Exhibit 10.10

 

EXECUTION COPY

 

 

CANADIAN COLLATERAL AGREEMENT
(INTERCOMPANY NOTES)

 

dated as of

 

November 15, 2007

 

among

 

NOVAMERICAN STEEL INC.

and

 

BNY TRUST COMPANY OF CANADA

 

as Canadian Collateral Agent

 

THIS CANADIAN COLLATERAL AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE LIEN
SUBORDINATION AND INTERCREDITOR AGREEMENT OF EVEN DATE HEREWITH AMONG SYMMETRY
HOLDINGS INC., NOVAMERICAN STEEL FINCO INC., NOVAMERICAN STEEL INC., OTHER
SUBSIDIARIES OF SYMMETRY HOLDINGS INC. IDENTIFIED THEREIN, JPMORGAN CHASE BANK,
N.A., AS ADMINISTRATIVE AGENT, AND THE BANK OF NEW YORK, AS COLLATERAL AGENT
UNDER THE FINANCING DOCUMENTS, AS MORE FULLY SET FORTH IN SECTION 5.15 HEREOF.

 

 

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TABLE OF CONTENTS

 

ARTICLE I Definitions

1

 

 

SECTION 1.01. Terms Generally

1

Other Defined Terms

2

 

 

ARTICLE II Pledge of Securities

9

 

 

SECTION 2.01. Pledge

9

SECTION 2.02. Delivery of the Pledged Collateral

10

SECTION 2.03. Representations, Warranties and Covenants

11

SECTION 2.04. Registration in Nominee Name; Denominations

13

SECTION 2.05. Voting Rights; Dividends and Interest

13

 

 

ARTICLE III Security Interests in Personal Property

15

 

 

SECTION 3.01. Security Interest

15

SECTION 3.02. Representations and Warranties

16

SECTION 3.03. Covenants

17

SECTION 3.04. Other Actions

21

SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral

23

 

 

ARTICLE IV Remedies

24

 

 

SECTION 4.01. Remedies Upon Default

24

SECTION 4.02. Application of Proceeds

27

SECTION 4.03. Grant of License to Use Intellectual Property

27

SECTION 4.04. Securities Act

28

SECTION 4.05. Registration

28

 

 

ARTICLE V Miscellaneous

29

 

 

SECTION 5.01. Notices

29

SECTION 5.02. Waivers; Amendment

30

SECTION 5.03. Canadian Collateral Agent’s Fees and Expenses; Indemnification

30

SECTION 5.04. Successors and Assigns

31

SECTION 5.05. Survival of Agreement

31

SECTION 5.06. Counterparts; Effectiveness; Several Agreement

31

SECTION 5.07. Severability

32

SECTION 5.08. Governing Law; Jurisdiction; Consent to Service of Process

32

SECTION 5.09. Judgment Currency

32

SECTION 5.10. WAIVER OF JURY TRIAL

33

SECTION 5.11. Headings

34

SECTION 5.12. Security Interest Absolute

34

SECTION 5.13. Termination or Release

34

 

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SECTION 5.14. Canadian Collateral Agent Appointed Attorney-in-Fact

34

SECTION 5.15. Intercreditor Agreement

35

SECTION 5.16. Acknowledgments

36

 

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Schedules

 

 

 

 

 

Schedule I

Pledged Equity Interests; Pledged Debt Securities

 

 

 

 

Schedule II

Intellectual Property

 

 

 

 

Exhibits

 

 

 

 

 

Exhibit I

Form of Perfection Certificate

 

Exhibit II

Form of Patent and Trademark Security Agreement

 

Exhibit III

Form of Copyright Security Agreement

 

 

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CANADIAN COLLATERAL AGREEMENT dated as of November 15, 2007, (as amended,
supplemented or otherwise modified from time to time, this “Agreement”), among,
NOVAMERICAN STEEL INC. a Canadian corporation (together with its successors and
permitted assignees, the “Grantor”), and BNY TRUST COMPANY OF CANADA, as
collateral agent for the Secured Parties (in such capacity, the “Canadian
Collateral Agent”).

 

Reference is made to (a) the Indenture dated as of November 15, 2007 (as
amended, supplemented or otherwise modified from time to time, the “Indenture”),
among Symmetry Holdings Inc. (“Symmetry”), Novamerican Steel Finco Inc. (the
“Company”), the Subsidiary Guarantors identified therein and The Bank of New
York, as trustee (in such capacity, the “Trustee”), (b) the Purchase Agreement
dated as of November 15, 2007, (as supplemented by the Joinder Agreement dated
as of November 15, 2007, the “Purchase Agreement”) among Symmetry, the Company,
the Subsidiary Guarantors identified therein and J.P. Morgan Securities Inc. and
CIBC World Markets Corp. as initial purchasers (the “Initial Purchasers”), and
(c) the Intercompany Notes dated as of November 15, 2007, granted by Grantor in
favour of the Company (as amended, supplemented or otherwise modified from time
to time), and each of the other Intercompany Notes referenced in the Indenture
(collectively, the “Intercompany Notes”). The Trustee has agreed to enter into
the Indenture and the Initial Purchasers have agreed to purchase the Initial
Securities of the Company, in each case on the terms and subject to the
conditions set forth in the Indenture and the Purchase Agreement, respectively.
The Company has agreed to advance the Intercompany Loans (as defined in the
Indenture) to Grantor from the proceeds of the Initial Securities and to advance
additional Intercompany Loans from time to time, as evidenced by the
Intercompany Notes. The obligations of the Initial Purchasers to purchase the
Initial Securities and the obligations of the Company to advance the
Intercompany Loans, are conditioned on, among other things, the execution and
delivery by Grantor of this Agreement. Grantor is a Subsidiary of the Company,
will derive substantial benefits from the issuance of the Initial Securities
pursuant to the Indenture and from the making of the Intercompany Loans by the
Company pursuant to the Intercompany Notes and is willing to execute and deliver
this Agreement in order to induce the Initial Purchasers to purchase the Initial
Securities and to induce the Company to make the Intercompany Loans.
Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01. TERMS GENERALLY

 

The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference

 

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to any agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any definition
of or reference to any statute, regulation or other law herein shall be
construed (i) as referring to such statute, regulation or other law as from time
to time amended, supplemented or otherwise modified (including by succession of
comparable successor statutes, regulations or other laws) and (ii) to include
all official rulings and interpretations thereunder having the force of law or
with which affected Persons customarily comply, (c) any reference herein to any
Person shall be construed to include such Person’s successors and assigns, (d)
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, (e) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement, and (f) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

 

OTHER DEFINED TERMS. ALL TERMS DEFINED IN THE PPSA (AS DEFINED BELOW) AND NOT
DEFINED IN THIS AGREEMENT HAVE THE MEANINGS SPECIFIED THEREIN, INCLUDING,
WITHOUT LIMITATION, “ACCESSIONS”, “ACCOUNTS”, “CHATTEL PAPER”, “DOCUMENT OF
TITLE”, “EQUIPMENT”, “GOODS”, “INSTRUMENTS”, “INVENTORY”, “INVESTMENT PROPERTY”,
“MONEY”, “FINANCING STATEMENT”, “FINANCING CHANGE STATEMENT” “FIXTURES” AND
“PROCEEDS”. ALL TERMS DEFINED IN THE STA (AS DEFINED HEREIN) AND NOT DEFINED IN
THIS AGREEMENT HAVE THE MEANINGS SPECIFIED THEREIN, INCLUDING, WITHOUT
LIMITATION, “CERTIFIED SECURITY”, “ENTITLEMENT HOLDER”, “ENTITLEMENT ORDER”,
“FINANCIAL ASSET”, “SECURITIES ACCOUNT”, “SECURITIES INTERMEDIARY”, “SECURITY
ENTITLEMENT” AND “UNCERTIFICATED SECURITY”.

 

As used in this Agreement, the following terms have the meanings specified
below:

 

“ABL Collateral” means any and all of the following:  (a) all Accounts
Receivable and related records; (b) all Chattel Paper; (c) all Deposit Accounts
other than the Intercompany Note Collateral Account; (d) all cash, cheques and
other negotiable instruments, funds and other evidences of payment (excluding
any cash or other assets held in the Intercompany Note Collateral Account in
accordance with the Indenture, as in effect on the date hereof); (e) all
Inventory; (f) to the extent evidencing, governing, securing or otherwise
related to the items referred to in the preceding clauses (a), (b), (c), (d) and
(e), all Documents of Title, Intangibles, Instruments and Investment Property;
(g) all books and records related to the foregoing; (h) all collateral security
and guarantees given by any Person with respect to any of the foregoing; and
(i) all Proceeds, including insurance Proceeds, of any and all of the foregoing.

 

“Account Debtor” means any Person who is or who may become obligated to Grantor
under, with respect to or on account of an Account.

 

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“Accounts Receivable” means all Accounts and other rights to payment, in each
case for the sale of Inventory or the performance of services, existing on the
date of this Agreement or hereafter arising, whether or not earned by
performance.

 

“Agreement” has the meaning assigned to such term in the preamble to this
Agreement.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Toronto and New York are authorized or required by law
to remain closed.

 

“Canadian Collateral Agent” has the meaning assigned to such term in the
preamble to this Agreement.

 

 “Collateral” means all Other Collateral in which a security interest has been
granted hereunder and all Pledged Collateral.

 

“Collateral Access Agreement” means any landlord waiver or other agreement, in
customary form and substance, between the Canadian Collateral Agent and any
third party (including any bailee, consignee, customs broker, or other similar
Person) in possession of any Collateral or any landlord of Grantor for any real
property where any Collateral is located, as such landlord waiver or other
agreement may be amended, restated, or otherwise modified from time to time.

 

“Collateral Agent” means The Bank of New York, as the collateral agent under the
Indenture and its successors and assigns and any replacement thereof under any
other Financing Document.

 

“Collateral Agreement” means the Collateral Agreement as defined under the
Indenture and any similar collateral agreement granting Liens to secure any
other Financing Document.

 

“Company” has the meaning assigned to such term in the preliminary statement of
this Agreement.

 

“Control” means, with respect to a specific form of Investment Property,
“control” as defined in sections 23 through 26 of the STA as applicable to such
form of Investment Property.

 

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by Grantor or that Grantor otherwise has the right to license, or granting any
right to Grantor under any copyright now or hereafter owned by any third party,
and all rights of Grantor under any such agreement.

 

“Copyrights” means all of the following now owned or hereafter acquired by
Grantor:  (a) all copyright rights in any work subject to the copyright laws of
Canada or any other country, whether as author, assignee, transferee or
otherwise, and (b) all

 

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registrations and applications for registration of any such copyright in Canada
or any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the Canadian
Intellectual Property Office, including those listed on Schedule II.

 

“Default” means any event which is, or after notice or passage of time or both
would be, an Event of Default.

 

“Deposit Accounts” means any demand, time, savings, passbook or like account
maintained with a depository institution.

 

“Effective Date” means November 15, 2007.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.

 

“Event of Default” shall mean an event of default under any Financing Document
and each of the following:  (a) Grantor defaults in any payment of interest on
any Intercompany Notes when the same becomes due and payable on the applicable
due date and such default continues for a period of 30 days, or (b) Grantor
defaults in any payment of principal on the Intercompany Notes when the same
becomes due and payable on the applicable due date, upon demand, acceleration or
otherwise.

 

“Excluded Equity Interest” has the meaning assigned to such term in
Section 2.01(a).

 

“Financing Documents” means the Indenture and any financing agreement or
indenture in respect of any refinancing of the Initial Securities, to the extent
that such refinancing is permitted under the terms of the Indenture, and is
secured by a pledge of the Intercompany Notes.

 

“Financing Document Obligations” means the Notes Obligations (as defined under
the Indenture) and any similar obligations under any Financing Documents.

 

“Grantor” has the meaning assigned to such term in the preliminary statement of
this Agreement.

 

“Indemnitees” has the meaning assigned to such term in Section 5.03

 

“Indenture” has the meaning assigned to such term in the preliminary statement
of this Agreement.

 

“Initial Purchasers”  has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

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“Initial Securities” has the meaning assigned to such term in the Indenture.

 

 “Intangibles” has the meaning assigned to it in the PPSA, and includes, whether
now owned or hereafter acquired by Grantor, including corporate or other
business records, indemnification claims, contract rights (including rights
under leases, whether entered into as lessor or lessee, Hedging Agreements and
other agreements), Intellectual Property, goodwill, registrations, franchises,
tax refund claims and any letter of credit, guarantee, claim, security interest
or other security held by or granted to Grantor to secure payment by an Account
Debtor of any of the Accounts.

 

“Intellectual Property” means all intellectual and similar property of every
kind and nature now owned or hereafter acquired by Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.

 

“Intercompany Loans” means (a) the Company’s loan of $125,000,000 of the gross
proceeds from the sale of the Initial Securities to 632421 N.B Ltd. (a wholly
owned Subsidiary to be amalgamated into the Grantor on the Effective Date, which
loan obligations shall be assumed by the Grantor by operation of law upon
consummation of the Transactions (as defined in the Indenture)), on the
Effective Date and (b) any additional amounts from time to time loaned by the
Company to the Grantor on or after the Effective Date (excluding loans made in
the ordinary course of business in connection with centralized cash management
arrangements).

 

“Intercompany Note” means one or more senior secured demand promissory notes
evidencing Intercompany Loans.

 

“Intercompany Note Collateral Account” has the meaning assigned to such term in
the Indenture.

 

“Intercompany Notes Documents” means the Intercompany Notes, the Intercompany
Note Security Documents and all other instruments, agreements and other
documents evidencing or governing the loan evidenced by the Intercompany Notes,
and all schedules, exhibits and annexes to each of the foregoing executed and
delivered pursuant to the foregoing, as such documents and instruments may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Intercompany Note Security Documents” means one or more security agreements,
control agreements, pledge agreements, mortgages, deeds of trust and collateral
assignments entered into by the Grantor, the Canadian Collateral Agent or the
Company, defining terms of the security interests in the Collateral securing the
Intercompany Obligations.

 

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“Intercompany Obligations” means the obligation of Grantor under the
Intercompany Notes and the Intercompany Note Security Documents.

 

“Intercreditor Agreement” means the Lien Subordination and Intercreditor
Agreement dated as of the date hereof among Symmetry, the Company, Grantor, the
other Subsidiaries of Symmetry described therein, JPMorgan Chase Bank, N.A. as
administrative agent, and the Collateral Agent, as amended or supplemented from
time to time.

 

“Investment Property Control Agreement” means:

 

(a)           with respect to any Uncertificated Securities included in the
Collateral, an agreement between the issuer of such Uncertificated Securities
and another Person whereby such issuer agrees to comply with instructions that
are originated by such Person in respect of such Uncertificated Securities,
without the further consent of Grantor; and

 

(b)           with respect to any Securities Accounts or Security Entitlements
included in the Collateral, an agreement between the Securities Intermediary in
respect of such Security Accounts or Entitlements and another Person pursuant to
which such Securities Intermediary agrees to comply with any Entitlement orders
with respect to such Security Accounts on Security Entitlements that are
original by such Person, without the further consent of Grantor.

 

“IP Security Agreements” has the meaning assigned to such term in Section 3.02

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“License” means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement relating to intellectual property to which
Grantor is a party, including those listed on Schedule II.

 

“Other Collateral” means any and all of the following: (a) all Accounts and
related Records; (b) all Chattel Paper; (c) all Deposit Accounts; (d) all cash,
checks and other negotiable instruments, funds and other evidences of payment
held therein; (e) all Inventory; (f) all Equipment (including all Fixtures),
g) all Documents of Title, (h) all Intangibles, (i) all Instruments, (j) all
Investment Property, (k) all books and records related to the foregoing; and
(l) all Proceeds (including insurance Proceeds) and products of any and all of
the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing. The Other Collateral includes, but is not
limited to, the ABL Collateral.

 

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“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by Grantor or that Grantor otherwise has
the right to license, is in existence, or granting to Grantor any right to make,
use or sell any invention on which a patent, now or hereafter owned by any third
party, is in existence, and all rights of Grantor under any such agreement.

 

“Patents” means all of the following now owned or hereafter acquired by
Grantor:  (a) all letters patent of Canada or the equivalent thereof in any
other country, all registrations and recordings thereof, and all applications
for letters patent of Canada or the equivalent thereof in any other country,
including registrations, recordings and pending applications in Canada Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule II, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

 

“Perfection Certificate” means a certificate in the form of Exhibit I.

 

“Permitted Liens” means Liens permitted under the Financing Documents.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority
or other entity.

 

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

 

“Pledged Debt Securities” has the meaning assigned to such term in Section 2.01.

 

“Pledged Equity Interests” has the meaning assigned to such term in
Section 2.01.

 

“Pledged Securities” means any promissory notes, stock certificates or other
securities certificates or instruments now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.

 

“PPSA” means the Personal Property Security Act (Ontario), including the
regulations thereto, provided that, if perfection or the effect of perfection or
non-perfection or the priority of any Lien created hereunder on the Collateral
is governed by the personal property security as in effect in a jurisdiction
other than Ontario, “PPSA” means the Personal Property Security Act or such
other applicable legislation as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non-perfection or priority.

 

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“Purchase Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

“Secured Parties” means, collectively, (a) the Company, (b) Canadian Collateral
Agent, (c) each other Person to whom any Intercompany Obligations are owed, and
(d) the successors and assigns of each of the foregoing.

 

“Securities” means:

 

(a)           “securities” as defined in the STA, or if no STA is in force in
the applicable jurisdiction, the PPSA of such jurisdiction;

 

(b)           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 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; and

 

(c)           any Security Entitlements to any of the foregoing.

 

“Security Interest” means, the security interest created under paragraph (a) of
Section 3.01.

 

“Special Equity Interest” means an interest in a partnership or a limited
liability company.

 

“STA” means the Securities Transfer Act, 2006 (Ontario), provided that, to the
extent that perfection or the effect of perfection or non-perfection or the
priority of any Lien created hereunder on Collateral that is Investment Property
is governed by the laws in effect in any province or territory of Canada other
than Ontario in which there is in force legislation substantially the same as
the Securities Transfer Act, 2006 (Ontario) (an “Other STA Province”), then
“STA” shall mean such other legislation as in effect from time to time in such
Other STA Province for purposes of the provisions hereof referring to or
incorporating by reference provisions of the STA; and to the extent that such
perfection or the effect of perfection or non-perfection or the priority of any
Lien created hereunder on the Collateral is governed by the laws of a
jurisdiction other than Ontario or an Other STA Province, then references herein
to the STA shall be disregarded except for the terms “Certificated Security” and
“Uncertificated Security”, which shall have the meanings herein as defined in
the Securities Transfer Act, 2006 (Ontario) regardless of whether the STA is in
force in the applicable jurisdiction.

 

“Subsidiary” means, with respect to any Person, any corporation, association,
partnership, limited liability company or other business entity of which more
than 50% of the total voting power of shares of Voting Stock (as defined in the
Indenture) is at the time owned or controlled, directly or indirectly, by: (1)
such Person, (2) such

 

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Person and one or more Subsidiaries of such Person or (3) one or more
Subsidiaries of such Person.

 

 “Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by Grantor or that Grantor otherwise has the right to license, or granting
to Grantor any right to use any trademark now or hereafter owned by any third
party, and all rights of Grantor under any such agreement.

 

“Trademarks” means all of the following now owned or hereafter acquired by
Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in Canada Patent and Trademark Office or any similar
offices in any State of Canada or any other country or any political subdivision
thereof, and all extensions or renewals thereof, including those listed on
Schedule II, (b) all goodwill associated therewith or symbolized thereby and
(c) all other assets, rights and interests that uniquely reflect or embody such
goodwill.

 

ARTICLE II

 

PLEDGE OF SECURITIES

 

SECTION 2.01. PLEDGE.

 

As security for the payment or performance, as the case may be, in full of the
Intercompany Obligations, Grantor hereby assigns and pledges to the Canadian
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, and hereby grants to the Canadian Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, a security interest in, all of
Grantor’s right, title and interest in, to and under the following assets:

 

(a)           the shares of capital stock and other Equity Interests held by it
or credited to a Securities Account maintained by or for the benefit of Grantor
or the Canadian Collateral Agent on the date hereof (including those listed on
Schedule II), any other Equity Interests obtained by Grantor in the future and
the certificates representing all such Equity Interests whether or not delivered
to or subject to the Control of the Canadian Collateral Agent pursuant this
Agreement (the “Pledged Equity Interests”); provided that the Pledged Equity
Interests shall not include Equity Interests in any Person that is not a
wholly-owned Subsidiary (or a Special Purpose Holdco (as defined under the
Indenture) with respect to such Person) where, pursuant to the organizational
documents of such Person and any related joint venture or similar agreement,
such assignment, pledge or grant of security interest is prohibited without the
consent of the equity holders of such Person (other than Symmetry or any of its
Subsidiaries) (the Equity Interests so excluded are collectively referred to
herein as the “Excluded Equity Interests”).

 

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(b)           the debt securities owned by it on the date hereof (including
those listed on Schedule II) any debt securities obtained by Grantor in the
future and the promissory notes and any other instruments evidencing all such
debt securities (the “Pledged Debt Securities”);

 

(c)           all other property that may be delivered to and held by the
Canadian Collateral Agent pursuant to the terms of this Section including all
Securities, Securities Accounts, and all Securities Entitlements carried in any
Securities Account;

 

(d)           subject to Section 2.05, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the
conversion of, and all other Proceeds received in respect of, the securities
referred to in clauses (a) and (b) above (other than, for greater certainty, the
Excluded Equity Interests);

 

(e)           subject to Section 2.05 all rights and privileges of Grantor with
respect to the securities and other property referred to in clauses (a), (b),
(c) and (d) above; and

 

(f)            all Proceeds of any of the foregoing

 

(the items referred to in the foregoing clauses (a) through (f) above being
collectively referred to as the “Pledged Collateral”).

 

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Canadian Collateral Agent, its successors and assigns, for the benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.

 

SECTION 2.02. DELIVERY OF THE PLEDGED COLLATERAL.

 

(a)           Grantor agrees promptly to deliver or cause to be delivered to the
Canadian Collateral Agent any and all Pledged Securities at any time owned by
Grantor, including all security certificates evidencing Certificated Securities,
all Instruments and all certificates evidencing any Special Equity Interests,
whether or not such Special Equity Interests constitute Securities, and to hold
in trust for the Canadian Collateral Agent upon receipt and immediately
thereafter deliver to the Canadian Collateral Agent any Securities, security
certificates evidencing Certificated Securities, Instruments and certificates
evidencing any Special Equity Interests, in each case constituting Collateral,
that are hereafter acquired by Grantor.

 

(b)           Grantor will cause any Indebtedness for borrowed money owed to
Grantor by any Person to be evidenced by a duly executed promissory note that is
pledged and delivered to the Canadian Collateral Agent pursuant to the terms
hereof.

 

(c)           Upon delivery to the Canadian Collateral Agent, (i) any Pledged
Securities shall be accompanied by stock powers duly executed in blank or other
instruments of transfer satisfactory to the Canadian Collateral Agent and by
such other instruments and

 

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documents as the Canadian Collateral Agent may reasonably request and (ii) all
other property comprising part of the Pledged Collateral shall be accompanied by
proper instruments of assignment duly executed by Grantor and such other
instruments or documents as the Canadian Collateral Agent may reasonably
request. For greater certainty, any security certificates evidencing
Certificated Securities or any certificates evidencing Special Equity Interests
delivered to the Canadian Collateral Agent pursuant to this Section 2.02 shall
be duly endorsed to the Canadian Collateral Agent or its nominee or in blank by
an effective endorsement within the meaning of the STA (such endorsement to
include, for greater certainty, a duly executed instrument of transfer or stock
power of attorney in favour of the Canadian Collateral Agent or its nominee in
blank). Each delivery of Pledged Securities after the date of this Agreement
shall be accompanied by a schedule describing the Pledged Securities so
delivered, which schedule shall be attached hereto and shall become part of
Schedule I hereto; provided that failure to attach any such schedule shall not
affect the validity of the pledge of such Pledged Securities.

 

(d)           The assignment, pledges and security interests granted in
Section 2.01 are granted as security only and shall not subject the Canadian
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of Grantor with respect to or arising out of the
Pledged Collateral.

 

SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS.

 

Grantor represents, warrants and covenants to and with the Canadian Collateral
Agent, for the benefit of the Secured Parties, that:

 

(a)           each agreement between Grantor and a Securities Intermediary that
governs any Securities Account included in the Collateral or to which any
Collateral that is Investment Property has been credited either (i) specifies
that the Province of Ontario is the Securities Intermediary’s jurisdiction for
the purposes of the STA of Ontario or (ii) is expressed to be governed by the
laws of the Province of Ontario.

 

(b)           Schedule II sets forth, as of the date hereof a true and complete
list of, (i) all the Equity Interests owned by Grantor, setting forth the
percentage of the issued and outstanding units of each class of the Equity
Interests of the issuer thereof so owned and the number of each certificate
representing the same, if applicable, and (ii) all debt securities owned by
Grantor, setting forth all promissory notes and other instruments evidencing the
same;

 

(c)           the Pledged Equity Interests and Pledged Debt Securities have been
duly and validly authorized and issued by the issuers thereof and (i) in the
case of Pledged Equity Interests, are fully paid and nonassessable and (ii) in
the case of Pledged Debt Securities, are legal, valid and binding obligations of
the issuers thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law;

 

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(d)           except for the security interests granted hereunder, Grantor
(i) is and, subject to any transfers made in compliance with the Financing
Document, will continue to be the direct sole beneficial owner, and the sole
holder of record or Entitlement Holder of the Pledged Securities listed on
Schedule II, (ii) holds the same free and clear of all Liens, other than Liens
created by this Agreement, other Permitted Liens and transfers made in
compliance with the Financing Documents, and (iii) will defend its title or
interest thereto or therein against any and all Liens (other than the Lien
created by this Agreement and other Permitted Liens), however, arising, of all
Persons whomsoever;

 

(e)           all Pledged Equity Interests credited to a Securities Account
maintained with a Securities Intermediary of Grantor is subject to an Investment
Property Control Agreement between the Securities Intermediary and the Canadian
Collateral Agent;

 

(f)            except for restrictions and limitations imposed by the
Intercompany Notes Documents, the Credit Agreement, the Intercreditor Agreement
or securities laws generally, (i) the Pledged Collateral is and will continue to
be freely transferable and assignable and (ii) none of the Pledged Collateral is
or will be subject to any option, right of first refusal, shareholders
agreement, charter or bylaw provisions or contractual restriction of any nature
that might prohibit, impair, delay or otherwise affect the pledge of such
Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or
the exercise by the Canadian Collateral Agent of rights and remedies hereunder
other than, in the case of the Pledged Collateral constituting Equity Interests
in, or debt security of, any Non-Wholly-Owned Subsidiary, any of the foregoing
restrictions and limitations set forth in the organizational documents of such
Non-Wholly Owned Subsidiary or any related joint venture or similar agreements
(to the extent such restrictions and limitations cannot be waived without the
prior consent of any equityholders of such Non-Wholly Owned Subsidiary (other
than Symmetry or any of its Subsidiaries));

 

(g)           Grantor has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;

 

(h)           no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);

 

(i)            by virtue of the execution and delivery by Grantor of this
Agreement, when any Pledged Securities are delivered to the Canadian Collateral
Agent in accordance with this Agreement, the Canadian Collateral Agent will
obtain a legal, valid and perfected lien upon and security interest in such
Pledged Securities as security for the payment and performance of the
Intercompany Obligations;

 

(j)            except as disclosed in Schedule I, all Pledged Equity Interests
that constitute a Special Equity Interest:

 

(i)            is dealt in or traded on any securities exchange or in any
securities market;

 

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(ii)           expressly provides by its terms that it is a “security” for the
purposes of the applicable STA; or

 

(iii)          is held through a Securities Account;

 

(k)           Grantor has not consented to any Person other than the Canadian
Collateral Agent entering into, nor has become a party to, an Investment
Property Control Agreement in respect of any Investment Property or Securities
Account included in the Collateral, and no such Investment Property Control
Agreement is outstanding and in force; and

 

(l)            the pledge effected hereby is effective to vest in the Canadian
Collateral Agent, for the benefit of the Secured Parties, the rights of the
Canadian Collateral Agent in the Pledged Collateral as set forth herein.

 

SECTION 2.04. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. THE CANADIAN
COLLATERAL AGENT, ON BEHALF OF THE SECURED PARTIES, SHALL HAVE THE RIGHT (IN ITS
SOLE AND ABSOLUTE DISCRETION) TO HOLD THE PLEDGED SECURITIES IN ITS OWN NAME AS
PLEDGEE, THE NAME OF ITS NOMINEE (AS PLEDGEE OR AS SUB-AGENT) OR THE NAME OF
GRANTOR, ENDORSED OR ASSIGNED IN BLANK OR IN FAVOR OF THE CANADIAN COLLATERAL
AGENT. GRANTOR WILL PROMPTLY GIVE TO THE CANADIAN COLLATERAL AGENT COPIES OF ANY
NOTICES OR OTHER COMMUNICATIONS RECEIVED BY IT WITH RESPECT TO PLEDGED
SECURITIES REGISTERED IN THE NAME OF GRANTOR. THE CANADIAN COLLATERAL AGENT
SHALL AT ALL TIMES HAVE THE RIGHT TO EXCHANGE THE CERTIFICATES REPRESENTING
PLEDGED SECURITIES FOR CERTIFICATES OF SMALLER OR LARGER DENOMINATIONS FOR ANY
PURPOSE CONSISTENT WITH THIS AGREEMENT.

 

SECTION 2.05. VOTING RIGHTS; DIVIDENDS AND INTEREST.

 

(a)           Unless and until an Event of Default shall have occurred and be
continuing and the Canadian Collateral Agent shall have notified Grantor that
its rights under this Section are being suspended:

 

(i)            Grantor shall be entitled to exercise any and all voting and
other consensual rights and powers inuring to an owner of Pledged Equity
Interests or Pledged Debt Securities or any part thereof for any purpose
consistent with the terms of this Agreement, the Financing Documents and the
other Intercompany Notes Documents; provided that such rights and powers shall
not be exercised in any manner that could reasonably be expected to materially
and adversely affect the rights inuring to an owner of any Pledged Equity
Interests or Pledged Debt Securities or the rights and remedies of the Canadian
Collateral Agent or the other Secured Parties under this Agreement, the
Financing Documents and the other Intercompany Notes Documents or the ability of
the Canadian Collateral Agent or the other Secured Parties to exercise the same.

 

(ii)           The Canadian Collateral Agent shall execute and deliver to
Grantor, or cause to be executed and delivered to Grantor, all such proxies,
powers of attorney and other instruments as Grantor may reasonably request for
the

 

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purpose of enabling Grantor to exercise the voting and/or consensual rights and
powers it is entitled to exercise pursuant to paragraph (i) above.

 

(iii)          Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Equity Interests or Pledged Debt Securities to the extent
and only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in accordance
with, the terms and conditions of the Financing Documents and the other
Intercompany Notes Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would constitute
Pledged Equity Interests or Pledged Debt Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
of the issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by Grantor, shall not be commingled by Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Canadian Collateral
Agent and shall be forthwith delivered to the Canadian Collateral Agent in the
form in which it shall have been so received (with any necessary endorsement).

 

(b)           Upon the occurrence and during the continuance of an Event of
Default, after the Canadian Collateral Agent shall have notified Grantor of the
suspension of its rights under paragraph (a)(iii) of this Section, then all
rights of Grantor to dividends, interest, principal or other distributions that
Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section
shall cease, and all such rights shall thereupon become vested in the Canadian
Collateral Agent, which shall have the sole and exclusive right and authority to
receive and retain such dividends, interest, principal or other distributions.
All dividends, interest, principal or other distributions received by Grantor
contrary to the provisions of this Section shall be held in trust for the
benefit of the Canadian Collateral Agent, shall be segregated from other
property or funds of Grantor and shall be forthwith delivered to the Canadian
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Canadian Collateral Agent pursuant to the provisions of this paragraph (b)
shall be retained by the Canadian Collateral Agent in an account to be
established by the Canadian Collateral Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of Section 4.02.
After all Events of Default have been cured or waived and the Canadian
Collateral Agent shall have received a certificate of a Officer of Grantor to
that effect, the Canadian Collateral Agent shall, promptly repay to Grantor
(without interest) all dividends, interest, principal or other distributions
that Grantor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section and that remain in such account.

 

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(c)           Upon the occurrence and during the continuance of an Event of
Default, after the Canadian Collateral Agent shall have notified Grantor of the
suspension of its rights under paragraph (a)(i) of this Section, then all rights
of Grantor to exercise the voting and consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section , and the
obligations of the Canadian Collateral Agent under paragraph (a)(ii) of this
Section, shall cease, and all such rights shall thereupon become vested in the
Canadian Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Collateral Agent, the Canadian Collateral
Agent shall have the right from time to time following the occurrence and during
the continuance of an Event of Default to permit Grantor to exercise such
rights.

 

(d)           Any notice given by the Canadian Collateral Agent to Grantor
suspending its rights under paragraph (a) of this Section (i) may be given by
telephone if promptly confirmed in writing and (ii) may suspend the rights of
Grantor under paragraph (a)(i) or paragraph (a)(iii) in part without suspending
all such rights (as specified by the Canadian Collateral Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the Canadian
Collateral Agent’s rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.

 

ARTICLE III

 

SECURITY INTERESTS IN PERSONAL PROPERTY

 

SECTION 3.01. SECURITY INTEREST.

 

(a)           As security for the payment or performance, as the case may be, in
full of the Intercompany Obligations, Grantor hereby assigns and pledges to the
Canadian Collateral Agent, its successors and assigns, for the benefit of the
Secured Parties, and hereby grants to the Canadian Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest in, all right, title and interest in, to or under any and all of the
Other Collateral now owned or at any time hereafter acquired by Grantor or in
which Grantor now has or at any time in the future may acquire any right, title
or interest, other than any portion thereof constituting the Excluded Equity
Interest.

 

(b)           Grantor hereby agrees, subject to Section 4.15 of the Indenture,
to file in any relevant jurisdiction any financing statements (including fixture
filings) with respect to the Other Collateral in which a security interest is
created by Grantor hereunder or any part thereof and amendments thereto that
contain the information required by the laws of each applicable jurisdiction for
the filing of any financing statement or amendment, including in the case of a
financing statement filed as a fixture filing or covering Other Collateral
constituting minerals or the like to be extracted or timber to be cut, a
sufficient description of the real property to which such Other Collateral
relates. Grantor agrees to provide such information to the Canadian Collateral
Agent promptly upon request.

 

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Grantor also ratifies its authorization for the Canadian Collateral Agent to
file in any relevant jurisdiction any financing statements or financing change
statements if filed prior to the date hereof.

 

Grantor hereby also agrees, subject to Section 4.15 of the Indenture, to file
with the Canadian Intellectual Property Office (or any successor office or any
similar office in any other country) such documents as may be necessary or
advisable for the purpose of confirming, continuing, enforcing or protecting the
Security Interest granted by Grantor, without the signature of Grantor, and
naming Grantor as debtor and the Canadian Collateral Agent as secured party.

 

(c)           The Security Interest is granted as security only and shall not
subject the Canadian Collateral Agent or any other Secured Party to, or in any
way alter or modify, any obligation or liability of Grantor with respect to or
arising out of the Other Collateral.

 

(d)           Notwithstanding anything herein to the contrary, in no event shall
the security interest granted hereunder attach to any contract or agreement to
which Grantor is a party or any of its rights or interests thereunder if and for
so long as the grant of security interest shall constitute or result in (i) the
unenforceability of any right of Grantor thereunder or (ii) a breach or
termination under the terms of, or a default under, any such contract or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to applicable law or principles of equity), provided, that
such security interest shall attach immediately at such time as the condition
causing such unenforceability, breach or termination shall be remedied or shall
otherwise cease to exist and, to the extent severable, shall attach immediately
to any portion of such contract or agreement that does not result in any of the
consequences specified in this paragraph including Proceeds of such contract or
agreement.

 

SECTION 3.02. REPRESENTATIONS AND WARRANTIES. GRANTOR REPRESENTS AND WARRANTS TO
THE CANADIAN COLLATERAL AGENT AND THE SECURED PARTIES THAT:

 

(a)           Grantor has good and valid rights in and title to the Other
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Canadian Collateral
Agent the Security Interest in such Other Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval that has been obtained.

 

(b)           The Perfection Certificate has been duly prepared, completed and
executed, and the information set forth therein, including the exact legal name
of Grantor, is correct and complete as of the Effective Date. Grantor shall
ensure that, within one month after the Effective Date, a Patent and Trademark
Security Agreement, in the form of Exhibit II hereto, and a Copyright Security
Agreement in the form of Exhibit III hereto (such agreements being collectively
referred to as the “IP Agreements”) has been received and recorded by the
Canadian Intellectual Property Office, to further protect the security interest
in favor of the Canadian Collateral Agent, for the benefit of the Secured
Parties, in respect of all Other Collateral consisting of Patents, Trademarks
and Copyrights in

 

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which a security interest may be protected by filing, recording or registration
in Canada (or any political subdivision thereof) and its territories and
possessions. No further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary (other than such actions as are
necessary to perfect the Security Interest with respect to any Other Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).

 

(c)           Schedule II hereto sets forth, as of the date hereof, (i) all
Canadian registered Patents and Patent applications owned by Grantor, including
the name of the registered owner, type, registration or application number and
the expiration date (if already registered) thereof, (ii) all Canadian
registered Trademarks and Trademark applications owned by Grantor, including the
name of the registered owner, the registration or application number and the
expiration date (if already registered) thereof, and (iii) all Canadian
registered Copyrights and Copyright applications owned by Grantor, including the
name of the registered owner, title and, if applicable, the registration number
of each such Copyright or Copyright application.

 

(d)           The Security Interest constitutes (i) a legal and valid security
interest in all the Other Collateral securing the payment and performance of the
Intercompany Obligations, (ii) subject to the filings described in
Section 3.02(b) a perfected security interest in all Other Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in Canada (or any political
subdivision thereof) and its territories and possessions pursuant to the PPSA
(or other applicable personal property security laws in each province) and (iii)
a security interest that shall be perfected in Other Collateral in which a
security interest may be perfected upon the receipt and recording of the IP
Agreements with the Canadian Intellectual Property Office. The Security Interest
is and shall be prior to any other Lien on any of the Other Collateral, other
than Permitted Liens.

 

(e)           The Other Collateral is owned by Grantor free and clear of any
Lien, except for Permitted Liens. Grantor has not filed or consented to the
filing of (i) any financing statement or analogous document under the PPSA or
any other applicable laws covering any Other Collateral with the Canadian
Intellectual Property Office or (iii) any assignment in which Grantor assigns
any Other Collateral or any security agreement or similar instrument covering
any Other Collateral with any foreign governmental, municipal or other office,
which financing statement or analogous document, assignment, security agreement
or similar instrument is still in effect, except, in each case, for Permitted
Liens.

 

SECTION 3.03. COVENANTS.

 

(a)           Grantor will furnish to the Canadian Collateral Agent promptly
(and, in any event, within 15 days of the occurrence of any such change) written
notice of any change (i) in Grantor’s legal name, as set forth in its documents
or organization, (ii) in the location of Grantor’s chief executive office, the
jurisdiction of its domicile (for purposes of the Civil Code of Quebec), the
jurisdiction of any office in which it maintains books or records

 

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relating to the Collateral owned by it or the jurisdiction of any office or
facility at which Collateral owned by it is located (including the establishment
of any such new office or facility in a new jurisdiction), (iii) in Grantor’s
form of organization or corporate structure (including as a result of any merger
or consolidation), or (iv) in the jurisdiction of Grantor’s organization.

 

(b)           Grantor agrees to maintain, at its own cost and expense, complete
and accurate records with respect to the Other Collateral owned by it, and in
which it has granted a security interest hereunder in accordance with GAAP and
applicable law, and, at such time or times as the Canadian Collateral Agent may
reasonably request, promptly to prepare and deliver to the Canadian Collateral
Agent a duly certified schedule or schedules in form and detail satisfactory to
the Canadian Collateral Agent showing the identity, amount and location of any
and all such Other Collateral.

 

(c)           Within 90 days after the end of each fiscal year of Grantor,
Grantor will furnish to the Collateral Agent a certificate of an Officer of
Grantor setting forth (i) any Equity Interest or Indebtedness owned by any
Grantor, (ii) any Intellectual Property owned by any Grantor and that, in each
case, (A) if so owned or filed by Grantor as of the Effective Date, would have
been required to be set forth on the applicable schedule to this Agreement
pursuant to the terms hereof and (B) have not been set forth on any such
schedule to this Agreement or in a certificate previously delivered pursuant to
this clause (c).

 

(d)           Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Other Collateral in which it has granted a
security interest hereunder against all Persons and to defend the Security
Interest of the Canadian Collateral Agent in such Other Collateral and the
priority thereof against any Lien (other than Permitted Liens). Notwithstanding
anything to the contrary contained herein (including any provision for,
reference to, or acknowledgement of, any Permitted Lien), nothing herein and no
approval by the Canadian Collateral Agent or Secured Parties of any Lien or
Permitted Lien (whether such approval is oral or in writing) shall be construed
as or deemed to constitute a subordination by the Canadian Collateral Agent or
the Secured Parties of any security interest or other right, interest or Lien in
or to the Other Collateral or any part thereof in favour of any Lien or
Permitted Lien or any holder of any Lien or Permitted Lien, except as provided
in Section 5.15 and subject to the terms of the Intercreditor Agreement.

 

(e)           Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Canadian Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith.

 

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Without limiting the generality of the foregoing, Grantor hereby authorizes the
Canadian Collateral Agent, with prompt notice thereof to Grantor, to supplement
this Agreement by supplementing Schedule II or adding additional schedules
hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided that Grantor shall have
the right, exercisable within 10 days after it has been notified by the Canadian
Collateral Agent of the specific identification of such Collateral, to advise
the Canadian Collateral Agent in writing of any inaccuracy of the
representations and warranties made by Grantor hereunder with respect to such
Collateral. Grantor agrees that it will use its best efforts to take such action
as shall be necessary in order that all representations and warranties hereunder
shall be true and correct with respect to such Collateral within 30 days after
the date it has been notified by the Canadian Collateral Agent of the specific
identification of such Collateral.

 

(f)            The Canadian Collateral Agent and such Persons as the Canadian
Collateral Agent may reasonably designate shall have the right, at Grantor’s own
cost and expense, upon reasonable prior notice, to inspect the Other Collateral
subject to the Security Interest, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of such
Other Collateral is located, to discuss Grantor’s affairs, finances and
condition with the officers of Grantor and its independent accountants and to
verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Other
Collateral subject to the Security Interest (including, in the case of Accounts
or Other Collateral in the possession of any third person, by contacting Account
Debtors or the third person possessing such Other Collateral for the purpose of
making such a verification), all of such reasonable times and as often as
reasonably requested. The Canadian Collateral Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any other Secured Party.

 

(g)           At its option, the Canadian Collateral Agent may discharge past
due taxes, assessments, charges, fees or Liens at any time levied or placed on
the Other Collateral (other than Permitted Liens), and may pay for the
maintenance and preservation of the Other Collateral subject to the Security
Interest to the extent Grantor fails to do so as required by the Financing
Documents or this Agreement, and Grantor agrees to reimburse the Canadian
Collateral Agent on demand for any payment made or any expense incurred by the
Canadian Collateral Agent pursuant to the foregoing authorization; provided that
nothing in this paragraph shall be interpreted as excusing Grantor from the
performance of, or imposing any obligation on the Canadian Collateral Agent or
any other Secured Party to cure or perform, any covenants or other promises of
Grantor with respect to taxes, assessments, charges, fees or Liens and
maintenance of properties as set forth herein or in the other Intercompany Notes
Documents.

 

(h)           If at any time Grantor shall take a security interest in any
property of an Account Debtor or any other Person to secure payment and
performance of an Account, Grantor shall promptly assign such security interest
to the Canadian Collateral Agent, for the benefit of the Secured Parties. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.

 

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(i)            Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Other Collateral subject to
the Security Interest, all in accordance with the terms and conditions thereof,
and Grantor agrees to indemnify and hold harmless the Canadian Collateral Agent
and the other Secured Parties from and against any and all liability for such
performance.

 

(j)            Grantor shall not make or permit to be made an assignment, pledge
or hypothecation of the Other Collateral subject to the Security Interest or
shall grant any other Lien in respect of such Other Collateral, except as
permitted by the Financing Documents. Grantor shall not make or permit to be
made any transfer of such Other Collateral and Grantor shall remain at all times
in possession of such Other Collateral owned by it, except that unless and until
the Canadian Collateral Agent shall notify Grantor that an Event of Default
shall have occurred and be continuing and that during the continuance thereof
Grantor shall not sell, convey, lease, assign, transfer or otherwise dispose of
any such Other Collateral (which notice may be given by telephone if promptly
confirmed in writing), Grantor may use and dispose of such Other Collateral in
any lawful manner not inconsistent with the provisions of this Agreement, the
Financing Documents or any other Intercompany Notes Document.

 

(k)           Grantor will not, without the Canadian Collateral Agent’s prior
written consent, grant any extension of the time of payment of any Accounts
included in the Other Collateral, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partly, any Person liable
for the payment thereof or allow any credit or discount whatsoever thereon,
other than extensions, compromises, settlements, releases, credits or discounts
granted or made in the ordinary course of business and consistent with its
current practices and in accordance with such prudent and standard practice used
in industries that are the same as or similar to those in which Grantor is
engaged.

 

(l)            Grantor will maintain, with financially sound and reputable
insurance companies, insurance in such amounts (with no greater risk retention)
and against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations. Each such policy of insurance maintained by Grantor (other
than policies of the type in respect of which such actions customarily are not
required) shall (i) in the case of each liability insurance policy, name the
Canadian Collateral Agent, on behalf of the Secured Parties, as an additional
insured thereunder, (ii) in the case of each casualty insurance policy, contain
a loss payable clause or endorsement that names the Canadian Collateral Agent,
on behalf of the Secured Parties, as the loss payee thereunder and (iii) provide
for at least 30 days’ (or such shorter number of days may be agreed to by the
Canadian Collateral Agent) prior written notice to the Canadian Collateral Agent
of any cancellation of such policy. Upon the Canadian Collateral Agent’s
request, Grantor will furnish to the Canadian Collateral Agent information in
reasonable detail as to the insurance so maintained. Grantor irrevocably makes,
constitutes and appoints the Canadian Collateral Agent (and all officers,
employees or agents designated by the Canadian Collateral Agent) as Grantor’s
true and lawful agent (and attorney-in-fact) for the purpose, during the

 

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continuance of an Event of Default, of making, settling and adjusting claims in
respect of Other Collateral subject to the Security Interest under policies of
insurance, endorsing the name of Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Canadian Collateral Agent may, without waiving or
releasing any obligation or liability of Grantor hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insurance
and pay such premium and take any other actions with respect thereto as the
Canadian Collateral Agent deems advisable. All sums disbursed by the Canadian
Collateral Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by Grantor to the Canadian Collateral Agent and shall
be additional Intercompany Obligations secured hereby.

 

(m)          Grantor shall maintain, in form and manner reasonably satisfactory
to the Canadian Collateral Agent, records of its Chattel Paper and its books,
records and documents evidencing or pertaining thereto.

 

SECTION 3.04. OTHER ACTIONS. IN ORDER TO FURTHER ENSURE THE ATTACHMENT,
PERFECTION AND PRIORITY OF, AND THE ABILITY OF THE CANADIAN COLLATERAL AGENT TO
ENFORCE, THE SECURITY INTEREST, GRANTOR AGREES, IN EACH CASE AT GRANTOR’S OWN
EXPENSE, TO TAKE THE FOLLOWING ACTIONS WITH RESPECT TO THE FOLLOWING OTHER
COLLATERAL OWNED BY IT AND SUBJECT TO THE SECURITY INTEREST:

 

(a)           Instruments. If Grantor shall at any time hold or acquire any
Instruments subject to the Security Interest, Grantor shall forthwith endorse,
assign and deliver the same to the Canadian Collateral Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Canadian Collateral Agent may from time to time reasonably request.

 

(b)           Investment Property.

 

(i)            Except to the extent otherwise provided in Article II, if Grantor
shall at any time hold or acquire any certificated securities subject to the
Security Interest, Grantor shall forthwith endorse, assign and deliver the same
to the Canadian Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Canadian Collateral Agent may from time
to time specify.

 

(ii)           In respect of any Uncertificated Securities included in the
Pledged Collateral,

 

(A)          on request by the Canadian Collateral Agent, Grantor shall cause
and hereby authorizes and constitutes the Canadian Collateral Agent as its
attorney-in-fact from time to time to cause each issuer of such Uncertificated
Securities to register the Canadian

 

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Collateral Agent or its nominee as the registered owner of such Uncertificated
Securities.

 

(B)           Grantor hereby consents to the Canadian Collateral Agent entering
into an Investment Property Control Agreement with the issuer of any such
Uncertificated Securities.

 

(iii)          Grantor shall not consent to the entering into by any issuer of
any Uncertificated Securities included in or relating to the Pledged Collateral
of an Investment Property Control Agreement in respect of such Uncertificated
Securities with any Person other than the Canadian Collateral Agent or its
nominee.

 

(iv)          With respect to any Pledged Collateral that is an interest in a
partnership or a limited liability company which as of the date hereof does not
satisfy one of the requirements listed in (j),  if at any time hereafter any
such requirement is satisfied,  Grantor shall immediately give notice to such
effect to the Collateral Agent.

 

(v)           In respect of any Securities Accounts included in the Pledged
Collateral or any Security Entitlements carried therein,

 

(A)          on request by the Canadian Collateral Agent, Grantor shall direct
the Securities Intermediary in respect of such Security Entitlements to transfer
the Financial Assets to which such Security Entitlements relate to a Securities
Account designated by the Canadian Collateral Agent; and

 

(B)           Grantor hereby consents to the Canadian Collateral Agent entering
into an Investment Property Control Agreement with the Securities Intermediary
in respect of any such Security Entitlements.

 

(vi)          Grantor shall not consent to the entering into by any Securities
Intermediary for any Security Entitlements included in or relating to the
Pledged Collateral of an Investment Property Control Agreement in respect of
such Security Entitlements with any Person other than the Canadian Collateral
Agent or its nominee.

 

(vii)         Grantor shall not enter into any agreement with any Securities
Intermediary that governs any Securities Account included in or relating to any
Pledged Collateral that specifies any such Securities Intermediary’s
jurisdiction to be a jurisdiction other than the Province of Ontario for the
purposes of the STA or which is governed by the laws of a jurisdiction other
than the Province of Ontario or consent to any amendment to any such agreement
that would change such Securities Intermediary’s jurisdiction to a jurisdiction
other than the Province of Ontario for the

 

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purposes of the STA or its governing law to a jurisdiction other than the
Province of Ontario.

 

(c)           Collateral Access Agreements. Grantor shall use commercially
reasonable efforts to obtain a Collateral Access Agreement from the lessor of
each leased property, mortgagee of owned property or bailee or consignee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall provide
access rights and contain a waiver or subordination of all Liens or claims that
the landlord, mortgagee, bailee or consignee may assert against the Collateral
at that location. Grantor shall timely and fully pay and perform its obligations
under all leases and other agreements with respect to each leased location or
third party warehouse where any Collateral is or may be located.

 

SECTION 3.05. COVENANTS REGARDING PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.

 

(a)           Grantor agrees that it will not take or omit to take any action
(and will exercise commercially reasonable efforts to prevent its licensees from
taking or omitting to take any action) whereby any Patent that is material to
the conduct of Grantor’s business may become invalidated or dedicated to the
public, and agrees that it shall continue to mark any products covered by a
Patent with the relevant patent number as necessary and sufficient to establish
and preserve its maximum rights under applicable patent laws.

 

(b)           Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of Grantor’s
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.

 

(c)           Grantor (either itself or through its licensees or sublicensees)
will, for each work covered by a material Copyright, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice as necessary and sufficient to establish and preserve its maximum rights
under applicable copyright laws.

 

(d)           Grantor shall notify the Canadian Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the Canadian Intellectual Property Office or any court or similar office of any
country) regarding Grantor’s ownership of any Patent, Trademark or Copyright,
its right to register the same, or its right to keep and maintain the same.

 

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(e)           In no event shall Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
Canadian Intellectual Property Office or any office or agency in any political
subdivision of Canada or in any other country or any political subdivision
thereof, unless it promptly informs the Canadian Collateral Agent, and, upon
request of the Canadian Collateral Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Canadian Collateral Agent
may reasonably request to evidence the Canadian Collateral Agent’s security
interest in such Patent, Trademark or Copyright, and Grantor hereby appoints the
Canadian Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

 

(f)            Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the Canadian Intellectual Property Office
or any office or agency in any political subdivision of Canada or in any other
country or any political subdivision thereof, to maintain and pursue each
material application relating to the Patents, Trademarks or Copyrights (and to
obtain the relevant grant or registration) and to maintain each issued Patent
and each registration of the Trademarks and Copyrights that is material to the
conduct of Grantor’s business, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancellation proceedings against third parties.

 

(g)           In the event that Grantor has reason to believe that any Other
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third party, Grantor promptly shall notify the
Canadian Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Other Collateral.

 

(h)           Upon and during the continuance of an Event of Default, Grantor
shall use its best efforts to obtain all requisite consents or approvals by the
licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all Grantor’s right, title and interest thereunder to
the Canadian Collateral Agent or its designee.

 

ARTICLE IV

 

REMEDIES

 

SECTION 4.01. REMEDIES UPON DEFAULT.  UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, GRANTOR AGREES TO DELIVER EACH ITEM OF
COLLATERAL TO THE CANADIAN COLLATERAL AGENT ON DEMAND, AND IT IS AGREED THAT THE
CANADIAN COLLATERAL AGENT SHALL HAVE THE RIGHT TO TAKE ANY OF OR ALL THE
FOLLOWING ACTIONS AT THE SAME OR DIFFERENT TIMES: (A) WITH RESPECT TO ANY OTHER
COLLATERAL CONSISTING OF INTELLECTUAL

 

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PROPERTY, ON DEMAND, TO CAUSE THE SECURITY INTEREST TO BECOME AN ASSIGNMENT,
TRANSFER AND CONVEYANCE OF ANY OF OR ALL SUCH OTHER COLLATERAL BY GRANTOR TO THE
CANADIAN COLLATERAL AGENT, OR TO LICENSE OR SUBLICENSE, WHETHER GENERAL, SPECIAL
OR OTHERWISE, AND WHETHER ON AN EXCLUSIVE OR NONEXCLUSIVE BASIS, ANY SUCH OTHER
COLLATERAL THROUGHOUT THE WORLD ON SUCH TERMS AND CONDITIONS AND IN SUCH MANNER
AS THE CANADIAN COLLATERAL AGENT SHALL DETERMINE (OTHER THAN IN VIOLATION OF ANY
THEN-EXISTING LICENSING ARRANGEMENTS TO THE EXTENT THAT WAIVERS CANNOT BE
OBTAINED), AND (B) WITH OR WITHOUT LEGAL PROCESS AND WITH OR WITHOUT PRIOR
NOTICE OR DEMAND FOR PERFORMANCE, TO TAKE POSSESSION OF THE OTHER COLLATERAL AND
WITHOUT LIABILITY FOR TRESPASS TO ENTER ANY PREMISES WHERE THE OTHER COLLATERAL
MAY BE LOCATED FOR THE PURPOSE OF TAKING POSSESSION OF OR REMOVING THE OTHER
COLLATERAL AND, GENERALLY, TO EXERCISE ANY AND ALL RIGHTS AFFORDED TO A SECURED
PARTY UNDER THE PPSA OR OTHER APPLICABLE LAW. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, GRANTOR AGREES THAT THE CANADIAN COLLATERAL AGENT SHALL HAVE THE
RIGHT, SUBJECT TO THE MANDATORY REQUIREMENTS OF APPLICABLE LAW, TO SELL OR
OTHERWISE DISPOSE OF ALL OR ANY PART OF THE COLLATERAL AT A PUBLIC OR PRIVATE
SALE OR AT ANY BROKER’S BOARD OR ON ANY SECURITIES EXCHANGE, FOR CASH, UPON
CREDIT OR FOR FUTURE DELIVERY AS THE CANADIAN COLLATERAL AGENT SHALL DEEM
APPROPRIATE. THE CANADIAN COLLATERAL AGENT SHALL BE AUTHORIZED AT ANY SUCH SALE
OF SECURITIES (IF IT DEEMS IT ADVISABLE TO DO SO) TO RESTRICT THE PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING THE COLLATERAL FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A
VIEW TO THE DISTRIBUTION OR SALE THEREOF, AND UPON CONSUMMATION OF ANY SUCH SALE
THE CANADIAN COLLATERAL AGENT SHALL HAVE THE RIGHT TO ASSIGN, TRANSFER AND
DELIVER TO THE PURCHASER OR PURCHASERS THEREOF THE COLLATERAL SO SOLD. EACH SUCH
PURCHASER AT ANY SALE OF COLLATERAL SHALL HOLD THE PROPERTY SOLD ABSOLUTELY,
FREE FROM ANY CLAIM OR RIGHT ON THE PART OF GRANTOR, AND GRANTOR HEREBY WAIVES
(TO THE EXTENT PERMITTED BY LAW) ALL RIGHTS OF REDEMPTION, STAY AND APPRAISAL
WHICH GRANTOR NOW HAS OR MAY AT ANY TIME IN THE FUTURE HAVE UNDER ANY RULE OF
LAW OR STATUTE NOW EXISTING OR HEREAFTER ENACTED.

 

The Canadian Collateral Agent shall give Grantor 15 days’ written notice (which
Grantor agrees is reasonable notice) of the Canadian Collateral Agent’s
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker’s board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Canadian Collateral Agent may fix and state
in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Canadian Collateral Agent may (in its sole and absolute
discretion) determine. The Canadian Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Canadian Collateral Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for

 

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future delivery, the Collateral so sold may be retained by the Canadian
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Canadian Collateral Agent shall not incur any liability in case
any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be sold
again upon like notice. At any public (or, to the extent permitted by law,
private) sale made pursuant to this Agreement, any Secured Party may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay, valuation or appraisal on the part of Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to such Secured Party from Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Canadian Collateral Agent shall be free to carry out such
sale pursuant to such agreement and Grantor shall not be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Canadian Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Intercompany
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Canadian Collateral Agent may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the Collateral
or any portion thereof pursuant to a judgment or decree of a court or courts
having competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.

 

The Canadian Collateral Agent may, in addition to any other rights it may have,
appoint by instrument in writing a receiver or receiver and manager (both of
which are herein called a “Receiver”) of all or any part of the Collateral or
may institute proceedings in any court of competent jurisdiction for the
appointment of such a Receiver. Any such Receiver is hereby given and shall have
the same powers and rights and exclusions and limitations of liability as the
Canadian Collateral Agent has under this Agreement, at law or in equity. In
exercising any such powers, any such Receiver shall, to the extent permitted by
law, act as and for all purposes shall be deemed to be the agent of Grantor and
the Canadian Collateral Agent shall not be responsible for any act or default of
any such Receiver. The Canadian Collateral Agent may appoint one or more
Receivers hereunder and may remove any such Receiver or Receivers and appoint
another or others in his or their stead from time to time. Any Receiver so
appointed may be an officer or employee of the Canadian Collateral Agent. A
court need not appoint, ratify the appointment by the Canadian Collateral Agent
of or otherwise supervise in any manner the actions of any Receiver. Upon
Grantor receiving notice from the Canadian Collateral Agent of the taking of
possession of the Collateral or the appointment of a Receiver, all powers,
functions, rights and privileges of each of the directors and officers of
Grantor with respect to the Collateral shall, to the extent permitted by
applicable law, cease, unless specifically continued by the written consent of
the Canadian Collateral Agent.

 

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SECTION 4.02. APPLICATION OF PROCEEDS.  SUBJECT TO APPLICABLE LAWS, THE CANADIAN
COLLATERAL AGENT SHALL APPLY THE PROCEEDS OF ANY COLLECTION OR SALE OF ANY
COLLATERAL, AND ANY COLLATERAL CONSISTING OF CASH, AS FOLLOWS:

 

FIRST, to the payment of all costs and expenses incurred by the Canadian
Collateral Agent in connection with such collection or sale or otherwise in
connection with this Agreement, any other Intercompany Notes Document or any of
the Intercompany Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances made by
the Canadian Collateral Agent hereunder or under any other Intercompany Notes
Document on behalf of Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Intercompany Notes Document and any other amounts due to the Canadian Collateral
Agent under Section 5.03.

 

SECOND, to the payment in full of the other Intercompany Obligations secured by
such Collateral (the amounts so applied to be distributed among the applicable
Secured Parties pro rata in accordance with the amounts of such Intercompany
Obligations owed to them on the date of any such distribution); and

 

THIRD, to Grantor, its successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

 

The Canadian Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Canadian Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Canadian Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Canadian Collateral Agent or such officer or be answerable in any way for
the misapplication thereof.

 

SECTION 4.03. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY.  FOR THE PURPOSE OF
ENABLING THE CANADIAN COLLATERAL AGENT TO EXERCISE RIGHTS AND REMEDIES UNDER
THIS AGREEMENT AT SUCH TIME AS THE CANADIAN COLLATERAL AGENT SHALL BE LAWFULLY
ENTITLED TO EXERCISE SUCH RIGHTS AND REMEDIES, GRANTOR HEREBY GRANTS TO THE
CANADIAN COLLATERAL AGENT AN IRREVOCABLE, NONEXCLUSIVE LICENSE (EXERCISABLE
WITHOUT PAYMENT OF ROYALTY OR OTHER COMPENSATION TO GRANTOR) TO USE, LICENSE OR
SUBLICENSE ANY OF THE OTHER COLLATERAL CONSISTING OF INTELLECTUAL PROPERTY NOW
OWNED OR HEREAFTER ACQUIRED BY GRANTOR, AND WHEREVER THE SAME MAY BE LOCATED,
AND INCLUDING IN SUCH LICENSE REASONABLE ACCESS TO ALL MEDIA IN WHICH ANY OF THE
LICENSED ITEMS MAY BE RECORDED OR STORED AND TO ALL COMPUTER SOFTWARE AND
PROGRAMS USED FOR THE COMPILATION OR PRINTOUT THEREOF. THE RIGHTS CONFERRED BY
SUCH LICENSE MAY BE EXERCISED, AT THE OPTION OF THE CANADIAN COLLATERAL AGENT,
UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT; PROVIDED
THAT ANY LICENSE, SUBLICENSE OR OTHER TRANSACTION ENTERED INTO BY THE CANADIAN

 

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COLLATERAL AGENT IN ACCORDANCE HEREWITH SHALL BE BINDING UPON GRANTOR
NOTWITHSTANDING ANY SUBSEQUENT CURE OF AN EVENT OF DEFAULT.

 

SECTION 4.04. SECURITIES ACT

 

In view of the position of Grantor in relation to the Pledged Collateral, or
because of other current or future circumstances, a question may arise under the
Securities Act (Ontario), or any similar statute in any other applicable
jurisdiction hereafter enacted analogous in purpose or effect (the Securities
Act and any such similar statute as from time to time in effect being called the
“Securities Laws”) with respect to any disposition of the Pledged Collateral
permitted hereunder. Grantor understands that compliance with the Securities
Laws might very strictly limit the course of conduct of the Canadian Collateral
Agent if the Canadian Collateral Agent were to attempt to dispose of all or any
part of the Pledged Collateral, and might also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Collateral could
dispose of the same. Grantor recognizes that in light of such restrictions and
limitations the Canadian Collateral Agent may, with respect to any sale of the
Pledged Collateral, limit the purchasers to those who will agree, among other
things, to acquire such Pledged Collateral for their own account, for
investment, and not with a view to the distribution or resale thereof. Grantor
acknowledges and agrees that in light of such restrictions and limitations, the
Canadian Collateral Agent, in its sole and absolute discretion (a) may proceed
to make such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Securities Laws and (b) may approach and negotiate with a single potential
purchaser to effect such sale. Grantor acknowledges and agrees that any such
sale might result in prices and other terms less favorable to the seller than if
such sale were a public sale without such restrictions. In the event of any such
sale, the Canadian Collateral Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the
Canadian Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this Section will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Canadian Collateral Agent sells.

 

SECTION 4.05. Registration.Grantor agrees that, upon the occurrence and during
the continuance of an Event of Default, if for any reason the Canadian
Collateral Agent desires to sell any of the Pledged Collateral at a public sale,
it will, at any time and from time to time, upon the written request of the
Canadian Collateral Agent, use its best efforts to take or to cause the issuer
of such Pledged Collateral to take such action and prepare, distribute and/or
file such documents, as are required or advisable in the reasonable opinion of
counsel for the Canadian Collateral Agent to permit the public sale of such
Pledged Collateral. Grantor further agrees to indemnify, defend and hold
harmless the Canadian Collateral Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including, without limitation,

 

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reasonable fees and expenses to the Canadian Collateral Agent of legal counsel),
and claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in thereof not
misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to Grantor or
the issuer of such Pledged Collateral by the Canadian Collateral Agent or any
other Secured Party expressly for use therein. Grantor further agrees, upon such
written request referred to above, to use its best efforts to qualify, file or
register, or cause the issuer of such Pledged Collateral to qualify, file or
register, any of the Pledged Collateral under applicable securities laws of such
states or provinces as may be requested by the Canadian Collateral Agent and
keep effective, or cause to be kept effective, all such qualifications, filings
or registrations. Grantor will bear all costs and expenses of carrying out its
obligations under this Section. Grantor acknowledges that there is no adequate
remedy at law for failure by it to comply with the provisions of this Section
and that such failure would not be adequately compensable in damages, and
therefore agrees that its agreements contained in this Section may be
specifically enforced.

 

ARTICLE V

 

MISCELLANEOUS

 

SECTION 5.01. Notices.All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile as follows:

 

If to the Canadian Collateral Agent:

 

BNY Trust Company of Canada

Suite 1101

4 King Street West

Toronto, Ontario M5H 1B6

 

Attention:         Senior Trust Officer

Facsimile:         416-360-1711 or 469-360-1727

 

If to the Grantor:

 

c/o Symmetry Holdings Inc.

28 West 44th Street, 16th Floor

New York, New York 10036

 

Attention:         General Counsel

Facsimile:         (646) 429-1541

 

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SECTION 5.02. Waivers; Amendment.(a) No failure or delay by the Canadian
Collateral Agent, or any other Secured Party in exercising any right or power
hereunder or under any other Intercompany Notes Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Canadian Collateral Agent,
and the other Secured Parties hereunder and under the other Intercompany Notes
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or any
other Intercompany Notes Document or consent to any departure by Grantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on Grantor in any case shall entitle Grantor to any other or
further notice or demand in similar or other circumstances.

 

(b)           Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Canadian Collateral Agent and Grantor with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required under the Financing Documents. The Canadian Collateral Agent shall
enter into such waivers, amendments or modifications of this Agreement as it may
be directed (subject to the immediately preceding sentence) to enter into by the
Collateral Agent; provided that the Canadian Collateral Agent shall not be
obligated to execute any such waiver, amendment or modification that adversely
affects the rights, duties, liabilities or immunities of the Canadian Collateral
Agent.

 

SECTION 5.03. CANADIAN COLLATERAL AGENT’S FEES AND EXPENSES; INDEMNIFICATION.
(A) GRANTOR AGREES TO PAY ALL REASONABLE OUT-OF-POCKET EXPENSES INCURRED BY THE
CANADIAN COLLATERAL AGENT, INCLUDING THE REASONABLE FEES, CHARGES AND
DISBURSEMENTS OF ITS COUNSEL, IN CONNECTION WITH (I) THE PREPARATION, EXECUTION,
DELIVERY AND ADMINISTRATION OF THIS AGREEMENT AND ANY OTHER SECURITY DOCUMENT,
(II) THE CUSTODY OR PRESERVATION OF, OR THE SALE OF, COLLECTION FROM OR OTHER
REALIZATION UPON ANY OF THE COLLATERAL, (III) THE EXERCISE, ENFORCEMENT OR
PROTECTION OF ANY OF THE RIGHTS OF THE COLLATERAL AGENT HEREUNDER OR UNDER ANY
OTHER SECURITY DOCUMENT OR (IV) THE FAILURE OF GRANTOR TO PERFORM OR OBSERVE ANY
OF THE PROVISIONS HEREOF.

 

(b)           Without limitation of its indemnification obligations under the
other Intercompany Notes Documents, Grantor agrees to indemnify the Canadian
Collateral Agent, its Affiliates and their respective officers, directors,
employees, agents and representatives (the “Indemnitees”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of, the execution, delivery or
performance of this Agreement or any claim, litigation, investigation or
proceeding relating to any of the foregoing, or any agreement or instrument
contemplated hereby, or to the Collateral, whether or not any Indemnitee is a
party thereto; provided

 

30

--------------------------------------------------------------------------------

 

that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee or any of its Affiliates.

 

(c)           Any such amounts payable as provided hereunder shall be additional
Intercompany Obligations secured hereby and by the other Intercompany Note
Security Documents. The provisions of this Section shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Intercompany Notes Document, the consummation of the transactions
contemplated hereby, the repayment of any of the Intercompany Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Intercompany Document, or any investigation made by or on behalf of the
Canadian Collateral Agent or any other Secured Party. All amounts due under this
Section shall be payable on written demand therefor.

 

SECTION 5.04. SUCCESSORS AND ASSIGNS. WHENEVER IN THIS AGREEMENT ANY OF THE
PARTIES HERETO IS REFERRED TO, SUCH REFERENCE SHALL BE DEEMED TO INCLUDE THE
PERMITTED SUCCESSORS AND ASSIGNS OF SUCH PARTY; AND ALL COVENANTS, PROMISES AND
AGREEMENTS BY OR ON BEHALF OF GRANTOR OR THE CANADIAN COLLATERAL AGENT THAT ARE
CONTAINED IN THIS AGREEMENT SHALL BIND AND INURE TO THE BENEFIT OF THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS.

 

SECTION 5.05. SURVIVAL OF AGREEMENT. ALL COVENANTS, AGREEMENTS, REPRESENTATIONS
AND WARRANTIES MADE BY GRANTOR IN THE INTERCOMPANY NOTES DOCUMENTS AND IN THE
CERTIFICATES OR OTHER INSTRUMENTS PREPARED OR DELIVERED IN CONNECTION WITH OR
PURSUANT TO THIS AGREEMENT OR ANY OTHER INTERCOMPANY NOTES DOCUMENT SHALL BE
CONSIDERED TO HAVE BEEN RELIED UPON BY THE SECURED PARTIES AND SHALL SURVIVE THE
EXECUTION AND DELIVERY OF THE INTERCOMPANY NOTES DOCUMENTS ISSUANCE OF THE
SECURITIES, REGARDLESS OF ANY INVESTIGATION MADE BY ANY SECURED PARTY OR ON ITS
BEHALF AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL THIS, AGREEMENT SHALL
TERMINATE.

 

SECTION 5.06. COUNTERPARTS; EFFECTIVENESS; SEVERAL AGREEMENT. THIS AGREEMENT MAY
BE EXECUTED IN COUNTERPARTS, EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL BUT ALL
OF WHICH WHEN TAKEN TOGETHER SHALL CONSTITUTE A SINGLE CONTRACT. DELIVERY OF AN
EXECUTED SIGNATURE PAGE TO THIS AGREEMENT BY FACSIMILE OR ELECTRONIC
TRANSMISSION SHALL BE AS EFFECTIVE AS DELIVERY OF A MANUALLY SIGNED COUNTERPART
OF THIS AGREEMENT. THIS AGREEMENT SHALL BECOME EFFECTIVE AS TO GRANTOR WHEN A
COUNTERPART HEREOF EXECUTED ON BEHALF OF GRANTOR SHALL HAVE BEEN DELIVERED TO
THE CANADIAN COLLATERAL AGENT AND A COUNTERPART HEREOF SHALL HAVE BEEN EXECUTED
ON BEHALF OF THE CANADIAN COLLATERAL AGENT, AND THEREAFTER SHALL BE BINDING UPON
GRANTOR AND THE CANADIAN COLLATERAL AGENT AND THEIR RESPECTIVE PERMITTED
SUCCESSORS AND ASSIGNS, AND SHALL INURE TO THE BENEFIT OF GRANTOR, THE CANADIAN
COLLATERAL AGENT AND THE OTHER SECURED PARTIES AND THEIR RESPECTIVE SUCCESSORS
AND ASSIGNS, EXCEPT THAT GRANTOR SHALL NOT HAVE THE RIGHT TO ASSIGN OR TRANSFER
ITS RIGHTS OR OBLIGATIONS HEREUNDER OR ANY INTEREST HEREIN OR IN THE COLLATERAL
(AND ANY SUCH ASSIGNMENT OR TRANSFER SHALL BE VOID) EXCEPT AS EXPRESSLY PROVIDED
IN THIS AGREEMENT OR THE FINANCING DOCUMENTS.

 

31

--------------------------------------------------------------------------------

 

SECTION 5.07. SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT HELD TO BE INVALID,
ILLEGAL OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE
INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY
WITHOUT AFFECTING THE VALIDITY, LEGALITY AND ENFORCEABILITY OF THE REMAINING
PROVISIONS HEREOF; AND THE INVALIDITY OF A PARTICULAR PROVISION IN A PARTICULAR
JURISDICTION SHALL NOT INVALIDATE SUCH PROVISION IN ANY OTHER JURISDICTION. THE
PARTIES SHALL ENDEAVOR IN GOOD-FAITH NEGOTIATIONS TO REPLACE THE INVALID,
ILLEGAL OR UNENFORCEABLE PROVISIONS WITH VALID PROVISIONS THE ECONOMIC EFFECT OF
WHICH COMES AS CLOSE AS POSSIBLE TO THAT OF THE INVALID, ILLEGAL OR
UNENFORCEABLE PROVISIONS.

 

SECTION 5.08. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE PROVINCE OF
ONTARIO, AND THE LAWS OF CANADA APPLICABLE THEREIN.

 

(b)                                 Grantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the Province of Ontario or Quebec, the courts of
Canada, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Intercompany Security
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Province. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Intercompany Notes Document shall affect
any right that the Canadian Collateral Agent, or any other Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Intercompany Notes Document against Grantor, or its properties in the
courts of any jurisdiction.

 

(c)                                  Grantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Intercompany Notes Document in any court referred to in paragraph (b)
of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

(d)                                 Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 5.01. Nothing in this Agreement or any other Intercompany Notes Document
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

 

SECTION 5.09. JUDGMENT CURRENCY.

 

(a)                                  The obligations of any party to this
Agreement hereunder and under the other Intercompany Notes Document to make
payments in Canadian Dollars or in US Dollars,

 

32

--------------------------------------------------------------------------------

 

as the case may be (for the purposes of this Section, the “Intercompany
Obligation Currency”), shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Intercompany Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Canadian Collateral
Agent or a Secured Party of the full amount of the Intercompany Obligation
Currency expressed to be payable to the Canadian Collateral Agent or a Secured
Party under this Agreement or the other Intercompany Notes Documents. If, for
the purpose of obtaining or enforcing judgment against any party to this
Agreement or any Secured Parties in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Intercompany
Obligation Currency (for the purposes of this Section, such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Intercompany Obligation Currency, the conversion shall be made, at the rate of
exchange prevailing, in each case, as of the date immediately preceding the day
on which the judgment is given (for the purposes of this Section, such Business
Day being hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b)                                 If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, Grantor covenants and agrees to pay, or cause to be
paid, such additional amounts, if any (but in any event not a lesser amount), as
may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Intercompany Obligation Currency which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or
judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

 

(c)                                  For purposes of determining the prevailing
rate of exchange, such amounts shall include any premium and costs payable in
connection with the purchase of the Intercompany Obligation Currency.

 

SECTION 5.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER INTERCOMPANY NOTES DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

33

--------------------------------------------------------------------------------

 

SECTION 5.11. HEADINGS.  ARTICLE AND SECTION HEADINGS AND THE TABLE OF CONTENTS
USED HEREIN ARE FOR CONVENIENCE OF REFERENCE ONLY, ARE NOT PART OF THIS
AGREEMENT AND ARE NOT TO AFFECT THE CONSTRUCTION OF, OR TO BE TAKEN INTO
CONSIDERATION IN INTERPRETING, THIS AGREEMENT.

 

SECTION 5.12. SECURITY INTEREST ABSOLUTE.  ALL RIGHTS OF THE CANADIAN COLLATERAL
AGENT HEREUNDER, THE SECURITY INTEREST, THE GRANT OF A SECURITY INTEREST IN THE
PLEDGED COLLATERAL AND ALL OBLIGATIONS OF GRANTOR HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL IRRESPECTIVE OF (A) ANY LACK OF VALIDITY OR ENFORCEABILITY OF
THE FINANCING DOCUMENTS, ANY OTHER INTERCOMPANY NOTES DOCUMENT, ANY AGREEMENT
WITH RESPECT TO ANY OF THE INTERCOMPANY OBLIGATIONS OR ANY OTHER AGREEMENT OR
INSTRUMENT RELATING TO ANY OF THE FOREGOING, (B) ANY CHANGE IN THE TIME, MANNER
OR PLACE OF PAYMENT OF, OR IN ANY OTHER TERM OF, ALL OR ANY OF THE INTERCOMPANY
OBLIGATIONS, OR ANY OTHER AMENDMENT OR WAIVER OF OR ANY CONSENT TO ANY DEPARTURE
FROM THE FINANCING DOCUMENTS, ANY OTHER INTERCOMPANY NOTES DOCUMENT OR ANY OTHER
AGREEMENT OR INSTRUMENT, (C) ANY EXCHANGE, RELEASE OR NON-PERFECTION OF ANY LIEN
ON OTHER COLLATERAL, OR ANY RELEASE OR AMENDMENT OR WAIVER OF OR CONSENT UNDER
OR DEPARTURE FROM ANY GUARANTEE, SECURING OR GUARANTEEING ALL OR ANY OF THE
INTERCOMPANY OBLIGATIONS, OR (D) ANY OTHER CIRCUMSTANCE THAT MIGHT OTHERWISE
CONSTITUTE A DEFENSE AVAILABLE TO, OR A DISCHARGE OF, GRANTOR IN RESPECT OF THE
INTERCOMPANY OBLIGATIONS OR THIS AGREEMENT.

 

SECTION 5.13. TERMINATION OR RELEASE.

 

(a)                                  This Security Interest and all other
security interests granted hereby shall terminate when all the Intercompany
Obligations (other than contingent obligations) have been indefeasibly paid in
full pursuant to the terms thereof and not in violation of any restriction set
forth in any Financing Document.

 

(b)                                 Upon any sale or other transfer by the
Grantor of any Collateral, which sale or transfer is permitted under this
Agreement and each of the Financing Documents, or upon a sale or other
disposition of the ABL Collateral permitted pursuant to the terms of the
Intercreditor Agreement, or upon the effectiveness of any written direction to
release of such Lien by the Collateral Agent, the security interest and Lien
created in such Collateral under each of the Intercompany Note Security
Documents shall be automatically released. In connection with any release
pursuant to this Section, the Canadian Collateral Agent shall execute and
deliver to the Grantor and the Collateral Agent, at the Grantor’s expense, all
documents that the Grantor or Collateral Agent shall reasonably request to
evidence such release; provided however, that the Canadian Collateral Agent
shall not be required to execute or deliver any such documents unless it shall
have been directed to do so by the Collateral Agent. Any such execution and
delivery of documents pursuant to this Section shall be without recourse to or
warranty by the Canadian Collateral Agent.

 

SECTION 5.14. CANADIAN COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.  GRANTOR
HEREBY APPOINTS THE CANADIAN COLLATERAL AGENT THE ATTORNEY-IN-FACT OF GRANTOR
FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THIS AGREEMENT AND TAKING ANY
ACTION AND EXECUTING ANY INSTRUMENT THAT THE CANADIAN COLLATERAL AGENT MAY DEEM

 

34

--------------------------------------------------------------------------------

 

NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES HEREOF, WHICH APPOINTMENT IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE CANADIAN COLLATERAL AGENT SHALL HAVE THE RIGHT, UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, WITH FULL POWER OF
SUBSTITUTION EITHER IN THE CANADIAN COLLATERAL AGENT’S NAME OR IN THE NAME OF
GRANTOR (A) TO RECEIVE, ENDORSE, ASSIGN OR DELIVER ANY AND ALL NOTES,
ACCEPTANCES, CHECKS, DRAFTS, MONEY ORDERS OR OTHER EVIDENCES OF PAYMENT RELATING
TO THE COLLATERAL OR ANY PART THEREOF; (B) TO DEMAND, COLLECT, RECEIVE PAYMENT
OF, GIVE RECEIPT FOR AND GIVE DISCHARGES AND RELEASES OF ALL OR ANY OF THE
COLLATERAL; (C) TO SIGN THE NAME OF GRANTOR ON ANY INVOICE OR BILL OF LADING
RELATING TO ANY OF THE COLLATERAL; (D) TO SEND VERIFICATIONS OF ACCOUNTS
RECEIVABLE TO ANY ACCOUNT DEBTOR; (E) TO COMMENCE AND PROSECUTE ANY AND ALL
SUITS, ACTIONS OR PROCEEDINGS AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT
JURISDICTION TO COLLECT OR OTHERWISE REALIZE ON ALL OR ANY OF THE COLLATERAL OR
TO ENFORCE ANY RIGHTS IN RESPECT OF ANY COLLATERAL; (F) TO SETTLE, COMPROMISE,
COMPOUND, ADJUST OR DEFEND ANY ACTIONS, SUITS OR PROCEEDINGS RELATING TO ALL OR
ANY OF THE COLLATERAL; (G) TO NOTIFY, OR TO REQUIRE GRANTOR TO NOTIFY, ACCOUNT
DEBTORS TO MAKE PAYMENT DIRECTLY TO THE CANADIAN COLLATERAL AGENT; AND (H) TO
USE, SELL, ASSIGN, TRANSFER, PLEDGE, MAKE ANY AGREEMENT WITH RESPECT TO OR
OTHERWISE DEAL WITH ALL OR ANY OF THE COLLATERAL, AND TO DO ALL OTHER ACTS AND
THINGS NECESSARY TO CARRY OUT THE PURPOSES OF THIS AGREEMENT, AS FULLY AND
COMPLETELY AS THOUGH THE CANADIAN COLLATERAL AGENT WERE THE ABSOLUTE OWNER OF
THE COLLATERAL FOR ALL PURPOSES; PROVIDED THAT NOTHING HEREIN CONTAINED SHALL BE
CONSTRUED AS REQUIRING OR OBLIGATING THE CANADIAN COLLATERAL AGENT TO MAKE ANY
COMMITMENT OR TO MAKE ANY INQUIRY AS TO THE NATURE OR SUFFICIENCY OF ANY PAYMENT
RECEIVED BY THE CANADIAN COLLATERAL AGENT, OR TO PRESENT OR FILE ANY CLAIM OR
NOTICE, OR TO TAKE ANY ACTION WITH RESPECT TO THE COLLATERAL OR ANY PART THEREOF
OR THE MONEYS DUE OR TO BECOME DUE IN RESPECT THEREOF OR ANY PROPERTY COVERED
THEREBY. THE CANADIAN COLLATERAL AGENT AND THE OTHER SECURED PARTIES SHALL BE
ACCOUNTABLE ONLY FOR AMOUNTS ACTUALLY RECEIVED AS A RESULT OF THE EXERCISE OF
THE POWERS GRANTED TO THEM HEREIN, AND NEITHER THEY NOR THEIR OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS SHALL BE RESPONSIBLE TO GRANTOR FOR ANY ACT OR
FAILURE TO ACT HEREUNDER, EXCEPT FOR THEIR OWN GROSS NEGLIGENCE OR WILFUL
MISCONDUCT.

 

SECTION 5.15. INTERCREDITOR AGREEMENT.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY: (A) THE LIENS GRANTED TO THE CANADIAN COLLATERAL AGENT OR ANY AGENT OR
TRUSTEE THEREOF UNDER THIS AGREEMENT OR ANY OTHER INTERCOMPANY NOTE SECURITY
DOCUMENT ON THE ABL COLLATERAL SHALL BE JUNIOR AND SUBORDINATED IN ALL RESPECTS
TO ALL LIENS OF THE REVOLVING CREDIT AGENT (AS DEFINED UNDER THE INTERCREDITOR
AGREEMENT) OR ANY AGENT OR TRUSTEE THEREOF IN THE ABL COLLATERAL, AND (B) THE
EXERCISE OF THE RIGHTS AND REMEDIES OF THE CANADIAN COLLATERAL AGENT HEREUNDER
ARE OTHERWISE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT BINDING
ON THE COLLATERAL AGENT AND THE SENIOR NOTES SECURED PARTIES (AS DEFINED IN THE
INTERCREDITOR AGREEMENT). IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE
INTERCREDITOR AGREEMENT AND THIS AGREEMENT OR ANY OTHER INTERCOMPANY NOTE
SECURITY DOCUMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND
CONTROL. AT ANY TIME PRIOR TO THE DISCHARGE OF CANADIAN REVOLVING CREDIT
OBLIGATIONS (AS DEFINED IN THE INTERCREDITOR AGREEMENT), NO GRANTOR SHALL BE
REQUIRED TO TAKE OR REFRAIN FROM TAKING ANY ACTION AT THE REQUEST OF THE
CANADIAN COLLATERAL AGENT WITH RESPECT TO ANY ABL COLLATERAL IF SUCH ACTION OR
INACTION WOULD BE INCONSISTENT

 

35

--------------------------------------------------------------------------------

 

WITH (I) ANY ACTION OR INACTION AFFIRMATIVELY REQUESTED BY THE REVOLVING CREDIT
AGENT (AS DEFINED IN THE INTERCREDITOR AGREEMENT) OR ANY AGENT OR TRUSTEE
THEREOF OR (II) ANY ACTION OR INACTION AFFIRMATIVELY REQUIRED BY ANY OF THE
PROVISIONS OF THE REVOLVING CREDIT AGREEMENT (AS DEFINED IN THE INTERCREDITOR
AGREEMENT).

 

SECTION 5.16. ACKNOWLEDGMENTS.

 

Grantor acknowledges that all right title and interest of the Company in and
under this Agreement is, simultaneous with its execution and delivery to the
Canadian Collateral Agent, subject to a Lien granted by the Company to secure
the Financing Document Obligations. The Collateral Agent, on behalf of the
Secured Parties (as defined in the Collateral Agreement) is a third party
beneficiary of this Agreement and may enforce this Agreement against Grantor to
the extent set forth in the Financing Documents and the Collateral Agreement.
Grantor further acknowledges that it has received a copy of the Financing
Documents. The Canadian Collateral Agent shall not be obligated to take any
action under this Agreement or any other Intercompany Note Security Document
except for the performance of such duties and obligations as are specifically
set forth herein or in such other Intercompany Note Security Document. The
Canadian Collateral Agent shall take only such enforcement actions and exercise
remedies hereunder and under the other Intercompany Note Security Documents as
it is from time to time directed, in writing, to take or exercise by the
Collateral Agent (as pledgee of the Intercompany Notes pursuant to the
Collateral Agreement), provided that such actions or such exercise of remedies
is not inconsistent with or contrary to the provisions of this Agreement.

 

36

--------------------------------------------------------------------------------

 

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

 

 

 

NOVAMERICAN STEEL INC.

 

 

 

 

 

 

 

By:

/s/ Corrado De Gasperis

 

 Name: Corrado De Gasperis

 

 Title: President

 

37

--------------------------------------------------------------------------------

 

 

BNY TRUST COMPANY OF CANADA, AS

 

CANADIAN COLLATERAL AGENT

 

 

 

 

 

 

 

By:

/s/ Patricia Benjamin

 

Name: Patricia Benjamin

 

Title: Authorized Officer

 

38

--------------------------------------------------------------------------------

 

Schedule I to the

Intercompany Note

Security Agreement

 

PLEDGED EQUITY INTERESTS; DEBT SECURITIES

EQUITY INTERESTS

 

Issuer

 

Number of
Certificate

 

Registered
Owner

 

Number and
Class of
Equity Interest

 

Percentage
of Equity Interests

632422 N.B. Ltd.

 

3

 

Novamerican Steel Inc.

 

1 share of Common Stock

 

100%

 

 

DEBT SECURITIES

 

Issuer

 

Principal
Amount

 

Date of Note

 

Maturity Date

American Steel and Aluminum Coporation

 

US$

33,400,000.00

 

December 5, 2006

 

On Demand

 

 

 

 

 

 

 

Nova Tube and Steel Inc.

 

US$

11,600,000.00

 

December 5, 2006

 

On Demand

 

--------------------------------------------------------------------------------

 

Schedule II to the

Intercompany Note

Security Agreement

 

INTELLECTUAL PROPERTY

COPYRIGHTS OWNED BY GRANTOR

 

Canadian Copyright Registrations

 

None

 

Pending Canadian Copyright Applications for Registration

 

None

 

Non- Canadian Copyright Registrations

 

None

 

Non- Canadian Pending Copyright Applications for Registration

 

None

 

--------------------------------------------------------------------------------

 

Schedule II to the

Canadian Collateral

Agreement

 

LICENSES

 

I. Licenses/Sublicensees Grantor as Licensor on Date Hereof

 

A.  Copyrights

 

Canadian Copyrights

 

None

 

Non- Canadian Copyrights

 

None

 

B.  Patents

 

Canadian Patents

 

None

 

Canadian Patent Applications

 

None

 

Non-Canadian Patents

 

None

 

Non-Canadian Patent Applications

 

None

 

--------------------------------------------------------------------------------

 

C.  Trademarks

 

Canadian Trademarks

 

None

 

Canadian Trademark Applications

 

None

 

Non-Canadian Trademarks

 

None

 

Non-Canadian Trademark Applications

 

None

 

D.  Others

 

None

 

--------------------------------------------------------------------------------

 

II. Licensees/Sublicenses of Grantor as Licensee on Date Hereof

 

A.  Copyrights

 

Canadian Copyrights

 

None

 

Non-Canadian Copyrights

 

None

 

B.  Patents

 

Canadian Patents

 

None

 

Canadian Patent Applications

 

None

 

Non-Canadian Patents

 

None

 

Non-Canadian Patent Applications

 

None

 

C.  Trademarks

 

Canadian Trademarks

 

None

 

Canadian Trademark Applications

 

None

 

Non-Canadian Trademarks

 

None

 

--------------------------------------------------------------------------------

 

Non-Canadian Trademark Applications

 

None

 

D.  Others

 

None

 

--------------------------------------------------------------------------------

 

PATENTS OWNED BY NAME OF GRANTOR

 

Canadian Patent Registrations

 

OWNER

 

REGISTRATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

Novamerican Steel
Inc. / Acier

Novamerican Inc.(1)

 

CA 2298865

 

Impact blow actuated pneumatic fastener driving tool

 

NOTE:

 

--------------------------------------------------------------------------------

(1) Was filed in the name of Industries Cresswell Inc.

 

Canadian Patent Applications

 

OWNER

 

APPLICATION
NUMBER

 

DESCRIPTION

 

 

 

 

 

Novamerican Steel
Inc. / Acier
Novamerican Inc.(1)

 

CA 2535104

 

Cargo Restraint System

Novamerican Steel
Inc. / Acier

Novamerican Inc.(1)

 

CA 2517798

 

Nailer with ratchet-provided plunger mechanism

 

NOTE:

 

--------------------------------------------------------------------------------

(1) Was filed in the name of Industries Cresswell Inc.

 

Non-Canadian Patent Registrations

 

None

 

Non-Canadian Patent Applications

 

None

 

--------------------------------------------------------------------------------

 

TRADEMARK/TRADE NAMES OWNED BY

 

Canadian Trademark Registrations

 

OWNER

 

REGISTRATION
NUMBER

 

TRADEMARK

 

 

 

 

 

Novamerican Steel
Inc. / Acier

Novamerican Inc.(1)

 

TMA373,515 (Canada)

 

[g297191my03i001.gif]

 

NOTE:

 

--------------------------------------------------------------------------------

(1) Filed in the name of Cresswell Roll Forming Inc. / Profilage Cresswell Inc.

 

Canadian Trademark Applications

 

None

 

State Trademark Registrations

 

None

 

Non-Canadian Trademark Registrations

 

OWNER

 

REGISTRATION
NUMBER

 

TRADEMARK

 

 

 

 

 

Novamerican Steel
Inc. / Acier
Novamerican Inc.

 

2,314,474

 

NOVAMERICAN

 

Non-Canadian Trademark Applications

 

OWNER

 

APPLICATION
NUMBER

 

TRADEMARK

 

 

 

 

 

Nova Steel Ltd.

 

Abandoned

 

NOVAMERICAN

 

--------------------------------------------------------------------------------

 

Trade Names

 

None

 

--------------------------------------------------------------------------------

 

Exhibit I to the

Canadian Collateral

Agreement

 

FORM OF PERFECTION CERTIFICATE

 

Reference is made to (a) the Bridge Loan Agreement dated as of November [15],
2007 (as amended, supplemented or otherwise modified from time to time, the
“Bridge Loan Agreement”), among Symmetry Holdings Inc. (“Symmetry”), Novamerican
Steel Finco Inc. (the “Borrower”), the lenders from time to time party thereto
(the “Lenders”), CIBC World Markets Corp., as Syndication Agent, JPMorgan Chase
Bank, N.A., as Administrative Agent (the “Administrative Agent”), and The Bank
of New York, as Collateral Agent (the “Collateral Agent”), and (b) the Guarantee
and Collateral Agreement dated as of November [15], 2007 (the “Collateral
Agreement”) among Symmetry, the Borrower, the subsidiaries of Symmetry party
thereto and the Collateral Agent. Capitalized terms used but not defined herein
have the meanings assigned in the Credit Agreement or the Collateral Agreement,
as applicable.

 

The undersigned, a Financial Officer, of Symmetry and each Borrower, hereby
certifies to the Administrative Agent and each other Secured Party as follows:

 

1.  Names. (a)   The exact legal name of each Grantor, as such name appears in
its respective certificate of organization, is as follows:

 

(b)  Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:

 

(c)  Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way within the past five years. Changes
in identity or corporate structure would include mergers, amalgamations,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of organization. If any such change has occurred, include in
Schedule 1 the information required by Sections 1 and 2 of this certificate as
to each acquiree or constituent party to a merger, amalgamation or
consolidation.

 

(d)  The following is a list of all other names (including trade names or
similar appellations) used by each Grantor or any of its divisions or other
business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years:

 

--------------------------------------------------------------------------------

 

Exhibit III to the

Canadian Collateral

Agreement

 

(e)  Set forth below is the Organizational Identification Number, if any, issued
by the jurisdiction of organization of each Grantor that is a registered
organization:

 

(f)  Set forth below is the Federal Taxpayer Identification Number (if
available) of each Grantor:

 

2.  Current Locations. (a)  The chief executive office of each Grantor is
located at the address set forth opposite its name below:

 

Grantor

 

Mailing Address

 

County

 

State / Province /
Territory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)  Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts Receivable
(with each location at which chattel paper, if any, is kept being indicated by
an “*”):

 

Grantor

 

Mailing Address

 

County

 

State / Province /

Territory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)  The jurisdiction of formation of each Grantor that is a registered
organization is set forth opposite its name below:

 

Grantor

 

Jurisdiction

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Equipment or other Collateral not identified
above:

 

Grantor

 

Mailing Address

 

County

 

State / Province /
Territory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e)  Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:

 

Grantor

 

Mailing Address

 

County

 

State/Province/
Territory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(f) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession of any of
the Collateral of such Grantor:

 

Grantor

 

Mailing Address

 

County

 

State/Province/
Territory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.  Unusual Transactions. All Accounts have been originated by the Grantors and
all Inventory has been acquired by the Grantors in the ordinary course of
business.

 

4.  File Search Reports. File search reports with respect to each Grantor
organized or maintaining an establishment in a jurisdiction in the United States
or Canada or having assets located in a jurisdiction in Canada have been
obtained from the appropriate Uniform Commercial Code filing office (or other
personal property security registry office) in each jurisdiction identified with
respect to such Grantor in Section 2 hereof, and such search reports reflect no
liens against any of the Collateral other than those permitted under the Credit
Agreement.

 

5.  Filings. Financing statements in appropriate form have been prepared for
filing in the proper Uniform Commercial Code filing office in each jurisdiction
in the United States in which any Grantor is organized and, to the extent any of
the collateral is comprised of fixtures, timber to be cut or as extracted
collateral from the wellhead or minehead, in the proper local jurisdiction, in
each case as set forth with respect to such Grantor in Section 2 hereof.
Personal Property Security Act [(Ontario)] (“PPSA”) filings or other applicable
personal property security filings

 

--------------------------------------------------------------------------------

 

have been prepared for filing in proper personal property security filing
offices in the proper local jurisdiction, in each case as set forth with respect
to such Grantor in Section 2.

 

6.  Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.

 

7.  Stock Ownership and other Equity Interests. Attached hereto as Schedule 7 is
a true and correct list of all the issued and outstanding Equity Interest of the
Borrower and each other Subsidiary and the record and beneficial owners of such
Equity Interests. Also set forth on Schedule 7 is each equity investment of
Symmetry, the Borrower or any Subsidiary that represents 50% or more of the
equity of the entity in which such investment was made.

 

8.  Debt Instruments. Attached hereto as Schedule 8 is a true and correct list
of all promissory notes and other evidence of indebtedness held by Symmetry, the
Borrower and each other Subsidiary that are required to be pledged under the
Collateral Agreement, the [Intercompany Note Collateral Agreement] or any other
collateral agreement, including all intercompany notes between Symmetry, the
Borrower and each other Subsidiary and each Subsidiary and any other Subsidiary.

 

9.  Advances. Attached hereto as Schedule 9 is a true and correct list of all
advances made by Symmetry or the Borrower to any other Subsidiary or made by any
Subsidiary to Symmetry, the Borrower or any other Subsidiary (other than those
identified on Schedule 8), which advances will be on and after the date hereof
evidenced by one or more intercompany notes pledged to the Administrative Agent
under the Collateral Agreement, the [Intercompany Note Collateral Agreement] or
any other collateral agreement.

 

10.  Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting
forth, with respect to each Mortgaged Property, (a) the exact name of the Person
that owns such property as such name appears in its certificate of incorporation
or other organizational document, (b) if different from the name identified
pursuant to clause (a), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause (or the registered owner of such
property), (c) the filing office in which a Mortgage with respect to such
property must be filed or recorded in order for the Administrative Agent to
obtain a perfected security interest therein, (d) the legal description of such
property and (e) the municipal address of such property.

 

11.  Intellectual Property. Attached hereto as Schedule 11(A) in proper form for
filing with the United States Patent and Trademark Office or the Canadian
Intellectual Property Office, as applicable, is a schedule setting forth all of
each Grantor’s Patents and Patent Applications, including the name of the
registered owner, type, registration or application number and the expiration
date (if already registered) of each Patent and Patent Application owned by any
Grantor.

 

Attached hereto as Schedule 11(B) in proper form for filing with the United
States Patent and Trademark Office or the Canadian Intellectual Property Office,
as applicable, is a schedule setting forth all of each Grantor’s Trademarks and
Trademark Applications, including the name of the registered owner, the
registration or application number and the expiration date (if already
registered) of each Trademark and Trademark application owned by any Grantor.

 

--------------------------------------------------------------------------------

 

Attached hereto as Schedule 11(C) in proper form for filing with the United
States Copyright Office or the Canadian Intellectual Property Office, as
applicable, is a schedule setting forth all of each Grantor’s Copyrights
(including the name of the registered owner, title and the registration number)
and Copyright Applications (including the name of the registered owner and
title) of each Copyright or Copyright Application owned by any Grantor.

 

12.  Commercial Tort Claims. Attached hereto as Schedule 12 is a true and
correct list of commercial tort claims in excess of $1,000,000 held by any
Grantor, including a brief description thereof.

 

13.  Deposit Accounts. Attached hereto as Schedule 13 is a true and correct list
of deposit accounts maintained by each Grantor, including the name and address
of the depositary institution, the type of account and the account number.

 

14. Securities Accounts. Attached hereto as Schedule 14 is a true and correct
list of securities accounts maintained by each Grantor, including the name and
address of the intermediary institution, the type of account and the account
number.

 

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FORM OF PATENT AND TRADEMARK SECURITY AGREEMENT, dated as of [l], 2007, among
NOVAMERICAN STEEL INC. (“Grantor”) and BNY TRUST COMPANY OF CANADA as Canadian
Collateral Agent (the “Canadian Collateral Agent”).

 

Reference is made to the Canadian Collateral Agreement dated as of November 15,
2007 (as amended, supplemented or otherwise modified from time to time, the
“Canadian Collateral Agreement”), among Grantor, Novamerican Steel Inc.
(“Company”) and the Canadian Collateral Agent. The Company has agreed to extend
credit to the Grantor subject to the terms and conditions set forth in certain
intercompany notes including the Intercompany Notes dated as of November 15,
2007 (as amended, supplemented or otherwise modified from time to time, the
“Intercompany Notes”). The obligations of the Company to extend such credit are
conditioned upon, among other things, the execution and delivery of this
Agreement. Accordingly, the parties hereto agree as follows:

 

SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Canadian Collateral Agreement.
The rules of construction specified in Section 1.01 of the Canadian Collateral
Agreement also apply to this Agreement.

 

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Financing Document Obligations,
Grantor, pursuant to the Canadian Collateral Agreement, did and hereby does
grant to the Canadian Collateral Agent, its successors and assigns, for the
benefit of the Secured Parties, a security interest in, all right, title or
interest in or to any and all of the following assets and properties now owned
or at any time hereafter acquired by Grantor or in which Grantor now has or at
any time in the future may acquire any right, title or interest:

 

(A)  ALL LETTERS PATENT OF CANADA OR THE EQUIVALENT THEREOF IN ANY OTHER
COUNTRY, ALL REGISTRATIONS AND RECORDINGS THEREOF, AND ALL APPLICATIONS FOR
LETTERS PATENT OF CANADA OR THE EQUIVALENT THEREOF IN ANY OTHER COUNTRY,
INCLUDING REGISTRATIONS, RECORDINGS AND PENDING APPLICATIONS IN THE CANADIAN
INTELLECTUAL PROPERTY OFFICE OR ANY SIMILAR OFFICES IN ANY OTHER COUNTRY,
INCLUDING THOSE LISTED ON SCHEDULE I (THE “PATENTS”), AND ALL REISSUES,
CONTINUATIONS, DIVISIONS, CONTINUATIONS-IN-PART, RENEWALS OR EXTENSIONS THEREOF,
AND THE INVENTIONS DISCLOSED OR CLAIMED THEREIN, INCLUDING THE RIGHT TO MAKE,
USE AND/OR SELL THE INVENTIONS DISCLOSED OR CLAIMED THEREIN (COLLECTIVELY, THE
“PATENT COLLATERAL”;

 

(B)  ALL TRADEMARKS, SERVICE MARKS, TRADE NAMES, CORPORATE NAMES, COMPANY NAMES,
BUSINESS NAMES, FICTITIOUS BUSINESS NAMES, TRADE STYLES, TRADE DRESS, LOGOS,
OTHER SOURCE OR BUSINESS IDENTIFIERS, DESIGNS AND GENERAL INTANGIBLES OF LIKE
NATURE, NOW EXISTING OR HEREAFTER ADOPTED OR ACQUIRED, ALL REGISTRATIONS AND
RECORDINGS THEREOF, AND ALL REGISTRATION AND RECORDING APPLICATIONS FILED IN
CONNECTION THEREWITH, INCLUDING REGISTRATIONS AND REGISTRATION APPLICATIONS IN
THE CANADIAN

 

--------------------------------------------------------------------------------

 

INTELLECTUAL PROPERTY OFFICE OR ANY SIMILAR OFFICES IN ANY OTHER COUNTRY OR ANY
POLITICAL SUBDIVISIONS THEREOF, AND ALL EXTENSIONS OR RENEWALS THEREOF,
INCLUDING THOSE LISTED ON SCHEDULE II (THE “TRADEMARKS”);

 

(C)  ALL GOODWILL ASSOCIATED WITH OR SYMBOLIZED BY THE TRADEMARKS; AND

 

(D)  ALL ASSETS, RIGHTS AND INTERESTS THAT UNIQUELY REFLECT OR EMBODY THE
TRADEMARKS.

 

SECTION 3. Canadian Collateral Agreement. The security interests granted to the
Canadian Collateral Agent herein are granted in furtherance, and not in
limitation of, the security interests granted to the Canadian Collateral Agent
pursuant to the Canadian Collateral Agreement. Grantor hereby acknowledges and
affirms that the rights and remedies of the Canadian Collateral Agent with
respect to the Patent Collateral and the Trademark Collateral are more fully set
forth in the Canadian Collateral Agreement, the terms and provisions of which
are hereby incorporated herein by reference as if fully set forth herein. In the
event of any conflict between the terms of this Agreement and the Canadian
Collateral Agreement, the terms of the Canadian Collateral Agreement shall
govern.

 

SECTION 4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA
APPLICABLE THEREIN.

 

2

--------------------------------------------------------------------------------

 

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

 

 

NOVAMERICAN STEEL INC.

 

 

 

 

by

 

 

 

 

 

 Name:

 

 

 Title:

 

 

 

 

 

BNY TRUST COMPANY OF CANADA,

 

as Canadian Collateral Agent,

 

 

 

 

by

 

 

 

 

 

 Name:

 

 

 Title:

 

3

--------------------------------------------------------------------------------

 

SCHEDULE I

 

I. PATENTS

 

Registered Owner

 

Type

 

Registration
Number

 

Expiration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II. PATENT APPLICATIONS

 

Registered Owner

 

Type

 

Registration
Number

 

Date

Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

III. Patent Licenses

 

Licensee

 

Licensor

 

Type

 

Registration
Number

 

Expiration
Date

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

SCHEDULE II

 

I. TRADEMARKS

 

Registered Owner

 

Mark

 

Registration
Number

 

Expiration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II. TRADEMARK APPLICATIONS

 

Registered Owner

 

Mark

 

Registration
Number

 

Date
Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

III. Trademark Licenses

 

Licensee

 

Licensor

 

Mark

 

Registration
Number

 

Expiration
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

FORM OF
COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Agreement”), dated as of
                         , 20   , between Novamerican Steel Inc. (“Grantor”),
and BNY Trust Company of Canada, acting in the capacity of agent for the benefit
of itself and the other Secured Parties (in such capacity, the “Canadian
Collateral Agent”).

 

WITNESSETH:

 

WHEREAS pursuant to the terms of that certain Canadian Collateral Agreement
dated as of November 15, 2007 (as amended, supplemented or otherwise modified
from time to time, the “Canadian Collateral Agreement”), among Grantor,
Novamerican Steel Inc. (“Company”) and the Canadian Collateral Agent. The
Company has agreed to extend credit to the Grantor subject to the terms and
conditions set forth in certain intercompany notes including the Intercompany
Notes dated as of November 15, 2007 (as amended, supplemented or otherwise
modified from time to time, the “Intercompany Notes”); and

 

WHEREAS the obligations of the Company to extend such credit are conditioned
upon, among other things, the execution and delivery of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Grantor agrees as follows:

 

Section 1.                                          Defined Terms

 

Capitalized terms used in this Agreement and not otherwise defined herein have
the meanings specified in the Canadian Collateral Agreement. The rules of
construction specified in Section 1.01 of the Canadian Collateral Agreement also
apply to this Agreement.

 

Section 2.                                          Grant of Security Interest
in Copyrights

 

Grantor hereby grants to the Canadian Collateral Agent a security interest and
continuing lien on all of Grantor’s right, title and interest in, to and under
the Copyrights, including the Copyrights listed in Schedule A, in each case
whether owned or existing or hereafter acquired or arising and wherever located
(collectively, the “Copyright Collateral”).

 

Section 3.                                          Security for Obligations

 

This Agreement secures, and the Copyright Collateral is collateral security for,
the prompt and complete payment and performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise of all Financing Document Obligations.

 

6

--------------------------------------------------------------------------------

 

Section 4.                                          Security Agreement

 

The security interests granted pursuant to this Agreement are granted in
conjunction with the security interests granted to the Canadian Collateral Agent
pursuant to the Canadian Collateral Agreement and Grantor hereby acknowledges
and affirms that the rights and remedies of the Canadian Collateral Agent with
respect to the security interest in the Copyright Collateral made and granted
hereby are more fully set forth in the Canadian Collateral Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein. In the event of any irreconcilable conflict between the terms of
this Agreement and the terms of the Canadian Collateral Agreement, the terms of
the Canadian Collateral Agreement shall control.

 

[SIGNATURE PAGE FOLLOWS]

 

7

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Schedule II to the

Canadian Collateral

Agreement

 

IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly executed and
delivered by its duly authorized officer as of the date first set forth above.

 

 

 

Very truly yours,

 

 

 

 

 

NOVAMERICAN STEEL INC.

 

as Grantor

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

ACCEPTED AND AGREED
as of the date first above written:

 

BNY TRUST COMPANY OF CANADA
as Canadian Collateral Agent

 

 

By:

 

 

 

Name:

 

Title:

 

2

--------------------------------------------------------------------------------

 

Schedule I
to
Copyright Security Agreement

 

 

REGISTERED COPYRIGHTS

 

[Include Registration Number and Date]

 

1.                                       COPYRIGHT APPLICATIONS

 

3

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