<PAGE>


                                                                    EXHIBIT 4.6



                                                                      C#: 54691
 [LOGO APPEARS HERE]                                                  L#: 54692
                                                                LS#: 8800022277


                                                                PROMISSORY NOTE
                                                                (AIRCRAFT LOAN)
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$4,000,000.00                                   Funding Date: November 27, 2002

         FOR VALUE RECEIVED, WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
IN ITS CAPACITY AS OWNER TRUSTEE (hereinafter the "Maker"), FOR THE BENEFIT OF
NOVAMERICAN TUBE HOLDINGS, INC., TRUSTOR, promises to pay to the order of KEY
CORPORATE CAPITAL INC., ACTING THROUGH ITS DIVISION KEY EQUIPMENT FINANCE,
("Holder"), the sum of $4,000,000.00 in lawful money of the United States of
America (the "Principal"), with interest thereon as hereafter provided
("Interest"), to be paid in the manner set forth herein. This Note is executed
pursuant to that certain aircraft security agreement (the "Aircraft Security
Agreement") dated as of November 27, 2002 between Maker and Holder. Capitalized
terms used herein without definition shall have the meaning given them in the
Aircraft Security Agreement.

1. INTEREST RATE; PLACE OF PAYMENT. Interest on the balance of the Principal
outstanding on this Note shall accrue from the Funding Date of this Note and
shall be due and payable at a fixed rate of percent (3.38%) per annum (the
"Interest Rate") which rate shall be immediately and correspondingly adjusted
(pursuant to 2(b) hereof) with each change in the Actual Index (as hereinafter
defined). Interest shall be calculated on the basis of a 360-day year consisting
of twelve 30-day months. Payment of the Principal and Interest hereunder shall
be made to Holder at 66 South Pearl Street, Post Office Box 1865, Albany, NY
12201-1865, or at such other place as Holder may designate from time to time in
writing. Holder reserves the right to require payment on this Note to be made by
wired federal funds or other immediately available funds.

2. REPAYMENT TERMS. (a) The Principal and Interest shall be due and payable as
follows:

                  (1) On the first Note Payment Date, an amount equal to $375.56
                  per day as interim interest for the period from the Funding
                  Date through and including the last day of the month following
                  the Funding Date, which interim interest was calculated by
                  Holder using the Assumed Index (as hereinafter defined) plus
                  200 basis points and is expressly not subject to adjustment
                  pursuant to Section 2(b) hereof; PLUS

                  (2) Sixty (60) consecutive monthly installments payable in
                  arrears each in an amount equal to 72,552.22 commencing and
                  payable on the first day of the second month following the
                  Funding Date and on the same day each month thereafter (each,
                  a "Note Payment Date"). In addition, Maker will pay a late
                  payment charge of five percent (5%) of any payment due
                  hereunder that is not paid on or before the date due
                  hereunder.

         (b) Maker and Holder agree that each Note payment hereunder shall be
increased or decreased (but not below zero), as the case may be, by the Rate
Differential (as hereinafter defined) as follows: if, as of any Note Payment
Date, (i) the Rate Differential is greater than zero, the amount due on such
Note Payment Date shall be increased by such Rate Differential, and (ii) the
Rate Differential is less than zero, the amount of the Note Payment due on such
Note Payment Date shall be decreased by such Rate Differential.

         (c) As used herein, the following terms shall have the respective
meanings indicated below:

                           (1) "Assumed Index" shall mean one hundred and
                  thirty-eight hundredths percent (1.38%).


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Form No: 96-500.801                                                 Page 1 of 5


<PAGE>


                           (2) "Actual Index" shall mean, as of the date of
                  determination, the London interbank offered rate for deposits
                  in United States dollars having a maturity of one month which
                  appears in the "Money Rates" section of THE WALL STREET
                  JOURNAL, published on the business day on, or immediately
                  prior to, the 28th day of the month immediately preceding such
                  calendar month. If the Actual Index is no longer available,
                  Holder will choose a new index which is based upon comparable
                  information and will give Maker notice of such new "Actual
                  Index."

                           (3) "Net Investment Balance" shall mean, as of the
                  date of determination, the outstanding balance (calculated
                  using the Assumed Index plus 200 basis points) reflected on
                  Holder's accounting system (which assumes a 360 day year
                  consisting of twelve 30 day months), for the Note Payment Date
                  immediately preceding such day or, if such day is a Note
                  Payment Date, for such Note Payment Date.

                           (4) "Rate Differential" shall mean, with respect to
                  any Note Payment Date, the product of the following formula:

<TABLE>
<S>              <C>
                  =========================================================================
                  RATE DIFFERENTIAL = ACTUAL INDEX - ASSUMED INDEX X NET INVESTMENT BALANCE
                                      ----------------------------
                                                   12
                  =========================================================================
</TABLE>

3. SECURITY. Payment of the Principal and Interest hereunder, and the
performance and observance by Maker of all agreements, covenants and provisions
contained herein, is secured by a first priority security interest in the
Collateral.

4. PREPAYMENT. Except as contemplated by section 3 of the Aircraft Security
Agreement, Maker may not prepay, in whole or in part, the principal outstanding
hereunder; PROVIDED, HOWEVER, that commencing on the date following the twelve
month anniversary of the Funding Date, Maker may prepay, in whole but not in
part, the principal outstanding hereunder by paying to Holder such outstanding
principal, together with all accrued and unpaid interest thereon at the Interest
Rate in effect on the Funding Date, plus a prepayment premium ("Prepayment
Premium") equal to a percentage of the outstanding principal calculated as
follows:

<TABLE>
<CAPTION>
Months                                              Prepayment Premium
-------------------------------------------------------------------------------
<S>                                              <C>
1-12                                                No prepayment permitted
13-24                                               1/2%
25-End of Term                                      0%
</TABLE>

5. TRANSFER OR ASSIGNMENT. Holder may at any time assign or otherwise transfer
or negotiate this Note in whole or in part, without any notice to Maker. The
rights and obligations of Maker may not be assigned or delegated.

6. APPLICATION OF PAYMENTS. Prior to an Event of Default, each payment received
on this Note shall be applied first to all costs of collection, then to unpaid
late payment charges (if any) and Prepayment Premium (if any) hereunder, then to
Interest as of the payment due date and the balance, if any, to the outstanding
Principal as of the date received. Upon the occurrence, and during the
continuance, of an Event of Default, any payments in respect of the Liabilities
and any proceeds of the Collateral when received by Holder in cash or its
equivalent, will be applied first to costs of collection and, thereafter, in
reduction of the Liabilities in such order and manner as Holder may direct in
its sole discretion, and Maker irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that
Holder shall have the continuing and exclusive right to apply any and all such
payments and proceeds in the Holder's sole discretion, notwithstanding any entry
to the contrary upon any of its books and records.


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Form No: Air 02-500.602                                             Page 2 of 5


<PAGE>


7. EVENTS OF DEFAULT. (a) Maker shall be in default if any of the following
happens (an "Event of Default"): (1) Maker fails to make any installment of the
Principal or Interest, or any other payment due and owing, under this Note
within ten (10) days after the same becomes due and payable; or (2) Maker fails
to perform any other obligation required to be performed by Maker under this
Note, the Aircraft Security Agreement or any of the other Loan Documents for
thirty (30) days after written notice from Holder of such failure; or (3) any
representation, warranty or other statement by or on behalf of Maker in
connection with this Note is false or misleading in any material respect; or (4)
an Event of Default has occurred and is continuing under the Aircraft Security
Agreement.

         (b) Notwithstanding anything to the contrary contained herein, upon the
occurrence of an Event of Default, Holder may declare the entire outstanding
balance of the Principal, together with all accrued and unpaid Interest thereon,
immediately due and payable without notice or demand which amounts shall,
together with all other sums due hereunder, accrue interest from such
acceleration until the date of actual payment at the Default Rate ("Default
Rate" shall mean an annual interest rate equal to the lesser or 12% of the
maximum interest rate permitted by Applicable Law). Should there occur an Event
of Default, and if a voluntary or involuntary petition under the United States
Bankruptcy Code is filed by or against Maker while such default remains uncured,
the entire outstanding balance of the Principal automatically shall be
accelerated and due and payable with interest thereon at the Default Rate and
Holder may exercise any and all of its remedies hereunder, under the other Loan
Documents and under Applicable Law ("Applicable Law" shall mean all applicable
Federal, state, local and foreign laws, ordinances, judgments, decrees,
injunctions, writs, rules, regulations, orders, licenses, and permits of any
governmental agency). The remedies of Holder provided herein, in the Aircraft
Security Agreement and under Applicable Law shall be cumulative and concurrent
and may be pursued singly, successively or concurrently at the sole discretion
of Holder and may be exercised as often as occasion therefor shall occur. The
failure to exercise, or any delay in the exercise of, any right or remedy shall
in no event be construed as a waiver, release or exhaustion of any such
remedies.

8. COLLECTION COSTS. In addition to the Principal, Interest, Prepayment Premium
(if any), and late payment charges (if any), Maker shall pay Holder on demand,
and Holder shall be entitled to collect all costs and expenses of collection,
including, without limitation, reasonable attorneys' fees, incurred in
connection with enforcement of its rights and remedies hereunder and under the
other Loan Documents, the protection or realization of the Collateral or in
connection with Holder's collection efforts, or in connection with any
bankruptcy or other judicial proceeding, whether or not suit on this Note or any
foreclosure proceeding is filed. All such costs and expenses shall be payable on
demand and, until paid, shall be Liabilities secured by the security interest
granted under the Aircraft Security Agreement and all other collateral, if any,
held by Holder as security for Maker's obligations under this Note.

9. GOVERNING LAW; BINDING AGREEMENT. The provisions of this Note shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns. THIS NOTE, THE AIRCRAFT SECUIRTY AGREEMENT
AND OTHER LOAN DOCUMENTS ARE BEING DELIVERED IN THE STATE OF NEW YORK AND SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.

10. MORE THAN ONE SIGNER. If more than one person or entity signs this Note as a
Maker, the obligations contained herein shall be deemed joint and several and
all references to "Maker" shall apply both jointly and severally.

11. GENERAL. Maker represents and warrants that this Note evidences a loan for
business or commercial purposes. Prior to signing this Note, Maker read and
understood the provisions hereof, and agrees to all terms and conditions
contained herein.


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Form No: Air 02-500.602                                             Page 3 of 5


<PAGE>


12. WAIVER. MAKER AND ALL ENDORSERS, SURETIES, AND GUARANTORS HEREOF HEREBY
JOINTLY AND SEVERALLY WAIVE PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF
NON-PAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE THE MATURITY, NOTICE
OF PROTEST AND PROTEST OF THIS NOTE. HOLDER AND MAKER HEREBY EACH WAIVE THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS NOTE, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION OR PROCEEDING TO
WHICH HOLDER OR MAKER MAY BE PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY, OF THIS NOTE OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND VOLUNTARILY BY
HOLDER AND THE MAKER WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS HAVE BEEN MADE
BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY
OR NULLIFY ITS EFFECT. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE AND THE OTHER LOAN
DOCUMENTS.

13. USURY; PARTIAL INVALIDITY. (a) At no time shall the Interest Rate (or the
Default Rate or other amounts paid or collected hereunder) exceed the highest
rate allowed by applicable law for this type of loan. Should Holder ever collect
interest at a rate that exceeds such applicable legal limit, such excess will be
credited to the Principal.

         (b) Whenever possible, each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under the laws of any
applicable jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note in any other jurisdiction.

14. NOTICES. All notices and other communications under this Note shall be in
writing and shall be addressed: (a) if to Maker, 79 South Main Street, 12th
Floor, Salt Lake City, UT 84111 with a copy to Guarantor, 2175 Hymus Boulevard,
Dorval, Quebec H9P 1J8, Canada and (b) if to Holder, Key Corporate Capital Inc.,
acting through its division Key Equipment Finance, 66 South Pearl Street, Post
Office Box 1865, Albany, NY 12201-1865, Attention: Account Manager, or such
other address as either party hereto shall communicate to the other party at its
address specified above. All such notices and other communications shall be
deemed to have been duly given if delivered by hand, overnight courier or if
sent by certified mail, return receipt requested, to the party to whom such
notice is intended to be given, and shall be effective upon receipt.

15. FUNDING DATE. The Funding Date for this Note shall be the date on which
Holder disburses funds hereunder. TO THE EXTENT THE FUNDING DATE IS LEFT BLANK
ABOVE, OR DOES NOT REFLECT THE ACTUAL DATE THAT HOLDER DISBURSES FUNDS
HEREUNDER, MAKER HEREBY AUTHORIZES HOLDER TO WRITE IN THE CORRECT DATE AT THE
TIME OF DISBURSEMENT.

         IN WITNESS WHEREOF, Maker, intending to be legally bound, has caused
this Note to be duly executed on the day and year first above written.


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Form No: Air 02-500.602                                             Page 4 of 5


<PAGE>


MAKER:

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, IN ITS CAPACITY AS OWNER
TRUSTEE, FOR THE BENEFIT OF NOVAMERICAN TUBE HOLDINGS, INC., TRUSTOR


X /s/ VAL T. ORTON
  ----------------------------
Name: Val T. Orton
Title: Vice President

STATE OF                            )
                                    ) ss.:
COUNTY OF                           )


         On this 26TH (DAY) day of 11 (MONTH), 2002 (YEAR), before me the
subscriber personally appeared VAL T. ORTON, who being by me duly sworn, did
depose and say; that (s)he resides at SALT LAKE County, State of UTAH: that
(s)he is a VICE PRESIDENT of WELLS FARGO BANK NORTHWEST, N.A., the corporation
described in and which executed the foregoing instrument; and that (s)he signed
his/her name thereto by order of the Board of Directors of said corporation.


/s/ JANICE BRYANT
------------------------------
NOTARY PUBLIC

My Commission Expires: 9/14/05


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Form No: Air 02-500.602                                             Page 5 of 5


<PAGE>




                                                                Foreign Guaranty
--------------------------------------------------------------------------------

                          CORPORATE GUARANTY AGREEMENT

         This CORPORATE GUARANTY AGREEMENT (this "Guaranty") is made as of
November 27, 2002 by NOVAMERICAN STEEL INC., a Canadian company (the
"Guarantor"), in favor of KEY EQUIPMENT FINANCE, A DIVISION OF KEY CORPORATE
CAPITAL INC. ("KEF").

                                    RECITALS

1.       WELLS FARGO BANK NORTHWEST NATIONAL ASSOCIATION, IN ITS CAPACITY AS
         OWNER TRUSTEE (the "Borrower") for the benefit of Novamerican Tube
         Holdings, Inc., as Trustor, has executed a Promissory Note, Aircraft
         Security Agreement and associated loan documents dated as of November
         27, 2002, under which KEF is Lender (collectively the "Agreement");
         and

2.       Guarantor will derive substantial and direct benefits (which benefits
         are hereby acknowledged) from the Agreement and other benefits
         provided to Borrower under the Agreement; and

3.       It is a condition precedent to KEF's obligation as Lender that this
         Guaranty is given and be in full force and effect. Capitalized terms
         used herein without definition shall have the meanings assigned
         thereto in the Agreement.

                                A G R E E M E N T

         NOW THEREFORE, in order to induce KEF to participate in the
transactions described above and for other good and valuable consideration,
receipt of which Guarantor acknowledges, and in consideration of, and in order
to induce KEF to enter into the Agreement:

         Section 1. GUARANTY. Guarantor hereby (i) unconditionally and
irrevocably guarantees to KEF the full and prompt performance by Borrower of
all obligations which Borrower currently or hereafter may have to KEF under
the Agreement, for the payment when due of all payments (including, without
limitation, principal and interest due on the indebtedness) and all other
sums currently or hereafter owing by Borrower to KEF thereunder, including
costs, expenses and reasonable attorneys fees incurred by KEF in connection
therewith, and (ii) agrees to indemnify KEF against all costs and expenses
KEF may incur as a result of the enforcement or attempted enforcement by KEF
of any of its rights against Guarantor hereunder. Guarantor agrees that this
Guaranty shall be valid, enforceable and unconditionally binding upon
Guarantor regardless of: (a) the reorganization, merger or consolidation of
Borrower into or with another entity, corporate or otherwise, or the sale or
other disposition of all or substantially all of the capital stock, business
or assets of Borrower to any other person or party; (b) the dissolution of
Borrower, Guarantor or any Other Guarantor (as hereinafter defined); (c) the
voluntary or involuntary bankruptcy (including a reorganization in
bankruptcy) of Borrower, Guarantor or any Other Guarantor (as hereinafter
defined); (d) the granting by KEF of any indulgences or extensions to
Borrower, Guarantor or any Other Guarantor (as hereinafter defined); (e) the
assertion by KEF against Borrower, Guarantor or any Other Guarantor (as
hereinafter defined) of any of KEF's rights and remedies provided for under
the Agreement or existing in its favor in law, equity or bankruptcy; (f) the
release of Borrower, Guarantor or any Other Guarantor (as hereinafter
defined) from any obligations under


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Form No.: Foreign Guaranty                                           Page 1 of 8


<PAGE>


the Agreement, this Guaranty or any Other Guarantees by KEF or by operation
of law or otherwise; (g) any invalidity, irregularity, defect or
unenforceability of any provision of the Agreement, this Guaranty or any
Other Guarantees; or (h) the destruction, sale, modification or alteration of
any item of the Equipment. Guarantor confirms that the foregoing waiver is
informed and voluntary.

         Section 2. WAIVERS. Guarantor hereby waives notice of and consents to
(i) the financing of the Equipment under the Agreement and to any leasing or
other use of the Equipment permitted by KEF (regardless of who any such lessee
or user may be), (ii) all of the provisions of the Agreement, and any
amendments, qualifications and extensions thereof, and any actions taken
thereunder, and (iii) execution by Borrower of the forgoing documents and of any
other agreements, documents and instruments executed by Borrower in connection
therewith. Guarantor further waives notice of KEF's acceptance of this Guaranty,
of any default and non-payment and/or non-performance by Borrower under the
Agreement, of presentment, protest and demand, and of all other matters to which
Guarantor might otherwise be entitled. Guarantor further agrees that this
Guaranty shall remain and continue in full force and effect notwithstanding any
renewal, modification or extension of the term of the Agreement or of the terms
and conditions of the Agreement. Guarantor hereby expressly waives all notice of
and consents to any such renewal, modification or extension, and to the
execution by Borrower of any documents pertaining to any such renewal,
modification or extension. Guarantor further agrees that Guarantor's liability
under this Guaranty shall be absolute, primary and direct, and that KEF shall
not be required to pursue any right or remedy it may have against Borrower under
the Agreement or otherwise (and shall not be required first to commence any
action or obtain any judgment against Borrower) before enforcing this Guaranty
against Guarantor. Guarantor hereby agrees that the failure of KEF to insist in
any one or more instances upon a strict performance or observance of any of the
terms, provisions or covenants of the Agreement, or to exercise any of its
rights thereunder, shall not be construed or deemed to be a waiver or
relinquishment for the future of any such terms, provisions, covenants or
rights, but such terms, provisions, covenants and rights shall continue and
remain in full force and effect and shall be enforceable under this Guaranty. No
delay or failure by KEF to exercise any right or remedy against any Other
Guarantor (as hereinafter defined) will be construed as a waiver of that right
or remedy or as a waiver of any right or remedy against Guarantor. All remedies
of KEF against the Borrower, Guarantor and the Other Guarantors (as hereinafter
defined) are cumulative. Receipt by KEF of any payments or other sums payable
under the Agreement with knowledge that Borrower has breached any of the terms,
provisions or covenants of the Agreement shall not be deemed to be a waiver by
KEF of such breach, or a re-lease or relinquishment of any claim for future
performance under the Agreement or this Guaranty.

         Section 3. REPRESENTATIONS. Guarantor warrants and represents to KEF
that the execution, delivery and performance of this Guaranty will not result in
a breach of, or constitute a default under, or result in the creation of any
security interest, lien, charge or encumbrance upon any property or assets of
Guarantor pursuant to any loan agreement, indenture or contract to which
Guarantor is a party or by or under which it is bound.

         Section 4. ASSIGNMENT. No assignment or other transfer by KEF or
Borrower of any interest, right or obligation under the Agreement, or assumption
by any third party of the obligations of Borrower under the Agreement, shall
extinguish or diminish the unconditional, irrevocable, absolute, primary and
direct liability of Guarantor under this Guaranty, Guarantor hereby consenting
to and waiving all notice of any such assignment, transfer or assumption.


--------------------------------------------------------------------------------
Form No.: Foreign Guaranty                                           Page 2 of 8


<PAGE>


         Section 5. SUBROGATION. Until such time as any obligations of the
Borrower under the Agreement are paid in full, Guarantor specifically waives any
and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution or any other claim which the Guarantor may now or hereafter have
against the Borrower or any other person or entity directly or contingently
liable for the obligations guaranteed hereunder, or against or with respect to
the Borrower's property (including, without limitation, property collateralizing
the Agreement), arising from the existence or performance of this Guaranty.

         Section 6. UNCONDITIONAL GUARANTY. The liability of Guarantor under
this Guaranty, and of any other guarantors (the "Other Guarantors"), if any,
under guarantees (the "Other Guarantees") given in favor of KEF in connection
with the Agreement, shall be joint and several and shall be irrevocable,
unconditional and absolute, continuing in full force and effect according to its
terms, until all of the obligations hereby guaranteed have been fully satisfied.
The release or modification of any or all of the Other Guarantees shall in no
way modify, release, or affect Guarantor under this Guaranty.

         Section 7. ASSIGNMENT BY KEF. This Guaranty is assignable by KEF
without notice to Guarantor and Guarantor consents thereto. Guarantor's
obligations under this Guaranty may not be delegated to any other person or
entity without the prior written consent of KEF. Any assignee of KEF shall have
all of the rights of KEF hereunder and may enforce this Guaranty against
Guarantor with the same force and effect as if this Guaranty were given to such
assignee in the first instance. This Guaranty shall inure to the benefit of KEF,
and its successors and assigns, and shall be binding upon Guarantor and its
heirs, administrators, successors and assigns. To the extent that an assignment
of all or any portion of KEF's interest in this Guaranty or the Agreement or any
outstanding obligation of the Borrower or Guarantor hereunder or thereunder
would, at the time of such assignment, result in the increase of any amount
payable under Section 11 over that being charged by KEF prior to such
assignment, neither the Guarantor nor the Borrower shall be obligated to pay
such increased amount.

         Section 8. SEVERABILITY. If any provision of this Guaranty is found by
a court of competent jurisdiction to be prohibited or unenforceable, it shall be
ineffective only to the extent of such prohibition or unenforceability, and such
prohibition or unenforceability shall not invalidate the balance of such
provision to the extent that it is not prohibited or unenforceable, nor
invalidate the other provisions hereof, all of which shall be construed
liberally in favor of KEF in order to effect the provisions hereof.

         Section 9. PAYMENT IN U.S. DOLLARS; JUDGMENT CURRENCY. This Guaranty is
made by the Guarantor in connection with a financing transaction in which the
specification of U.S. Dollars and payment at the designated place of payment is
of the essence, and U.S. Dollars shall be the currency of accounting in all
events. The payment obligations of the Guarantor under this Guaranty shall not
be discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to U.S. Dollars and transferred to the designated place of payment
under normal banking procedures does not yield the amount of U.S. Dollars due
hereunder. If for the purpose of obtaining judgment in any court it is necessary
to convert a sum due hereunder in U.S. Dollars into another currency (the
"Judgment Currency"), the rate of exchange which shall be applied shall be that
at which, in accordance with normal banking procedures, the party entitled
thereto could purchase U.S. Dollars with the Judgment Currency at commercial
banks located in the City of New York on the business day on which such payment
is received. The obligation of the Guarantor in respect of any such sum due from
it to any party hereunder shall, notwithstanding the rate of exchange actually
applied in rendering such judgment, be discharged only to the extent that on the
business day of receipt by such party of any


--------------------------------------------------------------------------------
Form No.: Foreign Guaranty                                           Page 3 of 8


<PAGE>


sum adjudged to be due hereunder in the Judgment Currency such party may, in
accordance with normal banking procedures, purchase and transfer to a bank in
the City of New York U.S. Dollars with the amount of the Judgment Currency so
adjudged to be due. Guarantor hereby agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify KEF against, and to pay KEF on
demand, U.S. Dollars, in the amount equal to any difference between the sum
originally due to KEF in U.S. Dollars and the amount of U.S. Dollars so
purchased and transferred.

         Section 10. CONSENTS AND REGISTRATIONS. Until payment and performance
in full of all of the obligations hereunder, the Guarantor will obtain at any
time and from time to time all exchange control authorizations and all other
authorizations, licenses, consents, registrations and approvals as shall now or
hereafter be necessary in connection with its making and performance of this
Guaranty.

         Section 11. WITHHOLDING TAXES.

                  (a) Each payment to be made by the Guarantor under this
Guaranty shall be made free and clear of and without deductions or withholding
of or on account of any present or future taxes, duties, assessments or charges
of whatsoever nature together with any liabilities (including penalties,
interest and expenses) in respect thereof imposed or levied on or on behalf of
the government of Canada or any political subdivision thereof or any authority
or agency thereof having the power to tax ("Canadian Withholding Taxes") unless
such deduction or withholding is required by the laws of Canada or any province
or political subdivisions thereof or by the administrative practice of any
taxing authority. "Canadian Withholding Taxes" shall not include Excluded Taxes
(as defined below). If any such deduction or withholding is required by Canada
in respect of any such payment, the Guarantor shall, unless such deduction or
withholding is attributable to Excluded Taxes (as defined below):

                           (i) pay any such additional amount to KEF as may be
                  necessary to ensure that it receive a net sum after such
                  deduction, withholding or payment of Canadian Withholding
                  Taxes (including any deduction, withholding or payment of
                  Canadian Withholding Taxes in respect of the additional
                  amount), free from any liability in respect of any such
                  Canadian Withholding Taxes, equal to the sum that KEF would
                  have received had no such deduction or withholding of Canadian
                  Withholding Taxes been made or required to be made and had no
                  such Canadian Withholding Taxes been payable;

                           (ii) deduct such Canadian Withholding Taxes from
                  such payment;

                           (iii) pay the full amount so deducted to the relevant
                  authority on account of such Canadian Withholding Taxes within
                  the time provided under, and otherwise in accordance with,
                  Applicable Law; and

                           (iv) promptly after the date such Canadian
                  Withholding Taxes are due under Applicable Law, deliver to KEF
                  the forms prescribed by the relevant authority of such
                  Canadian Withholding Taxes.

                  (b) Without duplication of clause (a) of this Section 11, the
Guarantor hereby indemnifies and holds harmless KEF on an after-tax basis, for
any Canadian Withholding Taxes that may become payable by KEF in respect of any
payment made by the Guarantor under this Guaranty. Without limiting the
generality of the foregoing, in the event that:


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                           (i) the Guarantor or KEF is assessed or reassessed by
                  any Canadian taxing authority for any Canadian Withholding
                  Taxes in respect of any payment made by the Guarantor under
                  this Guaranty, the Guarantor shall pay such Canadian
                  Withholding Taxes together with interest or penalties thereon
                  to such taxing authority on behalf of KEF and without recourse
                  against KEF within ten (10) days of demand therefore by KEF;
                  or

                           (ii) KEF pays any Canadian Withholding Taxes in
                  respect of any payment made by the Guarantor under this
                  Guaranty the Guarantor shall indemnify KEF upon receipt of the
                  notice called for in clause (d) below.

                  (c) Without duplication of clause (a) or clause (b) of this
Section 11, the Guarantor shall indemnify and hold harmless KEF, on an after-tax
basis, for any additional taxes on net income that KEF may be obliged to pay as
a result of the receipt by it or payment by the Guarantor of any amount under
this Section 11.

                  (d) KEF shall promptly notify the Guarantor of any Canadian
Withholding Taxes in respect of which it has paid or received an assessment or
reassessment from any Canadian taxing authority and for which the Guarantor is
required to indemnify it pursuant to clause (b) or clause (c) of this Section 11
and of the amount payable to it by the Guarantor pursuant to such clause or
clauses, as the case may be, and the Guarantor shall indemnify KEF within ten
(10) days of the receipt of such notice. KEF shall reasonably determine the
amount payable to it.

                  (e) In the event KEF contests the assessment of any Canadian
Withholding Taxes for which it has received indemnification or reimbursement
from the Guarantor under this Section 11, and such Canadian Withholding Taxes
are refunded to KEF by any Canadian taxing authority, KEF shall repay, to the
extent of such refund received by it, as determined after taking into account
any tax detriments and benefits reasonably expected to be realized by KEF by
reason of such refund and repayment, any amounts paid by the Guarantor under
this Section 11 in respect of such Canadian Withholding Taxes.

                  (f) The Guarantor shall not be liable for and shall not
reimburse or indemnify KEF for any present or future taxes, duties, assessments
or charges of whatsoever nature together with any liabilities (including
penalties, interest and expenses) in respect thereof imposed or levied by or on
behalf of the government of Canada or any political subdivision thereof or any
authority or agency therein or thereof having the power to tax to the extent
that any such item is imposed or levied (such taxes, duties, assessment, charges
or liabilities being hereinafter referred to as "Excluded Taxes") as a result of
KEF: (i) being organized under the laws of, or resident or doing business in
Canada otherwise than by reason of the transactions contemplated by the
Agreement; or (ii) being a person who is not dealing at arm's length (within the
meaning of the income tax act of Canada, as it may from time to time be amended)
with the Guarantor.

                  (g) The Guarantor's obligations under this Section 11 shall
survive the termination of this Guaranty and the payment of all amounts payable
under the other provisions of this Guaranty.

                  (h) KEF shall comply with the requirements of any provision of
Applicable Law or treaty properly available to KEF to reduce or eliminate any
such Canadian Withholding Taxes and shall provide to Guarantor evidence thereof.


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         Section 12. TERM OF AGREEMENT. This Guaranty and all guarantees,
covenants and agreements of the Guarantor contained herein shall continue in
full force and effect and shall not be discharged until the Agreement expires in
accordance with its terms and the payment of all Borrower obligations
thereunder, after which this Guaranty shall terminate and be of no force and
effect against the Guarantor, except as otherwise expressly provided herein.

         Section 14. MISCELLANEOUS.

                  (a) AMENDMENTS AND WAIVERS. No term, covenant, agreement or
condition of this Guaranty may be terminated, amended or compliance therewith
waived (either generally or in a particular instance, retroactively or
prospectively) except by an instrument or instruments in writing executed by
each party hereto.

                  (b) GOVERNING LAW. THIS GUARANTY SHALL BE IN ALL RESPECTS
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES OF SUCH STATE. THE GUARANTY HAS BEEN DELIVERED
IN THE STATE OF NEW YORK.

                  (c) SUCCESSORS AND ASSIGNS. This Guaranty shall be binding
upon and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof. Except as expressly provided herein or in the
Agreement, no party hereto may otherwise assign their interests without the
consent of the parties hereto.

                  (d) HEADINGS. The headings of the sections of this Guaranty
are inserted for purposes of convenience only and shall not be construed to
affect the meaning or construction of any of the provisions hereof.

                  (e) NOTICES. Unless otherwise expressly specified or permitted
by the terms hereof, all communications and notices provided for herein shall be
in writing or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (i) upon personal delivery
thereof, including, without limitation, by overnight mail and courier service,
(ii) in the case of notice by United States mail, certified or registered,
postage prepaid, return receipt requested, upon receipt thereof, or (iii) in the
case of notice by such a telecommunications device, upon transmission thereof,
provided such transmission is promptly confirmed, in each case addressed, if to
the Guarantor, at 2175 Hymus Blvd., Dorval, Quebec H9P IJ8, Canada, and if to
KEF, at 66 South Pearl Street, Albany, New York, 12207, Attention: Account
Manager, or in the case of any such party hereto, at such other address as such
party may from time to time designate by written notice to the other party
hereto.

                  (f) WAIVER. No waiver of any of the terms and conditions of
this Guaranty and no notice to or demand on the Guarantor in any case shall
entitle the Guarantor to any other or further notice or demand in similar or
other circumstances or constitute the waiver of any rights of the parties hereto
to any other or further action in any circumstances without notice of demand. No
failure or delay in exercising any right, power or privilege hereunder shall
operate as a waiver hereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.


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                  (g) ENFORCEMENT. The Guarantor agrees to pay all reasonable
out-of-pocket costs and expenses incurred by or on behalf of KEF or its
successors or assigns in connection with the enforcement hereof against the
Guarantor (including, without limitation, the reasonable fees and disbursements
of counsel). The Guarantor agrees that the parties hereto may bring suit against
the Guarantor without joining the Borrower.

                  (h) ACTIONS AND PROCEEDINGS. Any legal action or proceeding
against the Guarantor with respect to this Guaranty may be brought in such of
the courts of competent jurisdiction of the State of New York or in the United
States District Court for the Northern District of New York as KEF or its
successors and assigns, as the case may be, may elect, and by execution and
delivery of this Guaranty the Guarantor irrevocably submits to the nonexclusive
jurisdiction of such courts, and to appellate courts therefrom, for purposes of
legal actions and proceedings hereunder and, in the case of any such legal
action or proceeding brought in the above-named New York courts, hereby
irrevocably consents, during such time, to the services of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered mail, postage prepaid, to the Guarantor at its
address as provided in Section 13(e) hereof, or by any other means permitted by
Applicable Law. If it becomes necessary for the purpose of service of process
out of any such courts, the Guarantor shall take all such action as may be
required to authorize a special agent to receive, for and on behalf of it,
service of process in any such legal action or proceeding, and shall take all
such action as may be necessary to continue said appointment in full force and
effect so that the Guarantor will at all times have an agent for service of
process for the above-purposes located within the jurisdiction of such courts.
To the extent permitted by Applicable Law, a final, unappealable judgment (a
certified copy of which shall be conclusive evidence of the fact and of the
amount of any indebtedness of the Guarantor to KEF) against the Guarantor in any
such legal action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on an unsatisfied judgment. To the extent that the
Guarantor has or hereafter may acquire any immunity from jurisdiction of any of
the above-named courts or from any Canadian court or from any legal process
therein, the Guarantor hereby irrevocably waives such immunity, and the
Guarantor hereby irrevocably waives and agrees not to assert, by way of motion,
as a defense, or otherwise, in any legal action or proceeding brought hereunder
in any of the above-named courts or in any Canadian court, (i) the defense of
sovereign immunity, (ii) any claim that it is not personally subject to the
jurisdiction of the above-named courts or any Canadian court by reason of
sovereign immunity or otherwise, (iii) that it or any of its property is immune
from the above-described legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, or otherwise),
(iv) that such action or proceeding is brought in an inconvenient forum, that
venue for the action or proceeding is improper or that this Guaranty or any
other operative document may not be enforced in or by such courts, or (v) any
defense that would hinder or delay the levy, execution or collection of any
amount to which any party hereto is entitled pursuant to a final, unappealable
judgment of any court having jurisdiction. Nothing in these provisions shall
limit any right of KEF to bring actions, suits or proceedings in the courts of
any other jurisdiction. The Guarantor expressly acknowledges that the foregoing
waiver is intended to be irrevocable under the laws of the State of New York and
of the United States of America and of Canada and in particular under the United
States Foreign Sovereign Immunities Act of 1976, and that the provisions of this
Section 13(h) constitute, INTER ALIA, a special arrangement for service between
the parties hereto under said Act.


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                  (i) JURY TRIAL WAIVER. Each of Guarantor and (by its
acceptance of this guaranty) KEF hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Guaranty or the Agreement.

         IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the 27th
day of November, 2002.

NOVAMERICAN STEEL, INC.


By: Christopher H. Pickwoad
    -----------------------
Name:  Christopher H. Pickwoad
Title:  Chief Financial Officer











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