Exhibit 10.3

EXECUTION COPY

RYERSON CANADA, INC.

as Grantor

- and -

BANK OF AMERICA, N.A.

as Collateral Agent

 

 

CANADIAN SECURITY AGREEMENT

 

 

Dated as of July 24, 2015

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CANADIAN SECURITY AGREEMENT

Canadian Security Agreement dated as of July 24, 2015 between Ryerson Canada,
Inc. (the “Grantor”) and Bank of America, N.A., in its capacity as Collateral
Agent (in such capacity together with any successor in such capacity, the
Collateral Agent).

WHEREAS the Lenders and the other Secured Creditors have agreed to make Loans
and certain other accommodations available to the Grantor upon the terms and
conditions contained in a credit agreement among, inter alios, the Grantor, as
Canadian Borrower, Ryerson Holding Corporation and Joseph T. Ryerson & Son,
Inc., as U.S. Borrowers, the financial institutions party thereto, and the
Collateral Agent dated as of the date hereof (such credit agreement as it may at
any time or from time to time, be amended, supplemented, restated or replaced,
the Credit Agreement);

AND WHEREAS the Grantor has agreed to execute and deliver this Agreement to and
in favour of the Collateral Agent for the benefit of the Secured Creditors as
security for the payment and performance of the Grantor’s obligations to the
Collateral Agent and the other Secured Creditors under or in connection with the
Credit Agreement and the other Credit Documents to which the Grantor is a party;

NOW THEREFORE, in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
the parties, the parties agree as follows:

ARTICLE 1

SECURITY

Section 1.01 Terms Incorporated by Reference.

Agreement means this Canadian security agreement, including the exhibits and
recitals to this agreement, as it or they may be amended, supplemented, restated
or replaced from time to time, and the expressions hereof, herein, hereto,
hereunder, hereby and similar expressions refer to this Agreement and not to any
particular section or other portion of this Agreement.

Capitalized terms used in this Agreement and not otherwise defined shall have
the respective meanings attributed to them in the Credit Agreement. Terms
defined in the Personal Property Security Act (Ontario) (as amended from time to
time (the PPSA )) and used in this Agreement have the same meaning.

Any reference to the STA is a reference to the Securities Transfer Act, 2006
(Ontario) or, to the extent applicable, similar legislation of any other
jurisdiction, as amended from time to time.

The Collateral Agent and each Secured Creditor agree that the Perfection
Certificate and all descriptions of Collateral, schedules, amendments and
supplements thereto are and shall at all times remain a part of this Agreement.
For the purposes hereof, Perfection Certificate shall mean that certain
perfection certificate dated on or about the date hereof executed and delivered
by, inter alios, the Grantor in favour of the Collateral Agent for the benefit
of the Secured Creditors.

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Section 1.02 Grant of Security.

Subject to Section 1.05, as collateral security for the payment and performance
in full of its Secured Obligations (as hereinafter defined), the Grantor hereby
pledges and grants to the Collateral Agent for the benefit of the Secured
Creditors, a lien on and security interest in all of its right, title and
interest in, to and under the following property, wherever located, and whether
now existing or hereafter arising or acquired from time to time (collectively,
the Collateral):

 

  (i) (a) all accounts and (b) other rights to payment for inventory or related
services to the extent evidenced by chattel paper or instruments;

 

  (ii) all inventory or documents of title for any inventory;

 

  (iii) all money and all deposit accounts;

 

  (iv) all intangibles pertaining to the items referred to in clauses
(i) through (iii) above, including, without limitation, all contingent rights
with respect to warranties on inventory or accounts;

 

  (v) all records, supporting obligations and related Letters of Credit and
rights under Letters of Credit, pertaining to the items referred to in clauses
(i) through (iv) above, commercial tort claims or other claims and causes of
action, in each case, pertaining to the items referred to in clauses (i) through
(iv) above;

 

  (vi) all books and records relating to the Collateral referred to in clauses
(i) through (v) above; and

 

  (vii) substitutions, replacements, accessions, products and proceeds
(including, without limitation, insurance proceeds, licenses, royalties, income,
payments, claims, damages and proceeds of suit) of any or all of the foregoing,
only to the extent any of the foregoing would constitute property of the type
described in clauses (i) through (vi) above.

Notwithstanding anything to the contrary in clauses (i) through (vii) above, the
security interest created by this Agreement shall not extend to, and the term
“Collateral” shall not include, (a) any Excluded Assets (as defined below) and
(b) all money, cash, Cash Equivalents, securities or other property to the
extent not constituting proceeds of clauses (i)(a) or (ii) unless such amounts
are included in the Canadian Borrowing Base.

Section 1.03 Obligations Secured.

(1) The security interest granted hereby (the Security Interest) secures the
payment and performance of all of the Obligations of the Grantor (collectively,
the Secured Obligations).

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Section 1.04 Attachment.

(1) The Grantor acknowledges that (i) value has been given, (ii) it has rights
in the Collateral (other than after-acquired Collateral) or the power to
transfer rights in the Collateral (other than after-acquired Collateral) to the
Collateral Agent, (iii) it has not agreed to postpone the time of attachment of
the Security Interest, and (iv) it has received a duplicate original copy of
this Agreement.

Section 1.05 Scope of Security Interest.

(1) Notwithstanding anything to the contrary contained in Section 1.02, the
Security Interest created hereunder shall not extend to, and the term
“Collateral” shall not include, the following assets (collectively, the Excluded
Assets and each, an Excluded Asset):

(a) any permit, license, contract or other asset issued by a Governmental
Authority to the Grantor or any contract or other agreement to which the Grantor
is a party, in each case, only to the extent and for so long as the terms of
such permit, license, contract or other asset issued by a Governmental Authority
to the Grantor of such contract or other agreement or any provision of law
applicable thereto, validly prohibit the creation by the Grantor of a security
interest in such permit, license or agreement in favour of the Collateral Agent
(after giving effect to the PPSA, any other applicable law (including the
Bankruptcy and Insolvency Act (Canada)) or principles of equity); and

(b) all accounts resulting from the sale or disposition of all property of the
Grantor other than the Collateral and all supporting obligations and books and
records relating thereto,

provided, however, that Excluded Assets shall not include any proceeds,
substitutions or replacements of any Excluded Assets referred to in clauses
(a) through (b) (unless such proceeds, substitutions or replacements would
constitute an Excluded Asset referred to in clauses (a) through (b).

(2) The Security Interest shall not extend to consumer goods.

(3) The Security Interest shall not extend or apply to the last day of the term
of any lease or sublease or any agreement for a lease or sublease, now held or
hereafter acquired by the Grantor in respect of real property, but the Grantor
shall stand possessed of any such last day upon trust to assign and dispose of
it as the Collateral Agent may direct.

Section 1.06 Care and Custody of Collateral.

(1) The Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if such
Collateral is treated substantially equivalent to that which the Collateral
Agent, its individual capacity, accords its own property consisting of similar
instruments, it being understood that neither the Collateral Agent nor any of
the Secured Creditors shall have responsibility for taking any necessary steps
to preserve rights against any person with respect to any Collateral.

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(2) The Collateral Agent may, after the Security Interest shall have become
enforceable, (i) notify any person obligated on an account or on chattel paper
or any obligor on an instrument to make payments to the Collateral Agent whether
or not the Grantor was previously making collections on such accounts, chattel
paper or instruments, and (ii) assume control of any proceeds arising from the
Collateral.

Section 1.07 Perfection; Other Actions

(1) Financing Statements and Other Filings; Maintenance of Perfected Security
Interest. The Grantor represents and warrants that all financing statements,
agreements, instruments and other documents necessary to perfect the Security
Interest granted by it to the Collateral Agent in respect of the Collateral have
been delivered to the Collateral Agent in completed and, to the extent necessary
or appropriate, duly executed form for filing in each governmental, municipal or
other office specified in Schedule 6 to the Perfection Certificate. The Grantor
agrees that at the sole cost and expense of the Grantor, the Grantor will
maintain the Security Interest created hereunder in the Collateral as a
perfected first priority security interest to the extent required by this
Agreement subject only to Permitted Liens. Notwithstanding anything contained
herein to the contrary, perfection of the Collateral Agent’s security interest
in money shall not be required other than to the extent it is (i) perfected as
proceeds of collateral or (ii) deposited in a deposit account subject to a
Deposit Account Control Agreement of the Collateral Agent.

(2) Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the Collateral
Agent’s Security Interest in the Collateral, the Grantor represents and warrants
as follows and agrees, at the Grantor’s own expense, to take the following
actions with respect to the following Collateral:

 

  (a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts
payable under or in connection with any of the Collateral are evidenced by any
instrument or tangible chattel paper in excess of US$5,000,000 individually or
US$10,000,000 in the aggregate for the Grantor and all Canadian Subsidiary
Guarantors, other than such instruments and tangible chattel paper listed in
Schedule 4 to the Perfection Certificate. Each instrument and each item of
tangible chattel paper evidencing any of the Collateral listed in Schedule 4 to
the Perfection Certificate has been properly endorsed, assigned and delivered to
the Collateral Agent, accompanied by instruments of transfer or assignment duly
executed in blank. If any amount then payable under or in connection with any of
the Collateral shall be evidenced by any instrument or tangible chattel paper,
and such amount, together with all amounts payable evidenced by any instrument
or tangible chattel paper evidencing any of the Collateral not previously
delivered to the Collateral Agent exceeds US$5,000,000 individually or
US$10,000,000 in the aggregate for the Grantor and all Canadian Subsidiary
Guarantors, the Grantor acquiring such instrument or tangible chattel paper
shall, on the later of (i) the date of delivery of quarterly financial
statements pursuant to Section 9.01(a) of the Credit Agreement, (ii) forty-five
(45) days after the acquisition of the applicable after-acquired Collateral or
occurrence of applicable change and (iii) a date agreed to in the sole
discretion of the Collateral Agent (the Quarterly Update Date) following the
receipt thereof by the Grantor endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time specify.

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  (b) Deposit Accounts. As of the date hereof, the Grantor does not have any
deposit accounts other than the accounts listed in Schedule 8 to the Perfection
Certificate. The Collateral Agent has a first priority security interest in each
such deposit account subject as to priority only to Permitted Liens. The Grantor
shall not hereafter establish and maintain any deposit account (other than
Excluded Deposit Accounts) unless (1) it shall give the Collateral Agent prompt
written notice that such new deposit account has been established with a bank
and (2) such bank, the Grantor and the Collateral Agent shall within forty-five
(45) days of the date of acquisition of such deposit account have duly executed
and delivered to the Collateral Agent a Deposit Account Control Agreement or a
blocked account agreement with respect to such deposit account, such time to be
extended in the Collateral Agent’s reasonable sole discretion. The Collateral
Agent agrees with the Grantor that the Collateral Agent shall not give any
instructions directing the disposition of funds from time to time credited to
any deposit account or withhold any withdrawal rights from the Grantor with
respect to funds from time to time credited to any deposit account unless during
a Liquidity Period. The provisions of this Section 1.07(2)(b) shall not apply to
Excluded Deposit Accounts. The Grantor shall not grant control of any deposit
account to any person other than the Collateral Agent and the Notes Collateral
Agent.

 

  (c) Electronic Chattel Paper and Transferable Records. As of the date hereof,
no amount under or in connection with any of the Collateral is evidenced by any
electronic chattel paper other than such electronic chattel paper and
transferable records listed in Schedule 10 to the Perfection Certificate. If any
amount payable under or in connection with any of the Collateral shall be
evidenced by any electronic chattel paper or transferable record, the Grantor
shall on or before the first Quarterly Update Date following the receipt thereof
by the Grantor notify the Collateral Agent thereof and shall take such action as
the Collateral Agent may reasonably request to vest in the Collateral Agent
control of such electronic chattel paper or transferable record under the PPSA.
The requirement in the preceding sentence shall not apply to the extent that
such amount, together with all amounts payable evidenced by electronic chattel
paper or transferable record in which the Collateral Agent has not been vested
control, does not exceed US$5,000,000 individually or US$10,000,000 in the
aggregate for the Grantor and all Canadian Subsidiary Guarantors. The Collateral
Agent agrees with the Grantor that the Collateral Agent will arrange, pursuant
to procedures satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent’s loss of Control, for the
Grantor to make alterations to the electronic chattel paper or transferable
record permitted under the PPSA or STA for a party in control to allow without
loss of control, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by the Grantor with respect to
such electronic chattel paper or transferable record.

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  (d) Letter-of-Credit Rights. If the Grantor is at any time a beneficiary under
a letter of credit relating to the Collateral now or hereafter issued, the
Grantor shall on or before the first Quarterly Update Date following the receipt
thereof by the Grantor notify the Collateral Agent thereof and the Grantor
shall, at the request of the Collateral Agent, pursuant to an agreement in form
and substance reasonably satisfactory to the Collateral Agent, use commercially
reasonable efforts to either (i) arrange for the issuer and any confirmer of
such letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under the letter of credit relating to the Collateral or
(ii) arrange for the Collateral Agent to become the transferee beneficiary of
such letter of credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the letter of credit are to be applied as
provided in the Credit Agreement. The actions in the preceding sentence shall
not be required to the extent (x) any such letter of credit is a supporting
obligation of other Collateral or (y) that the amount of any such letter of
credit, together with the aggregate amount of all other letters of credit
relating to the Collateral for which the actions described above in clause
(i) and (ii) have not been taken, does not exceed US$5,000,000 individually or
US$10,000,000 in the aggregate for the Grantor and all Canadian Subsidiary
Guarantors.

 

  (e) Commercial Tort Claims. As of the date hereof, the Grantor hereby
represents and warrants that it holds no commercial tort claims other than those
listed in Schedule A hereto. If the Grantor shall at any time hold or acquire a
commercial tort claim relating to the Collateral, the Grantor shall on or before
the first Quarterly Update Date thereafter, notify the Collateral Agent in
writing signed by the Grantor of the brief details thereof and grant to the
Collateral Agent in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent. The requirement
in the preceding sentence shall not apply to the extent that the amount of such
commercial tort claim, together with the amount of all other commercial tort
claims relating to the Collateral held by the Grantor and the Canadian
Subsidiary Guarantors in which the Collateral Agent does not have a security
interest, does not exceed US$10,000,000 in the aggregate for the Grantor and all
Canadian Subsidiary Guarantors.

Section 1.08 Representations and Covenants.

The Grantor represents and warrants to the Collateral Agent, acknowledging and
confirming that the Collateral Agent is relying thereon without independent
inquiry, that:

(1) Title. Except for the security interest granted to the Collateral Agent for
the benefit of the Secured Creditors pursuant to this Agreement and Permitted
Liens, the Grantor owns and has rights and, as to Collateral acquired by it from
time to time after the date hereof, will own and have rights in each item of
Collateral pledged by it hereunder, free and clear of any and all Liens or
claims of others.

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(2) Validity of Security Interest. The Security Interest in and Lien on the
Collateral granted to the Collateral Agent for the benefit of the Secured
Creditors hereunder constitutes (a) a legal and valid security interest in all
the Collateral securing the payment and performance of the Secured Obligations,
and (b) subject to the filings and other actions described in Schedule 6 to the
Perfection Certificate (to the extent required to be listed on the schedules to
the Perfection Certificate as of the date this representation is made or deemed
made) being duly made, a perfected security interest in all the Collateral,
except as otherwise provided herein. The Security Interest and Lien granted to
the Collateral Agent for the benefit of the Secured Creditors pursuant to this
Agreement in and on the Collateral will at all times to the extent required by
the Credit Documents constitute a perfected, continuing security interest
therein, prior to all other Liens on the Collateral except for Permitted Liens.

(3) Defense of Claims; Transferability of Collateral. The Grantor shall, at its
own cost and expense, defend title to the Collateral pledged by it hereunder and
the security interest therein and Lien thereon granted to the Collateral Agent
and the priority thereof against all material claims and demands of all persons,
at its own cost and expense, at any time claiming any interest therein adverse
to the Collateral Agent or any other Secured Creditor other than Permitted
Liens. There is no agreement, order, judgment or decree, and the Grantor shall
not enter into any agreement or take any other action, that would restrict the
transferability of any of the Collateral or otherwise impair or conflict with
the Grantor’s obligations or the rights of the Collateral Agent hereunder to the
extent reasonably likely to have a Material Adverse Effect and after giving
effect to the PPSA, any other applicable law (including the Bankruptcy and
Insolvency Act (Canada)) or principles of equity.

(4) Other Financing Statements. The Grantor has not filed, nor authorized any
third party to file (nor will there be), any valid or effective financing
statement (or similar statement, instrument of registration or public notice
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Collateral, except such as have been filed in favour of the
Collateral Agent pursuant to this Agreement or in favour of any holder of a
Permitted Lien with respect to such Permitted Lien or financing statements or
public notices relating to the termination statements listed on Schedule 7 to
the Perfection Certificate. The Grantor shall not execute, authorize or permit
to be filed in any public office any financing statement (or similar statement,
instrument of registration or public notice under the law of any jurisdiction)
relating to any Collateral, except financing statements and other statements and
instruments filed or to be filed in respect of and covering the security
interests granted by the Grantor to the Collateral Agent and the holders of the
Permitted Liens.

(5) Consents. In the event that the Collateral Agent desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in
this Agreement and determines it necessary to obtain any approvals or consents
of any Governmental Authority or any other person therefor, then, upon the
reasonable request of the Collateral Agent, the Grantor agrees to use its best
efforts to assist and aid the Collateral Agent to obtain as soon as practicable
any necessary approvals or consents for the exercise of any such remedies,
rights and powers.

(6) Collateral. All information set forth herein, including the schedules
hereto, and all information contained in any documents, schedules and lists
heretofore delivered to any Secured Creditor, including the Perfection
Certificate and the schedules thereto, in connection with this Agreement, in
each case, relating to the Collateral, is accurate and complete in all material
respects.

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(7) Insurance. In the event that the proceeds of any insurance claim with
respect to any of the Collateral are paid to the Grantor after the Collateral
Agent has exercised its right to foreclose after an Event of Default, such net
cash proceeds shall be held in trust for the benefit of the Collateral Agent and
immediately after receipt thereof shall be paid to the Collateral Agent and for
application in accordance with the Credit Agreement.

(8) Chief Executive Office; Change of Name; Jurisdiction of Organization. The
Grantor will not effect any change (i) to its legal name, (ii) in its identity
or organizational structure, or (iii) in its jurisdiction of (a) organization
(in each case, including by merging or amalgamating with or into any other
entity, reorganizing, dissolving, liquidating, reorganizing or organizing in any
other jurisdiction) or (b) its chief executive office or registered office,
unless (A) it shall have given the Collateral Agent promptly but in any event
within thirty (30) days after such change, written notice clearly describing
such change and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (B) it shall have taken or will
promptly take all action necessary to maintain the perfection and priority of
the Security Interest of the Collateral Agent for the benefit of the Secured
Creditors in the Collateral. The Collateral Agent shall have no duty to inquire
about any of the changes described in clauses (i) through (iii) inclusively, the
parties acknowledging and agreeing that the Grantor is solely responsible to
take all action described in Section 1.08(9)(B) above.

(9) Transfer of Collateral. The Grantor shall not sell, convey, assign or
otherwise dispose of, or grant any option with respect to, any of the Collateral
pledged or charged by it hereunder except as permitted by the Credit Agreement.

(10) Ryerson Canada International LP. The Grantor is a subsidiary of Ryerson
Canada International LP (RCI LP) which has no Collateral. RCI LP is strictly a
holding company and will not engage in any business other than its ownership of
the capital stock of the Grantor and management of, the Grantor and, indirectly
the Grantor’s Subsidiaries and activities incidental thereto. RCI LP is an
Unrestricted Subsidiary and to the extent it becomes a Restricted Subsidiary the
Grantor will cause RCI LP to take all actions necessary to be in compliance with
all requirements under section 9.12 of the Credit Agreement.

ARTICLE 2

ENFORCEMENT

Section 2.01 Enforcement.

(1) The Security Interest shall be and become enforceable against the Grantor
upon the occurrence and during the continuance of an Event of Default.

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Section 2.02 Remedies.

Whenever the Security Interest has become enforceable, the Collateral Agent, for
the benefit of the Secured Creditors, may realize upon the Collateral and
enforce the rights of the Collateral Agent by:

 

  (a) entry onto any premises where the Collateral consisting of tangible
personal property may be located;

 

  (b) entry into possession of the Collateral by any method permitted by law;

 

  (c) sale or lease of all or any part of the Collateral;

 

  (d) collection of any proceeds arising in respect of the Collateral;

 

  (e) collection, realization or sale of, or other dealing with, the accounts;

 

  (f) appointment by instrument in writing of a receiver (which term as used in
this Agreement includes a receiver and manager) or agent of all or any part of
the Collateral and removal or replacement from time to time of any receiver or
agent;

 

  (g) institution of proceedings in any court of competent jurisdiction for the
appointment of a receiver of all or any part of the Collateral;

 

  (h) institution of proceedings in any court of competent jurisdiction for sale
or foreclosure of all or any part of the Collateral;

 

  (i) filing of proofs of claim and other documents to establish claims to the
Collateral in any proceeding relating to the Grantor; and

 

  (j) any other remedy or proceeding authorized or permitted under the PPSA or
otherwise by law or equity.

Such remedies may be exercised from time to time separately or in combination
and are in addition to, and not in substitution for, any other rights of the
Collateral Agent however created. The Collateral Agent shall not be bound to
exercise any right or remedy, and the exercise of rights and remedies shall be
without prejudice to any other rights of the Collateral Agent in respect of the
Secured Obligations including the right to claim for any deficiency. The taking
of any action or proceeding or refraining from doing so, or any other dealings
with any other security for the Secured Obligations secured by this Agreement
shall not release or affect the Collateral or the Security Interest.

Section 2.03 Additional Rights.

In addition to the remedies set forth in Section 2.02, the Collateral Agent, for
the benefit of the Secured Parties, may, whenever the Security Interest has
become enforceable:

 

  (a) require the Grantor, at the Grantor’s expense, to assemble the Collateral
at a place or places designated by notice in writing and the Grantor agrees to
so assemble the Collateral;

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  (b) require the Grantor, by notice in writing, to disclose to the Collateral
Agent the location or locations of the Collateral and the Grantor agrees to make
such disclosure when so required;

 

  (c) repair, process, modify, complete or otherwise deal with the Collateral
and prepare for the disposition of the Collateral, whether on the premises of
the Grantor or otherwise;

 

  (d) carry on all or any part of the business of the Grantor and, to the
exclusion of all others including the Grantor, enter upon, occupy and use all or
any of the premises, buildings, and other property of or used by the Grantor for
such time as the Collateral Agent sees fit, free of charge, and the Collateral
Agent shall not be liable to the Grantor for any act, omission or negligence in
so doing or for any rent, charges, depreciation or damages incurred in
connection with or resulting from such action;

 

  (e) borrow for the purpose of carrying on the business of the Grantor or for
the maintenance, preservation or protection of the Collateral and mortgage,
grant or charge a security interest in the Collateral, whether or not in
priority to the Security Interest, to secure repayment; and

 

  (f) commence, continue or defend any judicial or administrative proceedings
for the purpose of protecting, seizing, collecting, realizing or obtaining
possession or payment of the Collateral, and give good and valid receipts and
discharges in respect of the Collateral and compromise or give time for the
payment or performance of all or any part of the accounts or any other
obligation of any third party to the Grantor.

Section 2.04 Concerning the Receiver.

(1) Any receiver appointed by the Collateral Agent shall be vested with the
rights and remedies which could have been exercised by the Collateral Agent in
respect of the Grantor or the Collateral and such other powers and discretions
as are granted in the instrument of appointment and any supplemental
instruments. The identity of the receiver, its replacement and its remuneration
shall be within the sole and unfettered discretion of the Collateral Agent.

(2) Any receiver appointed by the Collateral Agent shall act as agent for the
Collateral Agent for the purposes of taking possession of the Collateral, but
otherwise and for all other purposes (except as provided below), as agent for
the Grantor. The receiver may sell, lease, or otherwise dispose of Collateral as
agent for the Grantor or as agent for the Collateral Agent as the Collateral
Agent may determine in its discretion. The Grantor agrees to ratify and confirm
all actions of the receiver acting as agent for the Grantor, and to release and
indemnify the receiver in respect of all such actions.

(3) The Collateral Agent, in appointing or refraining from appointing any
receiver, shall not incur liability to the receiver, the Grantor or otherwise
and shall not be responsible for any misconduct or negligence of such receiver.

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Section 2.05 Appointment of Attorney.

The Grantor irrevocably appoints the Collateral Agent (and any of its officers)
as attorney of the Grantor (with full power of substitution), whenever the
Security Interest has become enforceable, to do, make and execute, in the name
of and on behalf of the Grantor, all such further acts, documents, matters and
things which the Collateral Agent may deem necessary or advisable to accomplish
the purposes of this Agreement including the execution, endorsement and delivery
of documents and any notices, receipts, assignments or verifications of the
accounts and the delivery and transfer of any Collateral to the Collateral Agent
to its nominees or transferees. The powers of attorney herein granted is in
addition to, and not in substitution for any transfer power of attorney
delivered by the Grantor and such power of attorney may be relied upon by the
Collateral Agent severally or in combination. All acts of the attorney are
ratified and approved, and the attorney shall not be liable for any act, failure
to act or any other matter or thing, except for its own gross negligence or
wilful misconduct.

Section 2.06 Dealing with the Collateral.

(1) The Collateral Agent shall not be obliged to exhaust its recourse against
the Grantor or any other Person or against any other security it may hold in
respect of the Secured Obligations before realizing upon or otherwise dealing
with the Collateral in such manner as the Collateral Agent may consider
desirable.

(2) The Collateral Agent may grant extensions or other indulgences, take and
give up securities, accept compositions, grant releases and discharges and
otherwise deal with the Grantor and with other Persons, sureties or securities
as it may see fit without prejudice to the Secured Obligations, the liability of
the Grantor or the rights of the Collateral Agent in respect of the Collateral.

(3) The Collateral Agent shall not be (i) liable or accountable for any failure
to collect, realize or obtain payment in respect of the Collateral, (ii) bound
to institute proceedings for the purpose of collecting, enforcing, realizing or
obtaining payment of the Collateral or for the purpose of preserving any rights
of any Persons in respect of the Collateral, (iii) responsible for any loss
occasioned by any sale or other dealing with the Collateral or by the retention
of or failure to sell or otherwise deal with the Collateral, or (iv) bound to
protect the Collateral from depreciating in value or becoming worthless.

Section 2.07 Standards of Sale.

Without prejudice to the ability of the Collateral Agent to dispose of the
Collateral in any manner which is commercially reasonable, the Grantor
acknowledges that a disposition of Collateral by the Collateral Agent which
takes place substantially in accordance with the following provisions shall be
deemed to be commercially reasonable:

 

  (a) the Collateral may be disposed of in whole or in part;

 

  (b) the Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other formality;

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  (c) any assignee of such Collateral may be the Collateral Agent or a customer
of the Collateral Agent;

 

  (d) any sale conducted by the Collateral Agent shall be at such time and
place, on such notice and in accordance with such procedures as the Collateral
Agent, in its sole discretion, may deem advantageous;

 

  (e) a disposition of Collateral may be on such terms and conditions as to
credit or otherwise as the Collateral Agent, in its sole discretion, may deem
advantageous; and

 

  (f) the Collateral Agent may establish an upset or reserve bid or price in
respect of any Collateral.

Section 2.08 Application of Proceeds.

The proceeds received by the Collateral Agent in respect of any sale of,
collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Collateral Agent of its remedies shall be
applied, together with any other sums then held by the Collateral Agent pursuant
to this Agreement, in accordance with the Credit Agreement.

Section 2.09 Dealings by Third Parties.

(1) No Person dealing with the Collateral Agent or an agent or receiver shall be
required to determine (i) whether the Security Interest has become enforceable,
(ii) whether the powers which such Person is purporting to exercise have become
exercisable, (iii) whether any money remains due to the Collateral Agent by the
Grantor, (iv) the necessity or expediency of the stipulations and conditions
subject to which any sale or lease is made, (v) the propriety or regularity of
any sale or other dealing by the Collateral Agent with the Collateral, or
(vi) how any money paid to the Collateral Agent has been applied.

ARTICLE 3

GENERAL

Section 3.01 Notices, etc.

Any notice, direction, demand or other communication required or permitted to be
given under this Agreement shall be given in the same manner as provided in the
Credit Agreement.

Section 3.02 Discharge.

When all the Secured Obligations have been paid in full (other than
(i) contingent indemnification obligations and expense reimbursement obligations
not yet due and payable and (ii) Secured Bank Product Obligations not due and
payable) and no commitments remain under the Credit Agreement, this Agreement
shall terminate. Upon termination of this Agreement the Collateral shall be
released from the Lien of this Agreement. In addition, the Collateral or any
portion thereof shall be released from the Lien of this Agreement pursuant to
the Credit Agreement. Upon such release, the Collateral Agent shall, upon the
request and at the sole cost and expense of the Grantor, assign, transfer and
deliver to the Grantor, against receipt and

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without recourse to or warranty by the Collateral Agent except as to the fact
that the Collateral Agent has not encumbered the released assets, such of the
Collateral or any part thereof to be released (in the case of a release) as may
be in possession of the Collateral Agent and as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, with respect to any other
Collateral proper documents and instruments (including termination financing
statements or releases, terminations of deposit account control agreements
acknowledging the termination hereof or the release of such Collateral as the
case may be).

Section 3.03 No Merger.

This Agreement shall not operate by way of merger of any of the Secured
Obligations and no judgment recovered by the Collateral Agent shall operate by
way of merger of, or in any way affect, the Security Interest, which is in
addition to, and not in substitution for, any other security now or hereafter
held by the Collateral Agent in respect of the Secured Obligations.

Section 3.04 Further Assurances.

The Grantor shall take such further actions, and execute and/or deliver to the
Collateral Agent such additional financing statements, amendments, assignments,
agreements, supplements, powers and instruments, as the Collateral Agent may in
its reasonable judgment deem necessary or appropriate in order to create,
perfect, preserve and protect the Security Interest in the Collateral as
provided herein and the rights and interests granted to the Collateral Agent
hereunder, to carry into effect the purposes hereof or better to assure and
confirm the validity, enforceability and priority of the Collateral Agent’s
Security Interest in the Collateral or permit the Collateral Agent to exercise
and enforce its rights, powers and remedies hereunder with respect to any
Collateral, including the filing of financing statements, continuation
statements and other documents (including this Agreement) under the PPSA or
other similar laws in effect in any jurisdiction with respect to the Security
Interest created hereby and the execution and delivery of deposit account
control agreements, all in form reasonably satisfactory to the Collateral Agent
and in such offices wherever required by law to perfect, continue and maintain
the validity, enforceability and priority of the security interest in the
Collateral as provided herein and to preserve the other rights and interests
granted to the Collateral Agent hereunder, as against third parties, with
respect to the Collateral. Without limiting the generality of the foregoing, the
Grantor shall make, execute, endorse, acknowledge, file or refile and/or deliver
to the Collateral Agent from time to time upon reasonable request by the
Collateral Agent such lists, schedules, descriptions and designations of the
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional Agreements, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments as the Collateral Agent shall
reasonably request. Notwithstanding the foregoing or anything to the contrary
contained herein, in no event will any actions be required to be taken under the
laws of any jurisdiction other than the federal law of Canada or the laws of any
province or territory located within Canada. If an Event of Default has occurred
and is continuing, the Collateral Agent may institute and maintain, in its own
name or in the name of the Grantor, such suits and proceedings as the Collateral
Agent may be advised by counsel shall be necessary or expedient to prevent any
impairment of the Security Interest in or the perfection thereof in the
Collateral. All of the foregoing shall be at the sole cost and expense of the
Grantor.

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Section 3.05 Supplemental Security.

This Agreement is in addition to and without prejudice to all other security now
held or which may hereafter be held by the Collateral Agent.

Section 3.06 Successors and Assigns.

This Agreement shall be binding upon the Grantor, its successors and assigns,
and shall enure to the benefit of the Collateral Agent and its successors and
assigns. All rights of the Collateral Agent shall be assignable and in any
action brought by an assignee to enforce any of those rights.

Section 3.07 Headings, etc.

The division of this Agreement into articles, sections and subsections and the
insertion of headings are for convenience of reference only and shall not affect
the meaning or construction of this Agreement.

Section 3.08 Gender and Number.

Any reference in this Agreement to gender shall include all gender and words
importing the singular number only shall include the plural and vice versa.

Section 3.09 Severability.

If any provision of this Agreement shall be deemed by any court of competent
jurisdiction to be invalid or void, the remaining provisions shall remain in
full force and effect.

Section 3.10 Conflict.

In the event of any conflict between the provisions of this Agreement and the
provisions of the Credit Agreement which cannot be resolved by both provisions
being complied with, the provisions contained in the Credit Agreement will
prevail to the extent of such conflict.

Section 3.11 Governing Law.

(1) This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.

(2) The Grantor hereby (i) irrevocably submits to the non-exclusive jurisdiction
of any court sitting in the Province of Ontario over any suit, action or
proceeding arising out of or relating to this Agreement; (ii) irrevocably agrees
that all claims in respect of any suit, action or proceeding may be heard and
determined in such court; and (iii) irrevocably waives, to the fullest extent
permitted by law, any objection which it may have or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. The Grantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other manner provided by law. Nothing in this section shall
affect the right of the Collateral Agent to serve process in any manner
permitted by law or limit the rights of the Collateral Agent to bring
proceedings against the Grantor in the courts of any other jurisdiction.

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(3) The Grantor hereby consents generally in respect of any legal action or
proceedings arising out of or in connection with this Agreement to the giving of
any relief or the issue of any process in connection with such action or
proceedings, including, without limitation, the making, enforcement or execution
against the Grantor of any order or judgment which may be made or given in such
action or proceedings.

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

Section 3.12 Counterparts.

This Agreement may be executed in counterparts (including by way of facsimile)
and all such counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed counterpart of a signature page of
this Agreement by facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.

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

 

 

RYERSON CANADA, INC.,

as Grantor

Per:  

/s/ Robert De Laney

  Name: Robert De Laney   Title: Treasurer  

BANK OF AMERICA, N.A.,

as Agent

Per:  

/s/ Stephen King

  Name: Stephen King   Title: Senior Vice President