Exhibit 4(j)


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

                               SECURITY AGREEMENT

                             Made as of May 15, 2003

                                     Between

                              BLOUNT HOLDINGS LTD.,

                                   as Grantor

                                       And

                      GENERAL ELECTRIC CAPITAL CANADA INC.

                     as Canadian Agent for Canadian Lenders

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










<PAGE>



                                TABLE OF CONTENTS

                                                                          PAGE

SECTION 1.     INTERPRETATION................................................1
      1.1   Terms Defined in PPSA............................................1
      1.2   Other Defined Terms..............................................2
      1.3   Terms Defined in Credit Agreement................................2

SECTION 2.     GRANT OF SECURITY.............................................2
      2.1   Grant of Security................................................2
      2.2   Exception Respecting Trademarks..................................4
      2.3   Exception to Last Day............................................4
      2.4   Liability for Deficiency.........................................4

SECTION 3.     AGENT'S AND CANADIAN LENDERS' RIGHTS:  LIMITATIONS ON
               AGENT'S AND CANADIAN LENDERS' OBLIGATIONS
               4
      3.1   Continued Liability of Grantor under Licenses, etc...............4
      3.2   Notice to Account Debtors........................................4
      3.3   Verification of Accounts.........................................5

SECTION 4.     REPRESENTATIONS AND WARRANTIES OF GRANTOR.....................5
      4.1   Representations and Warranties...................................5

SECTION 5.     COVENANTS OF THE GRANTOR......................................8
      5.1   Covenants........................................................8

SECTION 6.     REMEDIES.....................................................11
      6.1   Appointment of Receiver.........................................11
      6.2   Exercise of Rights by Canadian Agent............................12
      6.3   Taking Possession of Collateral.................................12
      6.4   Rights and Remedies under PPSA..................................12
      6.5   Co-operation of Grantor with respect to Taking Possession.......12
      6.6   Costs...........................................................13
      6.7   Notice of Sale..................................................13
      6.8   Grant of Licence to Use Intellectual Property Collateral........13
      6.9   Limitation on Canadian Agent's and Canadian Lenders' Duty in
            Respect of Collateral...........................................13
      6.10  Waiver by Grantor...............................................14
      6.11  Acknowledgement by Grantor......................................14

SECTION 7.     MISCELLANEOUS................................................15
      7.1   Extensions, etc.................................................15
      7.2   No Waiver.......................................................15
      7.3   Waiver of Protest...............................................15
      7.4   Assignment and Enurement........................................15
      7.5   Amendment.......................................................16
      7.6   Notices.........................................................16


<PAGE>


                                TABLE OF CONTENTS
                                  (CONTINUED)

                                                                          PAGE

      7.7   Remedies Cumulative.............................................16
      7.8   Headings........................................................16
      7.9   Reinstatement...................................................16
      7.10  Number and Gender...............................................16
      7.11  Limitation by Law; Severability.................................17
      7.12  Attachment......................................................17
      7.13  Amalgamation....................................................17
      7.14  Canadian Agent's Appointment as Attorney-In-Fact................17
      7.15  Termination of This Agreement...................................18
      7.16  Further Assurances..............................................18
      7.17  Governing Law...................................................18
      7.18  Counterparts....................................................18
      7.19  No Strict Construction..........................................18
      7.20  Advice of Counsel...............................................19
      7.21  Benefit of Canadian Agent and Canadian Lenders..................19

SECTION 8.     COPY OF AGREEMENT............................................19
      8.1   Copy............................................................19
      8.2   Waiver..........................................................19

SCHEDULE 4.1(4) - FINANCING STATEMENTS

SCHEDULE 4.1(5) - INSTRUMENTS AND CHATTEL PAPER

SCHEDULE 4.1(6) - LOCATIONS

SCHEDULE 4.1(10) - DESIGNS, PATENTS, TRADEMARKS AND COPYRIGHTS

EXHIBIT A - POWER OF ATTORNEY




<PAGE>




                               SECURITY AGREEMENT

This Agreement is made as of  May 15, 2003, between


                    BLOUNT HOLDINGS LTD., a Canada corporation ("Grantor"),

                         and

                    GENERAL ELECTRIC CAPITAL CANADA INC. a Canada corporation,
                    individually and as agent (together with its successors and
                    assigns, "CANADIAN AGENT") for itself and the financial
                    institutions and other entities that are from time to time
                    Canadian Lenders under the Credit Agreement (as hereinafter
                    defined)

RECITALS

A.   Pursuant to that certain Credit Agreement dated as of the date hereof by
     and among Blount, Inc., a Delaware corporation, Blount Canada Ltd., as
     Canadian Borrower (as defined in the Credit Agreement), the other Credit
     Parties (as defined in the Credit Agreement) signatory thereto, General
     Electric Capital Corporation, as Agent, the Canadian Agent, and the other
     Persons signatory thereto from time to time as Canadian Lenders (including
     all annexes, exhibits and schedules thereto, as from time to time amended,
     restated, supplemented or otherwise modified, the "CREDIT AGREEMENT"), US
     Lenders (as defined in the Credit Agreement) have agreed to make Loans (as
     defined in the Credit Agreement) to, and to incur Letter of Credit
     Obligations (as defined in the Credit Agreement) on behalf of, US Borrowers
     (as defined in the Credit Agreement), and Canadian Lenders (as defined in
     the Credit Agreement) have agreed to make Canadian Loans (as defined in the
     Credit Agreement) to Canadian Borrower.

B.   In connection with the making of the Canadian Loans under the Credit
     Agreement, and as a condition precedent thereto, Canadian Lenders require
     that Grantor shall have executed and delivered this Agreement as security
     for all its obligations arising under, by virtue of or otherwise in
     connection with the Credit Agreement, this Agreement, the guarantee of even
     date executed by Grantor in favour of Canadian Agent ("Guarantee") or any
     of the other Loan Documents to which the Grantor is party.

FOR VALUE RECEIVED, the parties agree as follows:

SECTION 1. INTERPRETATION

1.1  TERMS DEFINED IN PPSA

     The terms "Chattel Paper", "Document of Title", "Goods", "Instrument",
"Intangible", "Security", "Proceeds", "inventory", "Accession", "Money",
"Account", "financing statement" and "financing change statement" whenever used
herein shall be interpreted in accordance with their respective meanings in the
Personal Property Security Act (Ontario), as amended from time to time, which
Act, including amendments thereto and any Act substituted therefor and


<PAGE>


                                      -2-

amendments thereto, is herein referred to as the "PPSA" unless expressly stated
or provided otherwise herein. Any reference herein to "Collateral" shall, unless
the context otherwise requires, be deemed a reference to "Collateral or any part
thereof". The term "Proceeds", whenever used herein and interpreted as above,
shall, by way of example, include trade-ins, equipment, Money, bank accounts,
notes, Chattel Paper, Goods, contracts rights, Accounts and any other personal
property or obligation received when such Collateral or Proceeds are sold,
exchanged, collected or otherwise disposed of or dealt with.

1.2  OTHER DEFINED TERMS

     Unless otherwise defined or stated, capitalized terms used herein have the
following meanings:

(1) AGREEMENT means this agreement and all schedules attached hereto as the same
may be amended, restated, supplemented and otherwise modified from time to time.
All uses of the words "hereto", "herein", "hereof ", "hereby" and "hereunder"
and similar expressions refer to this security agreement and not to any
particular section or portion of it.

(2) CREDIT AGREEMENT has the meaning given to it in paragraph A of the Recitals.

(3) COLLATERAL has the meaning given to it in Section .

(4) INVENTORY has the meaning given to it in Section .

(5) OBLIGATIONS means the Grantor's Obligations (as defined in the Credit
Agreement) including, without limitation, any and all indebtedness, liabilities
and obligations, now or hereafter existing, direct or indirect, absolute or
contingent, as principal or surety, of Grantor to Canadian Agent and Canadian
Lenders or any of them arising under, by virtue of or otherwise in connection
with this Agreement, the Credit Agreement, the Guarantee or any other Loan
Document.

(6) RECEIVER has the meaning given to it in Section .

(7)   SECURITY INTEREST has the meaning given to it in Section 2.1

1.3  TERMS DEFINED IN CREDIT AGREEMENT

     Other capitalized terms used herein and not otherwise defined have the
meanings given to them in the Credit Agreement or in Annex "A" thereto.

SECTION 2. GRANT OF SECURITY

2.1  GRANT OF SECURITY

     As continuing collateral security for the due payment and performance by
Grantor of all of the Obligations, Grantor hereby grants, assigns, conveys,
mortgages, pledges, hypothecates and transfers to Canadian Agent, for its
benefit and for the benefit of Canadian Lenders, and grants to Canadian Agent,
for its benefit and for the benefit of Canadian Lenders, a security


<PAGE>


                                      -3-


interest (collectively, the "SECURITY INTEREST") in, all of its right, title and
interest in, to and under all of Grantor's present and after acquired personal
property and other assets, including, without limitation, in all Goods
(including all parts, accessories, attachments, special tools, additions and
accessions thereto), Chattel Paper, Documents of Title (whether negotiable or
not), Instruments, Money and Securities now owned or hereafter owned or acquired
by or on behalf of Grantor (including such as may be returned to or repossessed
by Grantor) and in all Proceeds and renewals thereof, accretions thereto and
substitutions therefor and, further including, without limitation, all of the
following now owned or hereafter owned or acquired by or on behalf of Grantor:

(1) all Accounts and book debts and generally all debts, dues, claims, choses in
action and demands of every nature and kind howsoever arising or secured,
including letters of credit and advices of credit, which are now due, owing or
accruing or growing due to or owned by or which may hereafter become due, owing
or accruing or growing due to or owned by Grantor ("DEBTS");

(2) all Chattel Paper and Documents of Title;

(3) all inventory of whatever kind and wherever situate, including, for greater
certainty, all raw materials, work in process or materials used or consumed or
to be used or consumed in the processing, production, packaging, promotion,
delivery or shipping of the same, including other supplies (collectively,
"INVENTORY");

(4) all Equipment (other than Inventory) of whatever kind and wherever situate,
including, without limitation, all machinery, tools, apparatus, plant,
furniture, fixtures, motor vehicles and other vehicles of whatsoever nature or
kind;

(5) all Intangibles;

(6) all present and future contracts, contract rights and insurance claims;

(7) all Intellectual Property;

(8) all present and future Instruments;

(9) all Money and Securities; and

(10) all deeds, documents, writings, papers, books of account and other books
relating to or being records of any of the foregoing or by which such are or may
hereafter be secured, evidenced, acknowledged or made payable.

The foregoing property is collectively referred to as the "COLLATERAL". In
addition, to secure the prompt and complete payment, performance and observation
of the Obligations, Grantor hereby grants to Canadian Agent, for its benefit and
for the benefit of Canadian Lenders, a right of set-off against Collateral now
or hereafter in the possession or custody of or in transit to Canadian Agent or
any Canadian Lender for any purpose.



<PAGE>


                                      -4-


2.2  EXCEPTION RESPECTING TRADEMARKS

     Notwithstanding Section , Grantor's grant of security in trademarks (as
defined in the Trademarks Act (Canada)) under this Agreement shall be limited to
a grant by Grantor of a security interest in all of Grantor's right, title and
interest in such trademarks.

2.3  EXCEPTION TO LAST DAY

     The Security Interest granted hereby shall not extend or apply to, and
Collateral shall not include, the last day of the term of any lease or agreement
therefor, but upon the enforcement of the Security Interest, Grantor shall stand
possessed of such last day in trust to assign the same to any person acquiring
such term.

2.4  LIABILITY FOR DEFICIENCY

     If the Collateral is realized upon and the Security Interest in the
Collateral is not sufficient to satisfy all Obligations, Grantor acknowledges
and agrees that Grantor shall continue to be liable for any Obligations
remaining outstanding and Canadian Agent shall be entitled to pursue full
payment thereof.

SECTION 3.  AGENT'S AND CANADIAN LENDERS' RIGHTS:  LIMITATIONS ON AGENT'S AND
CANADIAN LENDERS' OBLIGATIONS

3.1  CONTINUED LIABILITY OF GRANTOR UNDER LICENSES, ETC.

     It is expressly agreed by Grantor that, anything herein to the contrary
notwithstanding, Grantor shall remain liable under each of its Contracts and
each of its Licenses to observe and perform all the conditions and obligations
to be observed and performed by it thereunder. Neither Canadian Agent nor any
Canadian Lender shall have any obligation or liability under any Contract or
License by reason of or arising out of this Agreement or the granting herein of
a Security Interest therein or the receipt by Canadian Agent or any Canadian
Lender of any payment relating to any Contract or License pursuant hereto.
Neither Canadian Agent nor any Canadian Lender shall be required or obligated in
any manner to perform or fulfill any of the obligations of Grantor under or
pursuant to any Contracts or License, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any Contract or License, or to
present or file any claims, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

3.2  NOTICE TO ACCOUNT DEBTORS

     Without in any way limiting the provisions of the Credit Agreement,
Canadian Agent may, at any time after an Event of Default has occurred and is
continuing (or if any rights of set-off (other than set-offs against an Account
arising under the Contracts giving rise to the same Account) or contra accounts
may be asserted with respect to the following), without prior notice to Grantor,
notify any Account Debtors and other Persons obligated on the Collateral that
Canadian Agent has a security interest therein, and that payments shall be made
directly to Canadian Agent for its benefit and the benefit of Canadian Lenders.
Upon the request of



<PAGE>


                                      -5-


Canadian Agent in such circumstances, Grantor shall so notify such Account
Debtors and other Persons obligated on the Collateral. Once any such notice has
been given to any Account Debtor or other Person obligated on the Collateral,
Grantor shall not give any contrary instructions to such Account Debtor or other
Person without Canadian Agent's prior written consent.

3.3  VERIFICATION OF ACCOUNTS

Canadian Agent may at any time, in Canadian Agent's own name, the name of a
nominee of Canadian Agent or in the name of Grantor, communicate (by mail,
telephone, facsimile or otherwise) with Account Debtors, parties to Contracts,
obligors in respect of Instruments and obligors in respect of Chattel Paper to
verify with such Persons, to Canadian Agent's satisfaction, the existence,
amount, terms of and any other matter relating to any such Accounts, Contracts,
Instruments or Chattel Paper, provided that; prior to any such communication
Agent shall endeavor to notify Grantor of its intended communication (unless an
Event of Default has occurred and is continuing). If a Default or Event of
Default shall have occurred and be continuing, Grantor, at its own expense,
shall cause the independent chartered accountants then engaged by such Grantor
to prepare and deliver to Canadian Agent and each Canadian Lender at any time
and from time to time promptly upon Canadian Agent's request the following
reports with respect to Grantor: (i) a reconciliation of all Accounts; (ii) an
aging of all Accounts; (iii) trial balances; and (iv) a test verification of
such Accounts as Canadian Agent may request. Grantor, at its own expense, shall
deliver to Canadian Agent the results of each physical verification, if any,
which Grantor may in its discretion have made, or caused any other Person to
have made on its behalf, of all or any portion of its Inventory.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF GRANTOR

4.1  REPRESENTATIONS AND WARRANTIES

     Grantor represents and warrants that:

(1) Grantor's correct incorporated name is "Blount Holdings Ltd." and there is
no French language version of its incorporated name;

(2) Grantor is the sole owner of each item of the Collateral upon which it
purports to grant a Security Interest hereunder, and has good and marketable
title thereto free and clear of any and all Liens other than Permitted
Encumbrances;

(3) no effective security agreement, financing statement, equivalent security or
Lien instrument or continuation statement covering all or any part of the
Collateral is on file or of record in any public office, except such as may have
been filed (i) by Grantor in favour of Canadian Agent, pursuant to this
Agreement or the other Loan Documents, and (ii) in connection with any other
Permitted Encumbrances;

(4) this Agreement is effective to create a valid and continuing Security
Interest on and, upon the filing of the appropriate financing statements listed
on Schedule hereto, a perfected Security Interest in favour of Canadian Agent,
for its benefit and the benefit of Canadian Lenders, on the Collateral with
respect to which a security interest may be perfected by filing pursuant to the
PPSA. Such Security Interest is prior to all other Liens, except Permitted



<PAGE>


                                      -6-

Encumbrances that would be prior to the Security Interest in favour of
Canadian Agent for the benefit of Canadian Agent and Canadian Lenders as a
matter of law, and is enforceable as such as against any and all creditors of
and purchasers from Grantor (other than purchasers or lessees of Inventory in
the ordinary course of business). All action by Grantor necessary or desirable
to protect and perfect such Security Interest on each item of the Collateral
has been duly taken;

(5) Schedule hereto lists all Instruments and Chattel Paper of Grantor. Except
as disclosed on Schedule 4.1(5), all action by Grantor necessary or desirable
to protect and perfect the Security Interest of Canadian Agent on each item
set forth on Schedule (including the delivery of all originals thereof to
Canadian Agent and the legending of all Chattel Paper as required by Section
hereof) has been duly taken. The Security Interest of Canadian Agent, for the
benefit of Canadian Agent and Canadian Lenders, on the Collateral listed on
Schedule hereto is prior to all other Liens, except Permitted Encumbrances
that would be prior to the Security Interest in favour of Canadian Agent as a
matter of law, and is enforceable as such against any and all creditors of and
purchasers from Grantor;

(6) Grantor's jurisdiction of incorporation, chief executive office, principal
place of business, registered office according to its constating documents,
corporate offices, all warehouses and premises where Collateral is stored or
located, and the locations of all of its books and records concerning the
Collateral and all Account Debtors are set forth on Schedule hereto;

(7) with respect to the Accounts of Grantor, except as specifically disclosed
in the most recent Collateral Report delivered by Grantor to Canadian Agent,
(i) they represent bona fide sales of Inventory or rendering of services to
Account Debtors in the ordinary course of Grantor's business and are not
evidenced by a judgment, Instrument or Chattel Paper; (ii) there are no set-
offs, claims or disputes existing or asserted with respect thereto and Grantor
has made no agreement with any Account Debtor for any extension of time for
the payment thereof, any compromise or settlement for less than the full
amount thereof, any release of any Account Debtor from liability therefor, or
any deduction therefrom except a discount or allowance allowed by Grantor in
the ordinary course of its business for prompt payment and disclosed to
Canadian Agent; (iii) to Grantor's knowledge, there are no facts, events or
occurrences which in any way impair the validity or enforceability thereof or
could reasonably be expected to reduce the amount payable thereunder as shown
on Grantor's books and records and any invoices, statements and Collateral
Reports delivered to Canadian Agent and Canadian Lenders with respect thereto;
(iv) Grantor has no notice of proceedings or actions which are pending or
threatened against any Account Debtor which might result in any adverse change
in such Account Debtor's financial condition; and (v) Grantor has no knowledge
that any Account Debtor is unable generally to pay its accounts as they become
due. Further, with respect to the Accounts (x) the amounts shown on all
invoices, statements and collateral reports which may be delivered to Canadian
Agent with respect thereto are actually and absolutely owing to Grantor as
indicated thereon and are not in any way contingent; (y) no payments have been
or shall be made thereon except payments immediately delivered to the
applicable Blocked Accounts in the name of Grantor or Canadian Agent as
required pursuant to the terms of Annex C to the Credit Agreement; and (z) to
Grantor's knowledge, all Account Debtors have the capacity to contract;

(8) all Inventory purchased by Grantor is purchased free and clear of any and
all Liens and other adverse claims other than unpaid suppliers' rights to
repossess goods under Section 81.1 of


<PAGE>


                                     -6-


the Bankruptcy and Insolvency Act (Canada) and such suppliers' substantially
similar rights under the Civil Code of Quebec;

(9) with respect to any Inventory scheduled or listed on the most recent
Collateral Report delivered by Grantor to Canadian Agent pursuant to the terms
of this Agreement or the Credit Agreement, (i) such Inventory is located at
one of Grantor's locations or the location of a customer of Grantor set forth
on Schedule hereto, (ii) no Inventory is now, or shall at any time or times
hereafter be stored at any other location without Canadian Agent's prior
consent and if Canadian Agent gives such consent, Grantor will concurrently
therewith obtain, to the extent required by the Credit Agreement, bailee,
landlord and mortgagee agreements, (iii) the Grantor has good title to such
Inventory and, subject to Section hereof, such property is not subject to any
Lien or security interest or document whatsoever except for the Security
Interest granted to Canadian Agent, for the benefit of Canadian Agent and
Canadian Lenders, and except for Permitted Encumbrances, (iv) except as
specifically disclosed in the most recent Collateral Report delivered by
Grantor to Canadian Agent, such Inventory is Eligible Inventory, of good and
merchantable quality, free from any defects, (v) such Inventory is not subject
to any licensing, patent, royalty, trademark, trade name, industrial design or
copyright agreements with any third parties which would require any consent of
any third party upon sale or disposition of that Inventory or the payment of
any money to any third party upon such sale or other disposition, and (vi)
except as disclosed in the most recent Collateral Report delivered to the
Canadian Agent, the completion of manufacture, sale or other disposition of
such Inventory by Canadian Agent, following an Event of Default, shall not
require the consent of any Person and shall not constitute a breach or default
under any contract or agreement to which Grantor is a party or to which such
property is subject;

(10) Grantor has no interest in, or title to, any Design, Patent, Trademark or
Copyright except as set forth in Schedule hereto. This Agreement is effective
to create a valid and continuing security interest on and, upon filing of this
Agreement with the Canadian Intellectual Property Office and of the financing
statement pursuant to the PPSA and listed on Schedule , perfected security
interest in favour of Canadian Agent on Grantor's Designs, Patents, Trademarks
and Copyrights, and such perfected security interest is enforceable as such as
against any and all creditors of and purchasers from Grantor. Upon completion
of the filings referred to in the immediately preceding sentence, all action
necessary or desirable to protect and perfect Canadian Agent's Security
Interest on Grantor's Designs, Patents, Trademarks or Copyrights shall have
been duly taken; and

(11) This Agreement has been duly authorized, executed and delivered by
Grantor and constitutes a legal, valid and binding obligation of Grantor
enforceable against Grantor in accordance with its terms, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief and other equitable remedies are
subject to the discretion of the court before which any proceeding therefor
may be brought.


<PAGE>


                                     -7-



SECTION 5.  COVENANTS OF THE GRANTOR

5.1  COVENANTS

     Grantor covenants and agrees with Canadian Agent, for the benefit of
Canadian Agent and Canadian Lenders, that from and after the date of this
Agreement and until the Termination Date:

(1) LIMITATION ON LIENS ON COLLATERAL. Grantor will not create, permit or
suffer to exist, and Grantor will defend the Collateral against, and take such
other action as is necessary to remove, any Lien on the Collateral except
Permitted Encumbrances, and will defend the right, title and interest of
Canadian Agent and Canadian Lenders in and to any of Grantor's rights in
respect of the Collateral against the claims and demands of all Persons
whomsoever.

(2) LIMITATIONS ON DISPOSITION. Grantor will not sell, lease, transfer or
otherwise dispose of any of the Collateral, or attempt or contract to do so
except as permitted by the Credit Agreement.

(3) NOTICE TO CANADIAN AGENT. Grantor will advise Canadian Agent promptly, in
reasonable detail, (i) of any Lien (other than Permitted Encumbrances) or
claim made or asserted against any of the Collateral, and (ii) of the
occurrence of any other event which would have a Material Adverse Effect on
the aggregate value of the Collateral or on the Liens created hereunder or
under any other Loan Document.

(4) NO ACCESSIONS. Grantor shall prevent Collateral, except for Collateral
disposed of as permitted hereby or under the Credit Agreement, from being or
becoming an Accession not covered by this Agreement.

(5) MAINTENANCE OF RECORDS. Grantor shall keep and maintain, at its own cost
and expense, satisfactory and complete records of the Collateral, including a
record of any and all payments received and any and all credits granted with
respect to the Collateral and all other dealings with the Collateral. Grantor
shall mark its books and records pertaining to the Collateral to evidence this
Agreement and the Security Interests granted hereby. If Grantor retains
possession of any Chattel Paper or Instrument with Canadian Agent's consent,
such Chattel Paper and Instruments shall be marked with the following legend:
"This writing and the obligations evidenced or secured hereby are subject to
the security interest of General Electric Capital Canada Inc., as Canadian
Agent, for the benefit of Canadian Agent and certain Canadian Lenders."

(6) FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS; CHATTEL PAPER. At any time and
from time to time, upon the written request of Canadian Agent and at the sole
expense of Grantor, Grantor shall promptly and duly execute and deliver any
and all such further instruments and documents (including deeds of hypothec
with respect to Collateral located in the Province of Quebec) and take such
further actions as Canadian Agent may deem desirable to obtain the full
benefits of this Agreement and the other Loan Documents to which Grantor is a
party and of the rights and powers herein and therein granted, including (i)
using its commercially reasonable efforts to secure all consents and approvals
necessary or appropriate for the assignment to or for the benefit of Canadian
Agent of any License or Contract held by such Grantor or in which such Grantor
has any rights not heretofore assigned, (ii) filing any financing or financing
change


<PAGE>


                                     -8-

statements (or applicable similar instruments) under applicable law with
respect to the Security Interest granted hereunder or any Liens granted under
any other Loan Document to which Grantor is a party, (iii) unless Canadian
Agent shall otherwise consent in writing (which consent may be revoked),
delivering to Canadian Agent all Collateral consisting of negotiable Documents
of Title, certificated Securities, Chattel Paper and Instruments (in each
case, accompanied by share transfer powers, allonges or other instruments of
transfer executed in blank) promptly after Grantor receives same;
notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing, Grantor may retain for collection in the ordinary
course of business all Chattel Paper or Instruments received by Grantor in the
ordinary course of business, (iv) Grantor shall, in accordance with the Credit
Agreement, obtain or use its commercially reasonable efforts to obtain,
waivers or subordinations of Liens from landlords and mortgagees and Grantor
shall in all instances obtain signed acknowledgements of Canadian Agent's
Liens from bailees having possession of any Grantor's Goods that they hold for
the benefit of Canadian Agent, (v) in accordance with Annex C to the Credit
Agreement, Grantor shall obtain a blocked account, lockbox or similar
agreement with each bank or financial institution holding a Deposit Account
for Grantor, and (vi) upon request by Canadian Agent, if Grantor is or becomes
a beneficiary of a letter of credit, it shall promptly and, in any event,
within two (2) Business Days after becoming a beneficiary, notify Canadian
Agent thereof and, enter into a tri-party agreement with Canadian Agent and
the issuer and/or confirmation bank with respect to letter-of-credit rights
assigning such letter-of-credit rights to Canadian Agent and directing all
payments thereunder to the Canadian Collection Account. Grantor also hereby
authorizes Canadian Agent, for the benefit of Canadian Agent and Canadian
Lenders, to file any such financing statements or financing change statements
(or applicable similar instruments) without the signature of Grantor to the
extent permitted by applicable law. If any amount payable under or in
connection with any of the Collateral is or shall become evidenced by any
Instrument, such Instrument, other than cheques and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory
to Canadian Agent immediately upon Grantor's receipt thereof.

(7) INDEMNIFICATION. In any suit, proceeding or action brought by Canadian
Agent or any Canadian Lender relating to any Collateral for any sum owing with
respect thereto or to enforce any rights or claims with respect thereto,
Grantor will save, indemnify and keep Canadian Agent and Canadian Lenders
harmless from and against all expense (including reasonable legal fees and
expenses), loss or damage suffered by reason of any defence, set-off,
counterclaim, recoupment or reduction of liability whatsoever of the Account
Debtor or other Person obligated on the Collateral, arising out of a breach by
Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favour of, such obligor
or its successors from Grantor, except in the case of Canadian Agent or any
Canadian Lender, to the extent such expense, loss, or damage is attributable
solely to the gross negligence or wilful misconduct of Canadian Agent or such
Canadian Lender as finally determined by a court of competent jurisdiction.
All such obligations of Grantor shall be and remain enforceable against and
only against Grantor and shall not be enforceable against Canadian Agent or
any Canadian Lender. This indemnification provision shall survive the
termination of this Agreement and the repayment of the Secured Obligations.


<PAGE>


                                     -9-



(8) COMPLIANCE WITH TERMS OF ACCOUNTS, ETC. In all material respects, Grantor
will perform and comply with all obligations in respect of the Collateral and
all other agreements to which it is a party or by which it is bound relating
to the Collateral.

(9)  INTELLECTUAL PROPERTY COLLATERAL.

     (a)  Grantor shall notify Canadian Agent immediately if it knows or has
          reason to know that any application or registration relating to any
          of Grantor's Designs, Patents, Trademarks or Copyrights (now or
          hereafter existing) may become abandoned or of any adverse
          determination or development (including the institution of, or any
          such determination or development in, any proceeding in the Canadian
          Intellectual Property Office or the United States Patent and
          Trademark Office or the United States Copyright Office or any court)
          regarding Grantor's ownership of any Design, Patent, Trademark or
          Copyright, its rights to register the same, or to keep and maintain
          the same.

     (b)  In no event shall Grantor, either itself or through any agent,
          employee, licensee or designee, file an application for the
          registration of any Design, Patent, Trademark or Copyright with any
          Canadian Intellectual Property Office or the United States Patent
          and Trademark Office or the United States Copyright Office or any
          similar office or agency without giving Canadian Agent written
          notice thereof on or before the immediately following date with
          respect to which quarterly financial statements of Holdings are due
          pursuant to Annex E to the Credit Agreement, and, upon request of
          Canadian Agent, Grantor shall execute and deliver any and all
          intellectual property security agreements, as Canadian Agent may
          reasonably request to evidence Canadian Agent's Lien on such Design,
          Patent, Trademark or Copyright, and the Intangibles of Grantor
          relating thereto or represented thereby.

     (c)  Grantor shall take all actions necessary or reasonably requested by
          Canadian Agent to maintain and pursue each application, to obtain
          the relevant registration and to maintain the registration of each
          of Grantor's Designs, Patents, Trademarks and Copyrights (now or
          hereafter existing), including the filing of applications for
          renewal, affidavits or declarations of use, affidavits of non-
          contestability and opposition and interference and cancellation
          proceedings.

     (d)  In the event that any of Grantor's Design, Patent, Trademark or
          Copyright Collateral is infringed upon, or misappropriated or
          diluted by a third party, Grantor shall notify Canadian Agent
          promptly after Grantor learns thereof. Grantor shall, unless Grantor
          shall reasonably determine that such Design, Patent, Trademark or
          Copyright Collateral is in no way material to the conduct of its
          business or operations, promptly sue for infringement, if such
          Grantor reasonably determines that such suit would have a reasonable
          probability of success, misappropriation or dilution and to recover
          any and all damages for such infringement, misappropriation or
          dilution, and shall take such other actions as Canadian Agent shall
          reasonably deem appropriate under the circumstances to protect such
          Design, Patent, Trademark or Copyright Collateral.


<PAGE>


                                     -11-



(10) FURTHER IDENTIFICATION OF COLLATERAL. Grantor will, if so requested by
Canadian Agent, furnish to Canadian Agent, as often as Canadian Agent
requests, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
Canadian Agent may reasonably request, all in such detail as Canadian Agent
may specify. Grantor shall promptly, and in any event by the end of each
fiscal quarter, notify Canadian Agent in writing upon acquiring any interest
hereafter in property that is of a type where a security interest or lien must
be or may be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation.

(11) CERTIFICATES OF STATUS. Not less frequently than once during each
calendar quarter, Grantor shall, unless Canadian Agent shall otherwise
consent, provide to Canadian Agent a certificate of compliance or status from
its jurisdiction of incorporation.

(12) NO REINCORPORATION. Grantor shall provide Canadian Agent with at least
thirty (30) days prior written notice of any change in the information
contained in Schedule 4.1(6) hereto, as applicable to keep said Schedule
4.1(6) up to date and accurate. Without limiting the prohibitions on mergers
or amalgamations involving Grantor contained in the Credit Agreement, Grantor
shall not reincorporate, reorganize or continue itself under the laws of any
jurisdiction outside the federal law of Canada without the prior written
consent of Canadian Agent.

(13) AMENDMENTS NOT AUTHORIZED. Grantor acknowledges that it is not authorized
to file any financing change statement with respect to any financing statement
that has been filed in respect of any Collateral Document without the prior
written consent of Canadian Agent.

(14) WITHHOLDING TAX. Without limiting any of Grantor's other obligations
under any other Loan Document, and for greater certainty, Grantor agrees to
pay and remit to the Canada Customs and Revenue Agency and any other
applicable Governmental Authority when due all Canadian withholding taxes
exigible in respect of any transfers from the Blocked Accounts (or any other
accounts pledged in favour of the Canadian Agent) to any Collection Account.
Upon request from Canadian Agent, Grantor shall provide to Canadian Agent the
original or a certified copy of a receipt evidencing such payment or, if such
taxes are not exigible on any such transfer, a reasonably detailed explanation
(with reference to the type of intercompany transaction to which the
transfer/payment relates) therefor.



SECTION 6.  REMEDIES

6.1  APPOINTMENT OF RECEIVER

     Upon the occurrence of and during the continuance of any Event of
Default, Canadian Agent may appoint or reappoint by instrument in writing, any
Person or Persons, whether an officer or officers or an employee or employees
of Canadian Agent or not, to be an interim receiver, receiver or receivers
(hereinafter called a "RECEIVER", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in
his/her/its stead. Any such Receiver shall, so far as concerns responsibility
for his/her/its acts, be deemed the agent of Grantor and not Canadian Agent or
any of Canadian Lenders, and neither Canadian


<PAGE>


                                     -12-

Agent nor any of Canadian Lenders shall be in any way responsible for any
misconduct, negligence or non-feasance on the part of any such Receiver or
his/her/its servants, agents or employees. Subject to the provisions of the
instrument appointing him/her/it, any such Receiver shall have power to take
possession of Collateral, to preserve Collateral or its value, to carry on or
concur in carrying on all or any part of the business of Grantor and to sell,
lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of Collateral. To facilitate the foregoing
powers, any such Receiver may, to the exclusion of all others, including
Grantor, enter upon, use and occupy all premises owned or occupied by Grantor
wherein Collateral may be situate, maintain Collateral upon such premises,
borrow money on a secured or unsecured basis and use Collateral directly in
carrying on Grantor's business or as security for loans or advances to enable
the Receiver to carry on Grantor's business or otherwise, as such Receiver
shall, in its discretion, determine. Except as may be otherwise directed by
Canadian Agent, all Money received from time to time by such Receiver in
carrying out his/her/its appointment shall be received in trust for and be
paid over to Canadian Agent. Every such Receiver may, in the discretion of
Canadian Agent, be vested with all or any of the rights and powers of Canadian
Agent.

6.2  EXERCISE OF RIGHTS BY CANADIAN AGENT

     Upon and during the continuance of any Event of Default, Canadian Agent
may, either directly or through its agents or nominees, exercise any or all of
the powers and rights given to a Receiver by virtue of Section .

6.3  TAKING POSSESSION OF COLLATERAL

     Upon the occurrence and during the continuance of an Event of Default,
Canadian Agent may take possession of, collect, demand, sue on, enforce,
recover and receive Collateral and give valid and binding receipts and
discharges therefor and in respect thereof and Canadian Agent also may sell,
license, lease or otherwise dispose of Collateral in such manner, at such time
or times and place or places, for such consideration and upon such terms and
conditions as to Canadian Agent may seem reasonable and in compliance with
applicable law.

6.4  RIGHTS AND REMEDIES UNDER PPSA

     In addition to those rights granted herein and in any other agreement now
or hereafter in effect between Grantor and Canadian Agent and any Canadian
Lender, and in addition to any other rights Canadian Agent or Canadian Lenders
may have at law or in equity, Canadian Agent shall have, both before and after
the occurrence of any Event of Default, all rights and remedies of a secured
party under the PPSA. However, Canadian Agent shall not be liable or
accountable for any failure to exercise its remedies, take possession of,
collect, enforce, realize, sell, lease, license or otherwise dispose of
Collateral or to institute any proceedings for such purposes. Furthermore,
none of Canadian Agent or Canadian Lenders shall have any obligation to take
any steps to preserve rights against prior parties to any Instrument or
Chattel Paper, whether Collateral or proceeds and whether or not in Canadian
Agent's or any Canadian Lender's possession, and shall not be liable or
accountable for failure to do so.


<PAGE>


                                     -13-



6.5  CO-OPERATION OF GRANTOR WITH RESPECT TO TAKING POSSESSION

     Grantor acknowledges that, after and during the continuance of an Event
of Default, Canadian Agent or any Receiver appointed by it may take possession
of Collateral wherever it may be located and by any method permitted by law
and Grantor agrees upon request from Canadian Agent or any such Receiver to
assemble and deliver possession of Collateral at such place or places as
directed.

6.6  COSTS

     Grantor agrees to be liable for and to pay all costs, charges and
expenses reasonably incurred by Canadian Agent, any Canadian Lender or any
Receiver appointed by Canadian Agent, whether directly or for services
rendered (including reasonable legal and auditors' costs and expenses and
Receiver remuneration), in operating Grantor's accounts, in preparing or
enforcing this Agreement, taking and maintaining custody of, preserving,
repairing, processing, preparing for disposition and disposing of Collateral
and in enforcing or collecting indebtedness and all such costs, charges and
expenses, together with any amounts owing as a result of any borrowing by
Canadian Agent, any Canadian Lender or any Receiver appointed by Canadian
Agent, as permitted hereby, shall be a first priority Security Interest on the
proceeds of realization, collection or disposition of Collateral and shall be
secured hereby.

6.7  NOTICE OF SALE

     The Canadian Agent will give Grantor such notice, if any, of the date,
time and place of any public sale or of the date after which any private
disposition of Collateral is to be made as may be required by the PPSA.

6.8  GRANT OF LICENCE TO USE INTELLECTUAL PROPERTY COLLATERAL

     For the purpose of enabling Canadian Agent to exercise rights and
remedies under Section 6 hereof (including, without limiting the terms of
Section 6 hereof, in order to take possession of, hold, preserve, process,
assemble, prepare for sale, market for sale, sell or otherwise dispose of
Collateral) at such time as Canadian Agent shall be lawfully entitled to
exercise such rights and remedies, Grantor hereby grants to Canadian Agent,
for the benefit of Canadian Agent and Canadian Lenders, an irrevocable, non-
exclusive licence (exercisable without payment of royalty or other
compensation to Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by Grantor, and wherever the same may
be located, and including in such license 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.

6.9   LIMITATION ON CANADIAN AGENT'S AND CANADIAN LENDERS' DUTY IN RESPECT OF
      COLLATERAL

     Canadian Agent and each Canadian Lender shall use reasonable care with
respect to the Collateral in its possession or under its control. Beyond the
safe custody thereof, neither Canadian Agent nor any Canadian Lender shall
have any other duty as to any Collateral in its possession or control or in
the possession or control of any agent or nominee of Canadian Agent or such


<PAGE>


                                     -14-


Canadian Lender, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.

6.10  WAIVER BY GRANTOR

     To the maximum extent permitted by applicable law, Grantor waives all
claims, damages and demands against Canadian Agent or any Canadian Lender or
any Receiver appointed by Canadian Agent arising out of the repossession,
retention or sale of the Collateral except such as arise solely out of the
gross negligence or wilful misconduct of Canadian Agent or any Canadian Lender
or any Receiver appointed by Canadian Agent as finally determined by a court
of competent jurisdiction.

6.11  ACKNOWLEDGEMENT BY GRANTOR

     To the extent that applicable law imposes duties on Canadian Agent to
exercise remedies in a commercially reasonable manner, Grantor acknowledges
and agrees that it is not commercially unreasonable for Canadian Agent (i) to
fail to incur expenses reasonably deemed significant by Canadian Agent to
prepare the Collateral for disposition or otherwise to complete raw material
or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to the
Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or
disposition of the Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against Account Debtors or other Persons
obligated on the Collateral or to remove Liens on or any adverse claims
against the Collateral, (iv) to exercise collection remedies against Account
Debtors and other Persons obligated on the Collateral directly or through the
use of collection agencies and other collection specialists, (v) to advertise
dispositions of the Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business of Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in the
disposition of the Collateral, whether or not the Collateral is of a
specialized nature, (viii) to dispose of the Collateral by utilizing internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather
than retail markets, (x) to disclaim disposition warranties, such as title,
possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure Canadian Agent and Canadian Lenders against risks of
loss, collection or disposition of the Collateral or to provide to Canadian
Agent and Canadian Lenders a guaranteed return from the collection or
disposition of the Collateral, or (xii) to the extent deemed appropriate by
Canadian Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Canadian Agent in the collection
or disposition of any of the Collateral. Grantor acknowledges that the purpose
of this Section is to provide non-exhaustive indications of what actions or
omissions by Canadian Agent would not be commercially unreasonable in the
Canadian Agent's exercise of remedies against the Collateral and that other
actions or omissions by Canadian Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 6.11.
Without limitation upon the foregoing, nothing contained in this Section shall
be construed to grant any rights to Grantor or to


<PAGE>


                                     -15-



impose duties on Canadian Agent that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section 6.11.

SECTION 7.  MISCELLANEOUS

7.1  EXTENSIONS, ETC.

     Canadian Agent may grant extensions of time and other indulgences, take
and give up security, accept compositions, compound, compromise, settle, grant
releases and discharges and otherwise deal with Grantor, debtors of Grantor,
any other Credit Party, sureties and others and with Collateral and other
security as Canadian Agent may see fit without prejudice to the liability of
Grantor or Canadian Agent's right to hold and realize the Security Interest.
Furthermore, without limiting any other provision hereof, after and during the
continuance of an Event of Default, Canadian Agent may demand, collect and sue
on Collateral in either Grantor's or Canadian Agent's name, at Canadian
Agent's option, and may endorse Grantor's name on any and all cheques,
commercial paper, and any other Instruments pertaining to or constituting
Collateral. Nothing herein contained shall in any way obligate Canadian Agent
to grant, continue, renew, extend time for payment of or accept anything which
constitutes or would constitute Obligations.

7.2  NO WAIVER

     No delay or omission by Canadian Agent in exercising any right or remedy
hereunder or with respect to any of the Obligations shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise
of any other right or remedy. Furthermore, Canadian Agent may remedy any
default by Grantor hereunder or with respect to any Obligations in any
reasonable manner without waiving the default remedied and without waiving any
other prior or subsequent default by Grantor. All rights and remedies of
Canadian Agent granted or recognized herein are cumulative and may be
exercised at any time and from time to time independently or in combination.

7.3  WAIVER OF PROTEST

     Grantor waives protest of any Instrument constituting Collateral at any
time held by Canadian Agent on which Grantor is in any way liable and, subject
to Section hereof, notice of any other action taken by Canadian Agent, each to
the extent permitted by applicable law.

7.4  ASSIGNMENT AND ENUREMENT

     This Agreement and all obligations of Grantor hereunder shall be binding
upon the successors and assigns of Grantor (including any debtor-in-possession
on behalf of Grantor) and shall, together with the rights and remedies of
Canadian Agent, for the benefit of Canadian Agent and Canadian Lenders,
hereunder, enure to the benefit of Canadian Agent and Canadian Lenders, all
future holders of any instrument evidencing any of the obligations of any
other Credit Party and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of
any agreement governing or instrument evidencing the obligations of any other
Credit Party or any portion thereof or interest therein shall in any


<PAGE>


                                     -16-

manner affect the Security Interest granted to Canadian Agent, for the benefit
of Canadian Agent and Canadian Lenders, hereunder. Grantor may not assign,
sell, hypothecate or otherwise transfer any interest in or obligation under
this Agreement.

7.5  AMENDMENT

     Save for any schedules which may be added hereto pursuant to the
provisions hereof, no modification, variation or amendment of any provision of
this Agreement shall be made except by a written agreement, executed by the
parties hereto and no waiver of any provision hereof shall be effective unless
in writing.

7.6  NOTICES

     Except as otherwise provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon one party by the other
party, or whenever one party desires to give or serve upon the other party any
communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be
validly served, given or delivered if served, given or delivered in accordance
with the Credit Agreement.

7.7  REMEDIES CUMULATIVE

     This Agreement and the security afforded hereby is in addition to and not
in substitution for any other security now or hereafter held by Canadian Agent
and is intended to be a continuing security agreement and shall remain in full
force and effect until all Obligations and any extensions or renewals thereof
together with interest accruing thereon shall be paid in full.

7.8  HEADINGS

     The headings used in this Agreement are for convenience only and are not
to be considered a part of this Agreement and do not in any way limit or
amplify the terms and provisions of this Agreement.

7.9  REINSTATEMENT

     This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against Grantor for liquidation
or reorganization, should Grantor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee or
similar Person be appointed for all or any significant part of Grantor's
assets, and shall continue to be effective or be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference", "fraudulent conveyance", or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.


<PAGE>


                                     -17-


7.10 NUMBER AND GENDER

     When the context so requires, the singular number shall be read as if the
plural were expressed and the provisions hereof shall be read with all
grammatical changes necessary dependent upon the person referred to being a
male, female, firm or corporation.

7.11 LIMITATION BY LAW; SEVERABILITY

     All rights, remedies and powers provided in this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of law that may
be controlling and to be limited to the extent necessary so that they shall
not render this Agreement invalid, unenforceable, in whole or in part, or not
entitled to be recorded, registered or filed under the provisions of any
applicable law. In the event any provisions of this Agreement, as amended from
time to time, shall be deemed invalid or void, in whole or in part, by any
Court of competent jurisdiction, the remaining terms and provisions of this
Agreement shall remain in full force and effect.

7.12 ATTACHMENT

     The Security Interest created hereby is intended to attach when this
Agreement is signed by Grantor and delivered to Canadian Agent.

7.13 AMALGAMATION

     Grantor acknowledges and agrees that, in the event it amalgamates with
any other company or companies, it is the intention of the parties hereto that
the term "Grantor", when used herein, shall apply to each of the amalgamating
companies and to the amalgamated company, such that the Security Interest
granted hereby:

(1) shall extend to "Collateral" (as that term is herein defined) owned by
each of the amalgamating companies and the amalgamated company at the time of
amalgamation and to any "Collateral" thereafter owned or acquired by the
amalgamated company, and

(2) shall secure all "Obligations" (as that term is herein defined) of each of
the amalgamating companies and the amalgamated company to Canadian Agent and
Canadian Lenders at the time of amalgamation and all "Obligations" of the
amalgamated company to Canadian Agent and Canadian Lenders thereafter arising.
The Security Interest shall attach to all "Collateral" owned by each company
amalgamating with Grantor, and by the amalgamated company, at the time of the
amalgamation, and shall attach to all "Collateral" thereafter owned or
acquired by the amalgamated company when such becomes owned or is acquired.

7.14 CANADIAN AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT

On the Closing Date, Grantor shall execute and deliver to Canadian Agent a
power of attorney (the "POWER OF ATTORNEY") substantially in the form attached
hereto as Exhibit A. The power of attorney granted pursuant to the Power of
Attorney is a power coupled with an interest and shall be irrevocable until
the Termination Date. The powers conferred on Canadian Agent, for the


<PAGE>


                                     -18-

benefit of Canadian Agent and Canadian Lenders, under the Power of Attorney
are solely to protect Canadian Agent's interests (for the benefit of Canadian
Agent and Canadian Lenders) in the Collateral and shall not impose any duty
upon Canadian Agent or any Canadian Lender to exercise any such powers.
Canadian Agent agrees that (a) it shall not exercise any power of attorney or
authority granted under the Power of Attorney unless an Event of Default has
occurred and is continuing, and (b) Canadian Agent shall account for any money
received by Canadian Agent in respect of any foreclosure on or disposition of
Collateral pursuant to the Power of Attorney provided that none of Canadian
Agent or Canadian Lenders shall have any duty as to any Collateral, and
Canadian Agent and Canadian Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers. NONE OF
AGENT, CANADIAN LENDERS OR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO GRANTOR FOR ANY
ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN
RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION,
NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

7.15 TERMINATION OF THIS AGREEMENT

     Subject to Section hereof, this Agreement shall terminate upon the
Termination Date.

7.16 FURTHER ASSURANCES

     Grantor hereby authorizes Canadian Agent to file such financing
statements, financing change statements and other documents and do such acts,
matters and things (including completing and adding schedules hereto
identifying Collateral or any Permitted Encumbrances affecting Collateral or
identifying the locations at which Grantor's business is carried on and
Collateral and records relating thereto are situate) as Canadian Agent may
reasonably deem appropriate to perfect on an ongoing basis and continue the
Security Interest, to protect and preserve Collateral and, following an Event
of Default, to realize upon the Security Interest.

7.17 GOVERNING LAW

     This Agreement and the transactions evidenced hereby shall be governed by
and construed in accordance with the laws of the province of Ontario and the
federal laws of Canada applicable therein, as the same may from time to time
be in effect, including, where applicable, the PPSA.

7.18 COUNTERPARTS

     This Agreement may be executed in any number of counterparts which shall,
collectively and separately constitute one agreement.


<PAGE>


                                     -19-

7.19 NO STRICT CONSTRUCTION

     The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise
favouring or disfavouring any party by virtue of the authorship of any
provisions of this Agreement.

7.20 ADVICE OF COUNSEL

     Each of the parties represents to each other party hereto that it has
discussed this Agreement with its counsel.

7.21 BENEFIT OF CANADIAN AGENT AND CANADIAN LENDERS

     All Liens granted or contemplated hereby shall be for the benefit of
Canadian Agent and Canadian Lenders, and all proceeds or payments realized
from Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of the Credit Agreement.

SECTION 8.  COPY OF AGREEMENT

8.1  COPY

     Grantor hereby acknowledges receipt of a copy of this Agreement.

8.2  WAIVER

     To the extent permitted by applicable law, Grantor waives Grantor's right
to receive a copy of any financing statement or financing change statement
registered by Canadian Agent, or of any verification statement with respect to
any financing statement or financing change statement registered by Canadian
Agent.

                          [INTENTIONALLY LEFT BLANK]








<PAGE>



                                     -20-





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

                                        BLOUNT HOLDINGS LTD.

                                                               c/s
                                        By: ---------------------------
                                            Name: Calvin E. Jenness
                                            Title: Treasurer


                                        GENERAL ELECTRIC CAPITAL
                                        CANADA INC., AS CANADIAN AGENT


                                                               c/s
                                        By: ---------------------------
                                            Name:
                                            Title:


<PAGE>


                         EXHIBIT A - POWER OF ATTORNEY

This Power of Attorney is executed and delivered by Blount Holdings Ltd., a
Canada corporation ("GRANTOR"), to General Electric Capital Canada Inc., a
Canada corporation (hereinafter referred to as "Attorney"), as Canadian Agent
for the benefit of Canadian Agent and Canadian Lenders, under a Security
Agreement, dated as of May 15, 2003, and other related documents (the "LOAN
DOCUMENTS"). No person to whom this Power of Attorney is presented, as
authority for Attorney to take any action or actions contemplated hereby,
shall be required to inquire into or seek confirmation from Grantor as to the
authority of Attorney to take any action described below, or as to the
existence of or fulfilment of any condition to this Power of Attorney, which
is intended to grant to Attorney unconditionally the authority to take and
perform the actions contemplated herein, and Grantor irrevocably waives any
right to commence any suit or action, in law or equity, against any person or
entity which acts in reliance upon or acknowledges the authority granted under
this Power of Attorney. The power of attorney granted hereby is coupled with
an interest and may not be revoked or cancelled by Grantor without Attorney's
written consent. Capitalized terms used herein and not defined herein shall
have the meanings ascribed to them in the Security Agreement.

     Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in its own name, from time to time in Attorney's
discretion, to take any and all appropriate action and to execute and deliver
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of the Loan Documents and, without limiting the
generality of the foregoing, Grantor hereby grants to Attorney the power and
right, on behalf of Grantor, without notice to or assent by Grantor, and at
any time, to do the following: (a) change the mailing address of Grantor, open
a post office box on behalf of Grantor, open mail for Grantor, and ask,
demand, collect, give acquittances and receipts for, take possession of,
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, and
notices in connection with any property of Grantor; (b) effect any repairs to
any asset of Grantor or continue or obtain any insurance and pay all or any
part of the premiums therefor and costs thereof, and make, settle and adjust
all claims under such policies of insurance, and make all determinations and
decisions with respect to such policies; (c) pay or discharge any taxes,
liens, security interests or other encumbrances levied or placed on or
threatened against Grantor or its property; (d) defend any suit, action or
proceeding brought against Grantor if Grantor does not defend such suit,
action or proceeding or if Attorney believes that Grantor is not pursuing such
defense in a manner that will maximize the recovery to Attorney, and settle,
compromise or adjust any suit, action, or proceeding described above and in
connection therewith, give such discharges or releases as Attorney may deem
appropriate; (e) file or prosecute any claim, litigation, suit or proceeding
in any court of competent jurisdiction or before any arbitrator, or take any
other action otherwise deemed appropriate by Attorney for the purpose of
collecting any and all such money due to Grantor whenever payable and to
enforce any other right in respect of Grantor's property; (f) cause the
certified charted accountants then engaged by Grantor to prepare and deliver
to Attorney at any time and from time to time, promptly upon Attorney's
request, the following reports: (1) a reconciliation of all accounts, (2) an
aging of all accounts, (3) trial balances, (4) test verifications of such
accounts as Attorney may request, and (5) the results of each physical
verification of inventory, (g) communicate in its own name with any party to
any Contracts with regard to the assignment of the right, title and interest
of such Grantor in and under the Contracts and other matters relating thereto;
and (h) execute, in


<PAGE>




connection with any sale provided for in any Loan Document, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral and to otherwise direct such sale or resale, all as though Attorney
were the absolute owner of the property of Grantor for all purposes, and to
do, at Attorney's option and Grantor's expense, at any time or from time to
time, all acts and other things that Attorney reasonably deems necessary to
perfect, preserve, or realize upon Grantor's property or assets and Attorney's
Security Interest thereon, all as fully and effectively as Grantor might do.
Grantor hereby ratifies, to the extent permitted by law, all that said
Attorney shall lawfully do or cause to be done by virtue hereof.

     THIS POWER OF ATTORNEY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE PROVINCE OF ONTARIO APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT PROVINCE.

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor pursuant to
the authority of its board of directors this _________ day of May, 2003.


                                        BLOUNT HOLDINGS LTD.


                                        By: ---------------------------
                                            Name: Calvin E. Jenness
                                            Title: Treasurer