Exhibit 10.10


 


EXECUTION COPY


 




 





CANADIAN COLLATERAL AGREEMENT 

(INTERCOMPANY NOTES)


 


dated as of


 


November 15, 2007


 


among


 


NOVAMERICAN STEEL INC.


and


 


BNY TRUST COMPANY OF CANADA


 


as Canadian Collateral Agent


 


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




 





 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I Definitions

  	
  1

  
	
   

  	
   

  
	
  SECTION 1.01. Terms Generally

  	
  1

  
	
  Other Defined Terms

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II Pledge of Securities

  	
  9

  
	
   

  	
   

  
	
  SECTION 2.01. Pledge

  	
  9

  
	
  SECTION 2.02. Delivery
  of the Pledged Collateral

  	
  10

  
	
  SECTION 2.03.
  Representations, Warranties and Covenants

  	
  11

  
	
  SECTION 2.04.
  Registration in Nominee Name; Denominations

  	
  13

  
	
  SECTION 2.05. Voting
  Rights; Dividends and Interest

  	
  13

  
	
   

  	
   

  
	
  ARTICLE III Security Interests
  in Personal Property

  	
  15

  
	
   

  	
   

  
	
  SECTION 3.01. Security Interest

  	
  15

  
	
  SECTION 3.02. Representations and
  Warranties

  	
  16

  
	
  SECTION 3.03. Covenants

  	
  17

  
	
  SECTION 3.04. Other Actions

  	
  21

  
	
  SECTION 3.05. Covenants Regarding Patent,
  Trademark and Copyright Collateral

  	
  23

  
	
   

  	
   

  
	
  ARTICLE IV Remedies

  	
  24

  
	
   

  	
   

  
	
  SECTION 4.01. Remedies Upon Default

  	
  24

  
	
  SECTION 4.02. Application of Proceeds

  	
  27

  
	
  SECTION 4.03. Grant of License to Use
  Intellectual Property

  	
  27

  
	
  SECTION 4.04. Securities Act

  	
  28

  
	
  SECTION 4.05. Registration

  	
  28

  
	
   

  	
   

  
	
  ARTICLE V Miscellaneous

  	
  29

  
	
   

  	
   

  
	
  SECTION 5.01. Notices

  	
  29

  
	
  SECTION 5.02. Waivers; Amendment

  	
  30

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

  	
  30

  
	
  SECTION 5.04. Successors and Assigns

  	
  31

  
	
  SECTION 5.05. Survival of Agreement

  	
  31

  
	
  SECTION 5.06. Counterparts; Effectiveness;
  Several Agreement

  	
  31

  
	
  SECTION 5.07. Severability

  	
  32

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

  	
  32

  
	
  SECTION 5.09. Judgment Currency

  	
  32

  
	
  SECTION 5.10. WAIVER OF JURY TRIAL

  	
  33

  
	
  SECTION 5.11. Headings

  	
  34

  
	
  SECTION 5.12. Security Interest Absolute

  	
  34

  
	
  SECTION 5.13. Termination or Release

  	
  34

  



 

















 


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

  	
  34

  
	
  SECTION 5.15. Intercreditor Agreement

  	
  35

  
	
  SECTION 5.16. Acknowledgments

  	
  36

  



 

















 


	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  Pledged Equity Interests; Pledged Debt Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  Form of
  Perfection Certificate

  	
   

  
	
  Exhibit II

  	
  Form of
  Patent and Trademark Security Agreement

  	
   

  
	
  Exhibit III

  	
  Form of
  Copyright Security Agreement

  	
   

  



 

















 


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


 


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


 


ARTICLE I


 


Definitions


 


SECTION 1.01. Terms
Generally


 


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


 

















 


to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any
definition of or reference to any statute, regulation or other law herein shall
be construed (i) as referring to such statute, regulation or other law as from
time to time amended, supplemented or otherwise modified (including by
succession of comparable successor statutes, regulations or other laws) and
(ii) to include all official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply, (c) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (d) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (e) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, and
(f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.


 


Other Defined Terms.
All terms defined in the PPSA (as defined below) and not defined in this
Agreement have the meanings specified therein, including, without limitation, “Accessions”,
“Accounts”, “Chattel Paper”, “Document of Title”, “Equipment”, “Goods”, “Instruments”,
“Inventory”, “Investment Property”, “Money”, “financing statement”, “financing
change statement” “Fixtures” and “Proceeds”. All terms defined in the STA (as
defined herein) and not defined in this Agreement have the meanings specified
therein, including, without limitation, “Certified Security”, “Entitlement
Holder”, “Entitlement Order”, “Financial Asset”, “Securities Account”, “Securities
Intermediary”, “Security Entitlement” and “Uncertificated Security”.


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


“Effective Date” means November 15, 2007.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


“Investment Property Control Agreement”  means:


 


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


 


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


 


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


 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


“Securities” means:


 


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


 


(b)           any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing; and


 


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


 


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


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


ARTICLE II


 


Pledge of Securities


 


SECTION 2.01. Pledge.


 


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


 


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


 


9

















 


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


 


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


 


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


 


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


 


(f)            all Proceeds of any of the foregoing


 


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


 


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


 


SECTION 2.02. Delivery of the Pledged Collateral.


 


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


 


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


 


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


 


10

















 


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


 


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


 


SECTION 2.03. Representations, Warranties and Covenants.


 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


(iii)          is held through a Securities Account;


 


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


 


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


 


SECTION 2.04. Registration in Nominee Name; Denominations. The
Canadian Collateral Agent, on behalf of the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged Securities in
its own name as pledgee, the name of its nominee (as pledgee or as sub-agent)
or the name of Grantor, endorsed or assigned in blank or in favor of the
Canadian Collateral Agent. Grantor will promptly give to the Canadian
Collateral Agent copies of any notices or other communications received by it
with respect to Pledged Securities registered in the name of Grantor. The
Canadian Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.


 


SECTION 2.05. Voting Rights;
Dividends and Interest.


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


14

















 


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


 


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


 


ARTICLE III


 


Security Interests in Personal Property


 


SECTION 3.01. Security Interest.


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


SECTION 3.02. Representations
and Warranties. Grantor represents and warrants to the Canadian Collateral
Agent and the Secured Parties that:


 


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


 


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


 


16

















 


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


 


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


 


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


 


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


 


SECTION 3.03. Covenants.


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


18

















 


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


 


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


 


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


 


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


 


19

















 


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


 


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


 


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


 


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


 


20

















 


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


 


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


 


SECTION 3.04. Other
Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Canadian Collateral Agent to enforce, the
Security Interest, Grantor agrees, in each case at Grantor’s own expense, to
take the following actions with respect to the following Other Collateral owned
by it and subject to the Security Interest:


 


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


 


(b)           Investment Property.


 


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


 


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


 


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


 


21

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


22

















 


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


 


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


 


SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright
Collateral.


 


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


 


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


 


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


 


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


 


23

















 


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


 


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


 


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


 


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


 


ARTICLE IV


 


Remedies


 


SECTION 4.01. Remedies
Upon Default.  Upon the occurrence and during the continuance of an
Event of Default, Grantor agrees to deliver each item of Collateral to the Canadian
Collateral Agent on demand, and it is agreed that the Canadian Collateral Agent
shall have the right to take any of or all the following actions at the same or
different times: (a) with respect to any Other Collateral consisting of
Intellectual 


 


24

















 


Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Other Collateral by Grantor to the Canadian Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or nonexclusive basis, any such Other Collateral throughout the world on such
terms and conditions and in such manner as the Canadian Collateral Agent shall
determine (other than in violation of any then-existing licensing arrangements
to the extent that waivers cannot be obtained), and (b) with or without
legal process and with or without prior notice or demand for performance, to
take possession of the Other Collateral and without liability for trespass to
enter any premises where the Other Collateral may be located for the purpose of
taking possession of or removing the Other Collateral and, generally, to
exercise any and all rights afforded to a secured party under the PPSA or other
applicable law. Without limiting the generality of the foregoing, Grantor
agrees that the Canadian Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all
or any part of the Collateral at a public or private sale or at any broker’s
board or on any securities exchange, for cash, upon credit or for future
delivery as the Canadian Collateral Agent shall deem appropriate. The Canadian
Collateral Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Canadian Collateral
Agent shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any sale of
Collateral shall hold the property sold absolutely, free from any claim or
right on the part of Grantor, and Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which Grantor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.


 


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


 


25

















 


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


 


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


 


26

















 


SECTION 4.02. Application
of Proceeds.  Subject to applicable laws, the Canadian Collateral
Agent shall apply the proceeds of any collection or sale of any Collateral, and
any Collateral consisting of cash, as follows:


 


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


 


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


 


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


 


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


 


SECTION 4.03. Grant
of License to Use Intellectual Property.  For the purpose of enabling
the Canadian Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Canadian Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, Grantor hereby grants to the
Canadian Collateral Agent an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to Grantor) to use, license or
sublicense any of the Other Collateral consisting of Intellectual Property now
owned or hereafter acquired by Grantor, and wherever the same may be located,
and including in such license reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The rights conferred by
such license may be exercised, at the option of the Canadian Collateral Agent,
upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or
other transaction entered into by the Canadian 


 


27

















 


Collateral Agent in accordance herewith shall
be binding upon Grantor notwithstanding any subsequent cure of an Event of
Default.


 


SECTION 4.04. Securities Act


 


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


 


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


 


28

















 


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


 


ARTICLE V


 


Miscellaneous


 


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


 


If to the
Canadian Collateral Agent:


 


BNY Trust
Company of Canada


Suite 1101


4 King Street
West


Toronto,
Ontario M5H 1B6


 


Attention:         Senior Trust Officer


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


 


If to the
Grantor:


 


c/o Symmetry
Holdings Inc.


28 West 44th
Street, 16th Floor


New York, New
York 10036


 


Attention:         General Counsel


Facsimile:         (646)
429-1541


 


29

















 


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


 


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


 


SECTION 5.03. Canadian
Collateral Agent’s Fees and Expenses; Indemnification. (a) Grantor agrees to
pay all reasonable out-of-pocket expenses incurred by the Canadian Collateral
Agent, including the reasonable fees, charges and disbursements of its counsel,
in connection with (i) the preparation, execution, delivery and administration
of this Agreement and any other Security Document, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or under any other Security Document
or (iv) the failure of Grantor to perform or observe any of the provisions
hereof.


 


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



 


30

















 


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


 


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


 


SECTION 5.04. Successors
and Assigns. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the permitted successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of Grantor or the Canadian Collateral Agent that are contained in this
Agreement shall bind and inure to the benefit of their respective successors
and assigns.


 


SECTION 5.05. Survival
of Agreement. All covenants, agreements, representations and warranties made by
Grantor in the Intercompany Notes Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Intercompany Notes Document shall be considered to have
been relied upon by the Secured Parties and shall survive the execution and
delivery of the Intercompany Notes Documents issuance of the Securities,
regardless of any investigation made by any Secured Party or on its behalf and
shall continue in full force and effect until this, Agreement shall terminate.


 


SECTION 5.06. Counterparts;
Effectiveness; Several Agreement. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile or electronic transmission shall
be as effective as delivery of a manually signed counterpart of this Agreement.
This Agreement shall become effective as to Grantor when a counterpart hereof
executed on behalf of Grantor shall have been delivered to the Canadian
Collateral Agent and a counterpart hereof shall have been executed on behalf of
the Canadian Collateral Agent, and thereafter shall be binding upon Grantor and
the Canadian Collateral Agent and their respective permitted successors and
assigns, and shall inure to the benefit of Grantor, the Canadian Collateral
Agent and the other Secured Parties and their respective successors and
assigns, except that Grantor shall not have the right to assign or transfer its
rights or obligations hereunder or any interest herein or in the Collateral
(and any such assignment or transfer shall be void) except as expressly
provided in this Agreement or the Financing Documents.


 


31
















 


SECTION 5.07. Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


 


SECTION 5.08. Governing
Law; Jurisdiction; Consent to Service of Process. This Agreement and the rights
and obligations of the parties under this agreement shall be construed in
accordance with and governed by the law of the province of Ontario, and the
laws of Canada applicable therein.


 


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


 


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


 


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


 


SECTION 5.09. Judgment
Currency.


 


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


 


32

















 


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


 


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


 


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


 


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


 


33

















 


SECTION 5.11. Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.


 


SECTION 5.12. Security
Interest Absolute.  All rights of the
Canadian Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Pledged Collateral and all obligations of Grantor
hereunder shall be absolute and unconditional irrespective of (a) any lack
of validity or enforceability of the Financing Documents, any other
Intercompany Notes Document, any agreement with respect to any of the
Intercompany Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Intercompany Obligations, or any
other amendment or waiver of or any consent to any departure from the Financing
Documents, any other Intercompany Notes Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on
other collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the Intercompany
Obligations, or (d) any other circumstance that might otherwise constitute
a defense available to, or a discharge of, Grantor in respect of the
Intercompany Obligations or this Agreement.


 


SECTION 5.13. Termination or Release.


 


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


 


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


 


SECTION 5.14. Canadian
Collateral Agent Appointed Attorney-in-Fact. 
Grantor hereby appoints the Canadian Collateral Agent the
attorney-in-fact of Grantor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instrument that the Canadian
Collateral Agent may deem


 


34





















 


necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, the Canadian Collateral Agent
shall have the right, upon the occurrence and during the continuance of an
Event of Default, with full power of substitution either in the Canadian
Collateral Agent’s name or in the name of Grantor (a) to receive, endorse,
assign or deliver any and all notes, acceptances, checks, drafts, money orders
or other evidences of payment relating to the Collateral or any part thereof;
(b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to sign the
name of Grantor on any invoice or bill of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of
the Collateral; (g) to notify, or to require Grantor to notify, Account
Debtors to make payment directly to the Canadian Collateral Agent; and
(h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all other
acts and things necessary to carry out the purposes of this Agreement, as fully
and completely as though the Canadian Collateral Agent were the absolute owner
of the Collateral for all purposes; provided
that nothing herein contained shall be construed as requiring or obligating the
Canadian Collateral Agent to make any commitment or to make any inquiry as to
the nature or sufficiency of any payment received by the Canadian Collateral
Agent, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become
due in respect thereof or any property covered thereby. The Canadian Collateral
Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees or agents
shall be responsible to Grantor for any act or failure to act hereunder, except
for their own gross negligence or wilful misconduct.


 


SECTION 5.15. Intercreditor
Agreement.  Notwithstanding anything
herein to the contrary: (a) the Liens granted to the Canadian Collateral Agent
or any agent or trustee thereof under this Agreement or any other Intercompany
Note Security Document on the ABL Collateral shall be junior and subordinated
in all respects to all Liens of the Revolving Credit Agent (as defined under
the Intercreditor Agreement) or any agent or trustee thereof in the ABL
Collateral, and (b) the exercise of the rights and remedies of the Canadian
Collateral Agent hereunder are otherwise subject to the provisions of the
Intercreditor Agreement binding on the Collateral Agent and the Senior Notes
Secured Parties (as defined in the Intercreditor Agreement). In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement or
any other Intercompany Note Security Document, the terms of the Intercreditor
Agreement shall govern and control. At any time prior to the Discharge of
Canadian Revolving Credit Obligations (as defined in the Intercreditor
Agreement), no Grantor shall be required to take or refrain from taking any
action at the request of the Canadian Collateral Agent with respect to any ABL
Collateral if such action or inaction would be inconsistent


 


35





















 


with (i) any action or inaction affirmatively
requested by the Revolving Credit Agent (as defined in the Intercreditor
Agreement) or any agent or trustee thereof or (ii) any action or inaction affirmatively
required by any of the provisions of the Revolving Credit Agreement (as defined
in the Intercreditor Agreement).


 


SECTION 5.16. Acknowledgments.


 


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


 


36

















 


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


 


 


	
   

  	
  NOVAMERICAN STEEL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Corrado De Gasperis

  
	
   

  	
   Name: Corrado De Gasperis

  
	
   

  	
   Title: President

  



 


37

















 


	
   

  	
  BNY TRUST COMPANY OF CANADA, AS

  
	
   

  	
  CANADIAN COLLATERAL AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia Benjamin

  
	
   

  	
  Name: Patricia Benjamin

  
	
   

  	
  Title: Authorized Officer

  



 


38

















 


Schedule I to the


Intercompany Note


Security Agreement


 


PLEDGED EQUITY INTERESTS; DEBT SECURITIES



EQUITY INTERESTS


 


	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage

  of Equity Interests

  
	
  632422 N.B.
  Ltd.

  	
   

  	
  3

  	
   

  	
  Novamerican Steel Inc.

  	
   

  	
  1 share of Common Stock

  	
   

  	
  100%

  



 


 


DEBT SECURITIES


 


	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  
	
  American
  Steel and Aluminum Coporation

  	
   

  	
  US$

  	
  33,400,000.00

  	
   

  	
  December 5, 2006

  	
   

  	
  On Demand

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nova Tube and Steel Inc.

  	
   

  	
  US$

  	
  11,600,000.00

  	
   

  	
  December 5, 2006

  	
   

  	
  On Demand

  



 

















 


Schedule II to the


Intercompany Note


Security Agreement


 


INTELLECTUAL PROPERTY



COPYRIGHTS OWNED BY GRANTOR


 


Canadian  Copyright Registrations


 


None


 


Pending Canadian  Copyright Applications for Registration


 


None


 


Non- Canadian  Copyright Registrations


 


None


 


Non- Canadian  Pending Copyright Applications for Registration


 


None


 

















 


Schedule II to the


Canadian Collateral


Agreement


 


LICENSES


 


I. Licenses/Sublicensees
Grantor as Licensor on Date Hereof


 


A.  Copyrights


 


Canadian  Copyrights


 


None


 


Non-  Canadian Copyrights


 


None


 


B.  Patents


 


Canadian Patents


 


None


 


Canadian Patent Applications


 


None


 


Non-Canadian Patents


 


None


 


Non-Canadian Patent Applications


 


None


 

















 


C.  Trademarks


 


Canadian Trademarks


 


None


 


Canadian Trademark Applications


 


None


 


Non-Canadian Trademarks


 


None


 


Non-Canadian Trademark Applications


 


None


 


D.  Others


 


None


 

















 


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


 


A.  Copyrights


 


Canadian Copyrights


 


None


 


Non-Canadian Copyrights


 


None


 


B.  Patents


 


Canadian Patents


 


None


 


Canadian Patent Applications


 


None


 


Non-Canadian Patents


 


None


 


Non-Canadian Patent Applications


 


None


 


C.  Trademarks


 


Canadian Trademarks


 


None


 


Canadian Trademark Applications


 


None


 


Non-Canadian Trademarks


 


None


 

















 


Non-Canadian Trademark Applications


 


None


 


D.  Others


 


None


 

















 


PATENTS OWNED BY NAME OF GRANTOR


 


Canadian Patent Registrations


 


	
  OWNER

  	
   

  	
  REGISTRATION

  NUMBER

  	
   

  	
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Novamerican
  Steel

  Inc. / Acier

  Novamerican
  Inc.(1)

  	
   

  	
  CA
  2298865

  	
   

  	
  Impact
  blow actuated pneumatic fastener driving tool

  



 


NOTE:


 






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


 


Canadian Patent Applications


 


	
  OWNER

  	
   

  	
  APPLICATION

  NUMBER

  	
   

  	
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Novamerican
  Steel

  Inc. / Acier

  Novamerican Inc.(1)

  	
   

  	
  CA
  2535104

  	
   

  	
  Cargo
  Restraint System

  
	
  Novamerican
  Steel

  Inc. / Acier

  Novamerican
  Inc.(1)

  	
   

  	
  CA
  2517798

  	
   

  	
  Nailer
  with ratchet-provided plunger mechanism

  



 


NOTE:


 






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


 


Non-Canadian
Patent Registrations


 


None


 


Non-Canadian
Patent Applications


 


None


 

















 


TRADEMARK/TRADE NAMES OWNED BY


 


Canadian Trademark Registrations


 


	
  OWNER

  	
   

  	
  REGISTRATION

  NUMBER

  	
   

  	
  TRADEMARK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Novamerican
  Steel

  Inc. / Acier

  Novamerican
  Inc.(1)

  	
   

  	
  TMA373,515
  (Canada)

  	
   

  	
  

  



 


NOTE:


 






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


 


Canadian Trademark Applications


 


None


 


State Trademark Registrations


 


None


 


Non-Canadian Trademark Registrations


 


	
  OWNER

  	
   

  	
  REGISTRATION

  NUMBER

  	
   

  	
  TRADEMARK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Novamerican
  Steel

  Inc. / Acier

  Novamerican Inc.

  	
   

  	
  2,314,474

  	
   

  	
  NOVAMERICAN

  



 


Non-Canadian Trademark Applications


 


	
  OWNER

  	
   

  	
  APPLICATION

  NUMBER

  	
   

  	
  TRADEMARK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nova
  Steel Ltd.

  	
   

  	
  Abandoned

  	
   

  	
  NOVAMERICAN

  



 

















 


Trade Names


 


None


 

















 


Exhibit I to the


Canadian Collateral


Agreement


 


FORM OF PERFECTION CERTIFICATE


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


Exhibit III to the


Canadian Collateral


Agreement


 


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


 


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


 


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


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State / Province /

  Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State / Province /

  Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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


 


	
  Grantor

  	
   

  	
  Jurisdiction

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


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


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State / Province /

  Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State/Province/

  Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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


 


	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State/Province/

  Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


(a)  all letters patent of Canada
or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of Canada or the
equivalent thereof in any other country, including registrations, recordings
and pending applications in the Canadian Intellectual Property Office or any
similar offices in any other country, including those listed on Schedule I (the
“Patents”), and all reissues, continuations, divisions, continuations-in-part,
renewals or extensions thereof, and the inventions disclosed or claimed
therein, including the right to make, use and/or sell the inventions disclosed
or claimed therein (collectively, the “Patent Collateral”;


 


(b)  all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all registration and recording applications filed in connection therewith,
including registrations and registration applications in the Canadian 


 





















 


Intellectual
Property Office or any similar offices in any other country or any political
subdivisions thereof, and all extensions or renewals thereof, including those
listed on Schedule II (the “Trademarks”);


 


(c)  all goodwill associated with
or symbolized by the Trademarks; and


 


(d)  all assets, rights and
interests that uniquely reflect or embody the Trademarks.


 


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


 


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


 


2

















 


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


 


	
   

  	
  NOVAMERICAN STEEL INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY TRUST COMPANY OF CANADA,

  
	
   

  	
  as Canadian Collateral Agent,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
					



 


3





















 


Schedule I


 


I. Patents


 


	
  Registered Owner

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II. Patent
Applications


 


	
  Registered Owner

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Date

  Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III. Patent Licenses


 


	
  Licensee

  	
   

  	
  Licensor

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


Schedule II


 


I. Trademarks


 


	
  Registered Owner

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II. Trademark
Applications


 


	
  Registered Owner

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Date

  Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III. Trademark Licenses


 


	
  Licensee

  	
   

  	
  Licensor

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


FORM OF

COPYRIGHT SECURITY AGREEMENT


 


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


 


WITNESSETH:


 


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


 


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


 


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


 


Section 1.                                          Defined Terms


 


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


 


Section 2.                                          Grant of Security Interest in Copyrights


 


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


 


Section 3.                                          Security for Obligations


 


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


 


6

















 


Section 4.                                          Security Agreement


 


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


 


[SIGNATURE PAGE FOLLOWS]


 


7

















 


Schedule II to the


Canadian Collateral


Agreement


 


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


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOVAMERICAN STEEL INC.

  
	
   

  	
  as Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


ACCEPTED AND AGREED

as of the date first above written:


 


BNY TRUST COMPANY OF CANADA

as Canadian Collateral Agent


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


2

















 


Schedule I

to

Copyright Security Agreement


 


 


REGISTERED
COPYRIGHTS


 


[Include
Registration Number and Date]


 


1.                                       COPYRIGHT
APPLICATIONS


 


3