an Alberta corporation, North American Road Inc., an Alberta corporation, North American Services Inc., an Alberta corporation, North American Site Development Ltd., an Alberta corporation, and North American Site Services Inc. an Alberta corporation (collectively, the “Guarantors”), hereby constitutes and appoints Allen Maydonik and Chris Hayman, and each of them (with full power to each of them to act alone), the undersigned’s true and lawful attorney-in-fact and agent, for the undersigned and on the undersigned’s behalf and in the undersigned’s name, place and stead, in any and all capacities, to sign, execute and file with the Securities and Exchange Commission a registration statement on Form F-4 or S-4 (or other appropriate form), for the purpose of registering up to US$60,481,000 of 9% Senior Secured Notes due 2010 of North American Energy Partners Inc., a Canadian federal corporation (the “Corporation”), and the guarantee thereof given by each of the Guarantors, to be offered in exchange for the Corporation’s outstanding 9% Senior Secured Notes due 2010, and the guarantee thereof given by each of the Guarantors, together with all amendments thereto, with all exhibits and any and all documents required to be filed with respect thereto with any regulatory authority, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has hereto signed this powers of attorney, or a counterpart hereof, this 6th day of June, 2005.

/s/ John D. Hawkins

John D. Hawkins

EX-25.1

EXHIBIT 25.1

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE

ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ¨

WELLS FARGO BANK, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

Not Applicable	94-1347393
(State of incorporation	I.R.S. employer
if not a U.S. national bank)	identification no.)

505 Main Street, Suite 301
Fort Worth, Texas	76102
(Address of principal executive offices)	(Zip code)

Wells Fargo & Company

Law Department, Trust Section

MAC N9305-172

Sixth and Marquette, 17th Floor

Minneapolis, MN 55479

(agent for services)

North American Energy Partners, Inc.

(Exact name of obligor as specified in its charter)

a Canadian federal corporation	______________________
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)

9% Senior Secured Notes due 2010

(Title of the indenture securities)

Item 1. General Information. Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency,

Treasury Department

Washington, D.C. 20230

Federal Deposit Insurance Corporation

Washington, D.C. 20429

Federal Reserve Bank of San Francisco

San Francisco, CA 94120

(b) Whether it is authorized to exercise corporate trust powers.

The trustee is authorized to exercise corporate trust powers.

Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation.

None with respect to the trustee.

No responses are included for Items 3-14 of this Form T-1 because the obligor is not in default as provided under Item 13.

Item 15. Foreign Trustee. Not applicable.

Item 16. List of Exhibits.

Wells Fargo Bank incorporates by reference into this Form T-1 exhibits attached hereto.

Exhibit  1. A copy of the Articles of Association of the trustee now in effect.*

Exhibit  2. A copy of the Comptroller of the Currency Certificate of Corporate Existence for Wells Fargo Bank, National Association, dated November 28, 2001.*

Exhibit  3. A copy of the authorization of the trustee to exercise corporate trust powers. A copy of the Comptroller of the Currency Certificate of Corporate Existence (with Fiduciary Powers) for Wells Fargo Bank, National Association, dated November 28, 2001.*

Exhibit  4. Copy of By-laws of the trustee as now in effect.*

Exhibit  5. Not applicable.

Exhibit  6. The consents of United States institutional trustees required by Section 321(b) of the Act.

Exhibit  7. Attached is a copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.

Exhibit  8. Not applicable.

Exhibit  9. Not applicable.

* Incorporated by reference to exhibit number 25 filed with registration statement number 333-87398.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wells Fargo Bank, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Fort Worth and State of Texas on the day of 3^rd of June, 2005.

WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/ Melissa Scott
	Melissa Scott, Vice President

Exhibit 6

June 3, 2005

Securities and Exchange Commission

Washington, D.C. 20549

Gentlemen:

In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, the undersigned hereby consents that reports of examination of the undersigned made by Federal, State, Territorial, or District authorities authorized to make such examination may be furnished by such authorities to the Securities and Exchange Commission upon its request thereof.

Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION
By:	/s/ Melissa Scott
	Melissa Scott, Vice President

Exhibit 7

Consolidated Report of Condition of

Wells Fargo Bank National Association

of 101 North Phillips Avenue, Sioux Falls, SD 57104

And Foreign and Domestic Subsidiaries,

at the close of business March 31, 2005, filed in accordance with 12 U.S.C. §161 for National Banks.

		Dollar Amounts In Millions
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin		$	13,089
Interest-bearing balances			2,119
Securities:
Held-to-maturity securities			0
Available-for-sale securities			25,486
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold in domestic offices			3,066
Securities purchased under agreements to resell			915
Loans and lease financing receivables:
Loans and leases held for sale			38,833
Loans and leases, net of unearned income	243,507
LESS: Allowance for loan and lease losses	2,367
Loans and leases, net of unearned income and allowance			241,140
Trading Assets			6,010
Premises and fixed assets (including capitalized leases)			3,453
Other real estate owned			130
Investments in unconsolidated subsidiaries and associated companies			321
Customers’ liability to this bank on acceptances outstanding			93
Intangible assets
Goodwill			8,612
Other intangible assets			9,619
Other assets			14,541
Total assets		$	367,427
LIABILITIES
Deposits:
In domestic offices		$	260,205
Noninterest-bearing	78,724
Interest-bearing	181,481
In foreign offices, Edge and Agreement subsidiaries, and IBFs			19,915
Noninterest-bearing	6
Interest-bearing	19,909
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices			11,391
Securities sold under agreements to repurchase			3,347

	Dollar Amounts In Millions
Trading liabilities		4,996
Other borrowed money
(includes mortgage indebtedness and obligations under capitalized leases)		14,191
Bank’s liability on acceptances executed and outstanding		93
Subordinated notes and debentures		7,606
Other liabilities		12,350
Total liabilities	$	334,094
Minority interest in consolidated subsidiaries		52
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		520
Surplus (exclude all surplus related to preferred stock)		24,521
Retained earnings		7,788
Accumulated other comprehensive income		452
Other equity capital components		0
Total equity capital		33,281
Total liabilities, minority interest, and equity capital	$	367,427

I, Karen B. Martin, Vice President of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief.

Karen B. Martin

Vice President

We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.

Howard Atkins
Carrie Tolstedt	Directors
Pat Callahan

EX-99.1

EXHIBIT 99.1

NOTICE OF GUARANTEED DELIVERY

for tender of

9% Senior Secured Notes due 2010

of

NORTH AMERICAN ENERGY PARTNERS INC.

Pursuant to the Prospectus

dated                    , 2005

The Exchange Agent for the Exchange Offer is:

Wells Fargo Bank, N.A.

By Overnight Delivery	By Facsimile:	By Registered or
or Regular Mail:		Certified Mail:
	(617) 667-4927
Wells Fargo Bank, N.A.		Wells Fargo Bank, N.A.
Corporate Trust Operations	Confirm by Telephone:	Corporate Trust Operations
Sixth and Marquette		MAC N9303-121
MAC N9303-121	(800) 344-5128	P.O. Box 1517
Minneapolis, MN 55479		Minneapolis, MN 55480-1517

Delivery of this Notice of Guaranteed Delivery to an address, or transmission of this Notice of Guaranteed Delivery via facsimile, other than as set forth above will not constitute valid delivery.

As set forth under the caption, “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” in the Prospectus dated                     , 2005 (the “Prospectus”) of North American Energy Partners Inc. (the “Company”) and in Instruction 2 of the related Letter of Transmittal (the “Letter of Transmittal” and, together with the Prospectus, the “Exchange Offer”), this form must be used to accept the Company’s offer to exchange its 9% Senior Secured Notes due 2010 (the “Exchange Notes”) for its 9% Senior Secured Notes due 2010 (the “Original Notes”) if time will not permit the Letter of Transmittal, certificates representing such Original Notes and all other required documents to reach the Exchange Agent, or the procedures for book-entry transfer cannot be completed, on or prior to the Expiration Date. This form must be delivered by an Eligible Institution (as defined in the Letter of Transmittal) by mail or overnight delivery or transmitted, via facsimile, to the Exchange Agent as set forth above. All capitalized terms used herein but not defined herein shall have the meaning ascribed to them in the Prospectus or the Letter of Transmittal.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions to the Letter of Transmittal, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal.

Ladies and Gentlemen:

The undersigned hereby tender(s) to the Company, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which are hereby acknowledged, the aggregate principal amount of the Original Notes specified below pursuant to the guaranteed delivery procedures set forth under the caption “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery” of the Prospectus.

The undersigned understands that tenders of Original Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned understands that no withdrawal of a tender of Original Notes may be made on or after the Expiration Date. The undersigned understands that for a withdrawal of a tender of Original Notes to be effective, a written notice of withdrawal must be timely received by the Exchange Agent at one of its addresses specified on the cover of this Notice of Guaranteed Delivery prior to the Expiration Date.

The undersigned understands that payment by the Exchange Agent for Original Notes tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of such Original Notes (or Book-Entry Confirmation of the transfer of such Original Notes into the Exchange Agent’s account at DTC) and a Letter of Transmittal (or facsimile thereof) with respect to such Original Notes properly completed and duly executed, with any required signature guarantees and any other documents required by the Letter of Transmittal or a properly transmitted Agent’s Message.

All authority conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall not be affected by, and shall survive, the death or incapacity of the undersigned, and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned.

-2-

PLEASE SIGN AND COMPLETE

Signature(s) of registered Holder(s) or	Date:
authorized signatory:
	Address:
Name(s) of registered Holder(s):
	Area Code and Telephone No.
	If Original Notes will be delivered by book-entry
	transfer to DTC, check the box below and insert DTC
	Account Number:
Principal Amount of Original Notes Tendered*:	¨
	DTC Account No.:
	*Must be in denominations of principal amount of
Certificate No.(s) of Original Notes	$1,000 or any integral multiple thereof.
(if available)

This Notice of Guaranteed Delivery must be signed by the Holder(s) of Original Notes exactly as their (its) name(s) appear on certificate(s) for Original Notes, or if tendered by a participant in DTC, exactly as such participant’s name appears on a security position listing as the owner of Original Notes, or by person(s) authorized to become Holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information:

Please print name(s) and address(es)

Name (s):                                                                                                                                                                                                                                                    

Capacity:                                                                                                                                                                                                                                                     

Address (es):                                                                                                                                                                                                                                             

NOTE: DO NOT SEND ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

-3-

GUARANTEE

(Not to be used for Signature Guarantee)

The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an “eligible guarantor institution,” including (as such terms are defined therein): (1) a bank; (2) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker, government securities dealer; (3) a credit union; (4) a national securities exchange, registered securities association or clearing agency; or (5) a savings association (each of the foregoing being referred to as an “Eligible Institution”), hereby (a) represents that each holder of Original Notes on whose behalf this tender is being made “own(s)” the Original Notes covered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended (“Rule 14e-4”), (b) represents that such tender of Original Notes complies with Rule 14e-4, and (c) guarantees that, The Original Notes tendered hereby in proper form for transfer (pursuant to the procedures set forth in the Prospectus under the caption “The Exchange Offer—Procedures for Tendering Notes—Guaranteed Delivery”), together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantee and any other documents required by the Letter of Transmittal or a properly transmitted Agent’s Message, will be received by the Exchange Agent at one of its addresses set forth above within two business days after the date of execution hereof.

The Eligible Institution that completes this form must communicate the guarantee to the Exchange Agent and must deliver the Letter of Transmittal, or Agent’s Message, and Original Notes to the Exchange Agent within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm:                                                                                                                                                                                                                                          

Authorized Signature:                                                                                                                                                                                                                            

Title:                                                                                                                                                                                                                                                             

Address:                                                                                                                                                                                                                                                      

(Zip Code)

Area Code and Telephone Number:                                                                                                                                                                                                 

Dated: __________________

NOTE: DO NOT SEND ORIGINAL NOTES WITH THIS FORM. ORIGINAL NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

-4-

EX-99.2

Exhibit 99.2

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Payer. The taxpayer identification number for an individual is the individual’s Social Security number. Social Security numbers have nine digits separated by two hyphens: e.g., 000-00-0000. The taxpayer identification number for an entity is the entity’s Employer Identification number. Employer Identification numbers have nine digits separated by one hyphen: e.g., 00-0000000. The table below will help determine the number to give the payer.

For this type of account:		Give the NAME and SOCIAL SECURITY number of-	For this type of account:		Give the NAME and EMPLOYER IDENTIFICATION number of-
1.	Individual	The individual	6.	A valid trust, estate or pension trust	The legal entity (4)
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account (1)	7.	Corporate	The corporation
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor (2)	8.	Association, club, religious, charitable, educational or other tax-exempt organization	The organization
4.	a. The usual revocable savings trust (grantor is also trustee)	The grantor-trustee (1)	9.	Partnership	The partnership
	b. So-called trust account that is not a legal or valid trust under state law	The actual owner (1)	10.	A broker or registered nominee	The broker or nominee
5.	Sole proprietorship	The owner (3)	11.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(1) List first and circle the name of the person whose number your furnish.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your SSN or TIN (if you have one).

(4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 2

Section references are to the Internal Revenue Code.

Obtaining a Number

If you do not have a taxpayer identification number or you don’t know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the “IRS”) and apply for a number.

In some cases, individuals who become U.S. resident aliens for tax purposes, are not eligible to obtain an SSN. This includes certain resident aliens who must receive information returns but who cannot obtain an SSN. These individuals must apply for an Individual Taxpayer Identification Number (“ITIN”) on Form W-7, Application for IRS Individual Taxpayer Identification Number, unless they have an application pending for an SSN. Individuals who have an ITIN must provide it on Form W-9.

To complete the Substitute Form W-9, if you do not have a taxpayer identification number, write “Applied For” in the space for the taxpayer identification number in Part 1, sign and date the Form, and give it to the requester. If the requester does not receive your taxpayer identification number within 60 days, backup withholding, if applicable, will begin and will continue until you furnish your taxpayer identification number to the requester.

Payees Exempt from Backup Withholding

The following is a list of payees that are or may be exempt from backup withholding and for which no information reporting is required. For interest and dividends, all listed payees are exempt except item (9). For broker transactions, payees listed in (1) through (13) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (7), except that a corporation that provides medical and health care services or bills and collects payments for such services is not exempt from backup withholding or information reporting. Only payees described in items (1) through (5) are exempt from backup withholding for barter exchange transactions, patronage dividends and payments by certain fishing boat operators.

(1) An organization exempt from tax under section 501(a), or an individual retirement plan (“IRA”), or a custodial account under 403(b)(7), if the account satisfies the requirements of section 401(f)(2).

(2) The United States or any of its agencies or instrumentalities.

(3) A State, the District of Columbia, a possession of the United States or any of their political subdivisions or instrumentalities.

(4) A foreign government or any of its political subdivisions, agencies or instrumentalities.

(5) An international organization or any of its agencies or instrumentalities.

(6) A corporation.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the United States, the District of Columbia or a possession of the United States.

(9) A futures commission merchant registered with the Commodity Futures Trading Commission.

(10) A real estate investment trust.

(11) An entity registered at all times during the tax year under the Investment Company Act of 1940.

(12) A common trust fund operated by a bank under section 584(a).

(13) A financial institution.

(14) A middleman known in the investment community as a nominee or custodian.

(15) A trust exempt from tax under section 664 or described in section 4947.

Payments of dividends and patronage dividends generally not subject to backup withholding also include the following:

• Payments to nonresident aliens subject to withholding under section 1441.

• Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident partner.

• Payments of patronage dividends not paid in money.

• Payments made by certain foreign organizations.

• Section 404(k) distributions made by an ESOP.

Payments of interest generally not subject to backup withholding include the following:

• Payments of interest on obligations issued by individuals.

Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct taxpayer identification number to the payer.

• Payments of tax-exempt interest (including exempt interest dividends under section 852).

• Payments described in section 6049(b)(5) to nonresident aliens.

• Payments on tax-free covenant bonds under section 1451.

• Payments made by certain foreign organizations.

• Mortgage interest paid by you.

Payments that are not subject to information reporting are also not subject to backup withholding. For details see sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N and the regulations under such sections.

Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. ENTER YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE “EXEMPT” ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Privacy Act Notices

Section 6109 requires you to give your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt or contributions you made to an IRA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice of civil and criminal litigation and to cities, states and the District of Columbia to carry out their tax laws. You must provide your taxpayer identification number whether or not you are qualified to file a tax return. Payers must generally withhold 30% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number. If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information

Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.