Document:

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                                                                    EXHIBIT 10.4

                           GENERAL SECURITY AGREEMENT

1.    SECURITY INTEREST

(a)   As security for the payment of all obligations, indebtedness and
liabilities of STEELBANK TUBULAR INC. (hereinafter referred to as the "Debtor")
to THE EQUITABLE TRUST COMPANY (the "Creditor") whether incurred prior to, at
the time of or subsequent to the execution hereof relating to all obligations,
indebtedness and liabilities of the Debtor to the Creditor under an electronic
Charge/Mortgage of Land registered on the       day of May, 2005 as Instrument
No.       , securing the principal sum of $3,500,000.00, and any amendment
thereto and extensions thereof (the "Charge") given by the Debtor to the
Creditor on those lands and premises described on Schedule "A" hereon (the
"Lands"), the Debtor hereby grants to the Creditor by way of mortgage, charge,
assignment and transfer, a security interest (the "Security Interest") in all
goods (including all parts, accessories, attachments, special tools, additions
and accession thereto) located on the Lands, which are now owned or hereafter
owned or acquired by or on behalf of the Debtor (including such as may be
returned to or repossessed by Debtor) and in all proceeds and renewals thereof,
accretions thereto and substitutions therefor (hereinafter collectively called
"Collateral"), including, without limitation, all of the following now owned or
hereafter owned or acquired by or on behalf of Debtor:

      (i)   all inventory of whatever kind ("Inventory") located on the Lands;

      (ii)  all equipment (other than Inventory) of whatever kind located on the
            Lands including, without limitation, all machinery, tools,
            apparatus, plant, furniture, appliances, fixtures and vehicles of
            whatsoever nature or kind belonging to and owned by the Debtor;

      (iii) all book accounts and book debts and generally all accounts, debts,
            dues, claims, choses in action and demands of every nature and kind
            howsoever arising or secured which are now due, owing or accruing
            due to or owned by or which may hereafter become due, owing or
            accruing due or owned by the Debtor in connection with the Lands or
            the business operated by the Debtor thereon including, without
            limitation, letters of credit and advises of credit, which are now
            due, owing or accruing due to or owned by or which may hereafter
            become due, owing or accruing due to or owned by the Debtor
            ("Debts");

      (iv)  all deeds, documents, writings, papers, books of account and other
            books relating to or connected with the Lands or the business
            operated by the Debtor thereon and which relate to or are records of
            Debts, Chattel Paper or Documents of Title or by which such are or
            may hereafter be secured, evidenced, acknowledged or made payable;

      (v)   all contractual rights and insurance claims and all goodwill,
            patents, trademarks, copyrights, and other industrial property
            relating to or connected with the Lands or the business operated by
            the Debtor thereon;

      (vi)  all monies, other than trust monies lawfully belonging to others,
            which now are or which may at any time hereafter be due and owing to
            or owned by the Debtor in connection with the Lands or the business
            operated by the Debtor thereon;

      (vii) all property described in Schedule "B" annexed hereto.

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

(c)   The terms "Goods", "Chattel Paper", "Documents of Title", "Instruments",
"Intangibles", "Securities", "proceeds", Inventory", and "accessions", whenever
used herein shall be interpreted pursuant to their respective meanings when used
in the Personal Property Security Act of Ontario, R.S.O., 1990, as amended from
time to time, which Act, including amendments thereto and any Act substituted
therefor and amendments thereto is herein referred to as the "Act". Provided
always that the terms "Goods" when used herein shall not include "consumer
goods" of Debtor as that term is defined in the Act, and any reference herein to
"Collateral" shall, unless the context otherwise requires, be deemed a reference
to "Collateral or any part thereof".

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2.    INDEBTEDNESS SECURED

The Security Interest granted hereby secures payment and satisfaction of any and
all obligations, indebtedness and liabilities of Debtor to the Creditor
(including interest thereof) present or future, direct or indirect, absolute or
contingent, matured or not, extended or renewed, wheresoever and howsoever
incurred and any ultimate unpaid balance thereof and whether the same is from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again and whether Debtor be bound alone or with another or
others and whether as principal or surety relating to all obligations of the
Debtor to the Creditor under the Charge (hereinafter collectively called the
"Indebtedness").

It is understood and agreed between the Debtor and Creditor herein that the
covenant of the Debtor shall extend only to its respective interest in the
property municipally known as 2495 Haines Road, Mississauga, Ontario and
business conducted thereon comprising the security being given to the Creditor
and, in the event of default, there shall be no recourse by the Creditor to any
other assets or interests of the Debtor or any other person who may have an
interest in the land except for any tenant or occupant.

3.    OWNERSHIP OF COLLATERAL

Save and except as disclosed to the Creditor in respect of Personal Property
Security Act (Ontario) file reference nos. 612684351, 612694485 and 605468601
(collectively the "Prior Security Filings"), the Debtor represents and warrants
that, except for the Security Interest created hereby, the Debtor is, or with
respect to Collateral acquired after the date hereof will be, the owner of the
Collateral free from any mortgage, lien, charge, security interest or
encumbrance.

4.    INSURANCE

The Debtor shall keep the Collateral insured against loss or damage by fire and
such other risks as the Creditor may reasonably require to the full insurance
value thereof, and shall either assign the insurance policies to the Creditor or
have the loss thereunder made payable to the Creditor as the Creditor may
require. At the request of the Creditor such policies shall be delivered to and
held by it. Should the Debtor neglect to maintain such insurance the Creditor
may insure and any premiums paid by the Creditor together with interest thereon
shall be payable by the Debtor to the Creditor upon demand.

5.    LIENS, ETC.

Save and except as disclosed to the Lender in respect of the Prior Security
Filings, the Debtor shall keep the Collateral free and clear of all taxes,
assessments, claims, liens and encumbrances and shall promptly notify the
Creditor of any loss or damage to the Collateral or any part thereof.

6.    USE OF COLLATERAL

Until the Security Interest shall have become enforceable, the Debtor may
dispose of or deal with the Collateral in the ordinary course of its business,
for the purpose of carrying on the same and in any lawful manner not
inconsistent with the provisions hereof or any other agreements of the Debtor to
the Creditor or with the terms of any policies of insurance relating thereto.

7.    INFORMATION AND INSPECTION

The Debtor shall from time to time forthwith on request furnish to the Creditor
in writing all information requested relating to the Collateral or any part
thereof, and the Creditor shall, upon giving two (2) business days notice, be
entitled from time to time to inspect the tangible Collateral wherever located
including, without limitation, any books and records of the Debtor relating to
the Collateral, and for such purpose the Creditor shall have access to all
places where the Collateral or any part thereof is located and to all premises
occupied by the Debtor. The Debtor shall also deliver to the Creditor, as and
when requested, such financial statements and other financial information
relating to the Debtor and its business as required by the Creditor from time to
time.

8.    DEFAULT

8.1   In the event the Debtor shall default in the payment of all or any part of
the Indebtedness or liability of the Debtor to the Creditor, or in the
performance or observance of any other obligation or liability of the Debtor to
the Creditor, then the Security Interest shall become enforceable and so

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long as it shall remain enforceable, the Creditor may proceed to realize the
security constituted by this Security Agreement by sale or to enforce its rights
by entry, or by proceedings in any court of competent jurisdiction for the
appointment of a receiver or receiver and manager or for sale of the Collateral
or any part thereof or by any other action, suit, remedy or proceeding
authorized or permitted hereby or by law or by equity; and may file such proofs
of claims and other documents as may be necessary or advisable in order to have
its claim lodged in any bankruptcy or other judicial proceedings relative to the
Debtor. Any such sale may be made by public auction, by public tender or by
private contract, with or without advertising and without any other formality,
all of which are hereby waived by the Debtor, and such sale shall be on such
terms and conditions as to credit or otherwise and as to upset or reserve bid or
price as the Creditor, in its sole discretion, may deem advantageous and such
sale may take place whether or not the Creditor has taken possession of such
property and assets; provided however, that unless the Collateral is perishable
or unless the Creditor believes on reasonable grounds that the Collateral will
decline speedily in value the Debtor shall be entitled to not less than fifteen
(15) days' notice of sale containing such information and statements as are
prescribed by the Act.

8.2   In addition to the rights of the Creditor set forth in Paragraph 8.1,
whenever the Security Interest shall have become enforceable and so long as it
shall remain enforceable, the Creditor may, by instrument in writing, appoint
any person to be a receiver (which term shall include a receiver and manager) of
the Collateral including any rents and profits thereof and may remove any
receiver and appoint another in his stead. Any such receiver or receivers so
appointed shall be vested with all the powers and rights of the Creditor and
shall have power to take possession of the Collateral or any part thereof and to
carry on or concur in carrying on the business of the Debtor, and to borrow
money required for the maintenance, preservation or protection of the Collateral
or any part thereof or for the carrying on of such business, and to further
charge the Collateral in priority to the security constituted by this Security
Agreement as security for money so borrowed, and to exercise all rights
attaching or incidental to any securities owned by the Debtor and to sell, lease
or otherwise dispose of the whole or any part of the Collateral on such terms
and conditions and in such manner as he shall determine. Any such receiver shall
for all purposes be deemed to be the agent of the Debtor and not the agent of
the Creditor, and therefore, the Creditor shall not be responsible for the acts
or omissions of the receiver. The Creditor may from time to time fix the
remuneration of such receiver and direct the payment thereof out of the
Collateral. The receiver shall apply all monies from time to time received by
him in such of the following modes and in such order or priority as the Creditor
may from time to time at its option direct, namely: in discharge of all rents,
taxes, rates, insurance premiums and outgoings affecting the Collateral; in
payment of the remuneration of the receiver; in keeping in good standing all
liens and charges on the Collateral prior to the Security Interest; in payment
of the costs of carrying out or executing any powers, duties or directions which
are vested in the receiver; in payment of the interest accruing due on the
Security Agreement and all other amounts owing hereunder; and in payment of the
principal due and payable upon the Security Agreement and residue of any monies
so received shall be paid to the Debtor. The Creditor, in appointing or
refraining from appointing such receiver, shall not incur any liability to the
receiver, the Debtor or otherwise.

8.3   In addition to the rights and remedies specifically provided herein, the
Creditor shall, upon default have the rights and remedies of a secured party
under the Act.

9.    RECEIVABLES

The Creditor may collect, realize, sell, or otherwise deal with the Debts or any
part thereof in such manner, upon such terms and conditions upon default. The
Creditor shall not be liable or accountable for any failure to collect, realize,
sell or obtain payment of the Debts or any part thereof and shall not be bound
to institute proceedings for the purpose of collecting, realizing or obtaining
payment of the same or for the purpose of preserving any rights of the Creditor,
the Debtor or any other person, firm or corporation in respect of the same. All
monies collected or received by the Creditor in respect of the Debts or other
Collateral may be applied on account of such parts of the Indebtedness of the
Debtor as the Creditor may, in its sole discretion, elect, or in the discretion
of the Creditor may be released to the Debtor, all without prejudice to the
liability of the Debtor or the Creditor's right to hold and realize the security
constituted by this Security Agreement.

10.   CHARGES AND EXPENSES

The Creditor may charge on its own behalf and pay to others reasonable sums for
expenses incurred and for services rendered (expressly including legal advice
and services) in connection with the preparation and registration of this
Security Agreement and in connection with the realization,

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disposition of, retention or collection of the Collateral or any part thereof,
and such sums shall be a first charge on the proceeds of such realization,
disposition or collection and shall be added to the Indebtedness secured by this
Security Agreement and shall also be secured hereby.

11.   DEALINGS BY THIRD PARTIES

No person dealing with the Creditor or its agent or a receiver shall be
concerned to enquire whether the Security Interest has become enforceable, or
whether the powers which the Creditor or its agent is purporting to exercise
have become exercisable, or whether any money remains due upon the security
constituted by this Security Agreement, or as to the necessity or expediency of
the stipulations and conditions to which any sale shall be made, or as to the
propriety or regularity of any sale, or of any other dealing by the Creditor
with the Collateral, or to see to the application of any money paid to the
Creditor.

12.   ADDITIONAL COVENANTS

The Debtor hereby covenants and agrees with the Creditor, so long as this
Security Agreement remains outstanding, that:

      (a)   it will do, observe and perform all matters and things necessary or
            expedient to be done, observed or performed by virtue of any law of
            Canada or any province or municipality thereof for the purpose of
            creating and maintaining the security hereby constituted;

      (b)   it will, at all times, maintain all licenses, permits and
            authorizations to enable it to conduct its business; will carry on
            and conduct its business in a proper, efficient and businesslike
            manner and in accordance with good business practice;

      (c)   it will upon the reasonable request of the Creditor, provide the
            Creditor with such information concerning the Collateral and the
            business of the Debtor as required by the Creditor;

      (d)   it will pay or cause to be paid all taxes, rates, government fees
            and dues, levies, assessed or imposed on it and its property or any
            part thereof as and when the same become due and payable, save and
            except when and so long as the validity of any such taxes, rates,
            fees, dues, levies, assessments or imposts is, in good faith,
            contested by it and will, if and when required in writing by the
            Creditor, furnish the Creditor for inspection, with receipts for any
            of such payments;

      (e)   it will not, without the prior written consent of the Creditor,
            which may be granted or withheld by the Creditor, in its discretion
            acting reasonably, sell, transfer, assign or otherwise dispose of
            any part of the Collateral other than in the ordinary course of its
            business, for the purpose of carrying on same in a lawful manner not
            inconsistent with the provisions of this agreement or any other
            agreement of the Debtor with the Creditor.

13.   FURTHER ASSURANCES

The Debtor shall from time to time forthwith on the Creditor's request do, make
and execute all such financing statements, further assignments, documents, acts,
matters and things as may be required by the Creditor of, or with respect to,
the Collateral or any part thereof or as may be required to give effect to these
presents, and the Debtor hereby constitutes and appoints a duly authorized
officer of the Creditor the true and lawful attorney of the Debtor irrevocable
with full power of substitution to do, make and execute all such statements,
assignments, documents, acts, matters or things with the right to use the name
of the Debtor whenever and wherever it may be deemed necessary or expedient.

14.   DEALINGS BY THE CREDITOR

The Creditor may grant extensions of time and other indulgences, take and give
up securities, accept compositions, grant releases and discharges and otherwise
deal with the Debtor, debtors of the Debtor, sureties and others and with the
Collateral and other securities as the Creditor may see fit without prejudice to
the liability to the Debtor or the Creditor's rights to hold and realize the
security constituted by this Security Agreement.

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15.   NO REMEDY EXCLUSIVE

No remedy herein conferred upon or reserved to the Creditor for the realization
of the Security Interest, enforcement of rights of the Creditor or otherwise is
intended to be exclusive of any other remedy or remedies hereunder or under any
security collateral hereto, and each and every such remedy shall be cumulative,
and shall be in addition to every other remedy given hereunder or under any
other document or agreement in respect of the obligations to the Creditor owned
by the Debtor. Every power and remedy given by this Security Agreement to the
Creditor may be exercised from time to time as often as may be deemed expedient
by the Creditor. The taking of any action or proceedings or refraining from so
doing, or any other dealings with any other security for the monies secured
hereby, shall not release or affect the security constituted by this Security
Agreement.

16.   DISCHARGE AND SATISFACTION

Upon satisfaction by the Debtor of all obligations of the Debtor owed to the
Creditor, the Creditor shall, upon the request and at the expense of the Debtor,
execute and deliver to the Debtor such releases and discharges as the Debtor may
reasonably require.

17.   WAIVER OF COVENANTS

The Creditor may waive any breach by the Debtor of any of the provisions
contained in this Security Agreement or any failure by the Debtor in the
observance or performance of any covenant or condition required to be observed
or performed by the Debtor hereunder; provided that no such waiver by the
Creditor shall extend to or be taken in any manner to affect any subsequent
breach or failure or the rights resulting therefrom.

18.   APPLICATION OF INSURANCE PROCEEDS

Any insurance monies received by the Creditor pursuant to this Security
Agreement may at the option of the Creditor be applied to restoring, replacing
or repairing the Collateral or any part thereof, or be paid to the Debtor, or
any such monies may be applied in the sole discretion of the Creditor, in whole
or in part, to the repayment of the obligations hereby secured or any part
thereof whether then due or not, with any partial payments to be credited
against principal amounts of Indebtedness payable by the Debtor in inverse order
of maturity.

19.   ATTACHMENT

Each of the Debtor and the Creditor acknowledges that it is its intention that
the security interests herein created attach on the execution hereof by the
Debtor (save as to after-acquired property forming part of the Collateral in
respect of which attachment will result forthwith upon the Debtor acquiring
rights thereto) and that value has been given.

20.   NOTICES

Any notice required by or given under or in connection with this agreement may
be effectively given if it is in written form and given in the same manner and
extent as provided for in the Charge.

21.   GENERAL

This agreement;

(a)   shall be a continuing agreement in every respect;

(b)   shall be governed by the laws of the Province of Ontario; and

(c)   may be terminated by the Debtor by written notice delivered to the
      Creditor at the above-mentioned address at any time when the Debtor is
      not indebted or liable to the Creditor. For greater certainty, it is
      declared that any and all future loans, advances or other value which the
      Creditor may in its discretion make or extend to or for the account of the
      Debtor shall be secured by this agreement. Nothing contained in this
      agreement shall in any way obligate the Creditor to grant, continue,
      renew, extend time for payment of, or accept anything which constitutes or
      would constitute Indebtedness.

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22.   BINDING EFFECT

This Security Agreement is binding upon the Debtor and its successors and
permitted assigns.

23.   RECEIPT

The Debtor acknowledges receipt of a duplicate original hereof.

            IN WITNESS WHEREOF Debtor has executed this agreement this day of
      May, 2005.

                                               STEELBANK TUBULAR INC.

                                               PER: /s/ J. PETER FARQUHAR
                                                    ---------------------------
                                               NAME: J. PETER FARQUHAR
                                               TITLE: Chairman & CEO
                                               I have authority to bind the
                                               Corporation.

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                                  SCHEDULE "A"

LEGAL DESCRIPTION:

Part of Lots 33, 34 and 35, Plan G-14 and
Part of Lot 9, Concession 1, South of Dundas Street,
designated as Part 1 on Reference Plan 43R-967,
City of Mississauga, Regional Municipality of Peel,
Land Registry Division of the Land Registry Office of Peel (No. 43),
having assigned PIN 13340-0023 (LT),
municipally known as 2495 Haines Road, Mississauga, Ontario.

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                                   SCHEDULE "B"

All the goods, chattels, equipment and fixtures now located on the Lands and
belonging to and owned by the Debtor and any replacements thereof.<PAGE>

                                                                    EXHIBIT 10.5

                       GUARANTEE AND POSTPONEMENT OF CLAIM

To: THE EQUITABLE TRUST COMPANY
    (the "Chargee")

WHEREAS STEELBANK TUBULAR INC. (the "Chargor") is or will be the registered
owner of those lands and premises legally described as Part of Lots 33, 34 and
35, Plan G-14 and Part of Lot 9, Concession 1, South of Dundas Street,
designated as Part 1 on Reference Plan 43R-967, City of Mississauga, Regional
Municipality of Peel, Land Registry Division of the Land Registry Office of Peel
(No. 43), having assigned PIN 13340-0023 (LT), municipally known as 2495 Haines
Road, Mississauga, Ontario (the "Property").

AND WHEREAS the Chargor and TARPON INDUSTRIES INC. entered into a Commitment
Letter dated May 12th, 2005 (the "Commitment") issued by First National
Financial Corporation ("First National") on behalf of the Chargee, wherein First
National agreed to arrange a loan for the Chargor in the principal sum of THREE
MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000.00) on the terms and
conditions set out in the Commitment (the "Loan").

AND WHEREAS as security for the Loan, the Chargor has agreed to grant and
deliver to the Chargee, amongst other things, a first Charge of Land on the
Property securing the Loan together with interest and all costs provided for in
the Commitment (the "Charge").

AND WHEREAS the Chargee, in consideration for and as a condition of proceeding
with the Loan pursuant to the terms of the Commitment required TARPON INDUSTRIES
INC. (the "Covenantor") to provide its guarantee in respect of the repayment of
all monies secured by the Charge.

AND WHEREAS this Guarantee and Postponement of Claim is being provided by the
Covenantor in accordance with the terms of the Commitment.

NOW THEREFORE WITNESSETH in consideration of the sum of Two Dollars ($2.00) now
paid by the Chargee to the undersigned (the receipt and sufficiency of which is
hereby acknowledged) and the Chargee advancing the principal money secured or
any part thereof by the Charge to the Chargor on the terms and conditions set
out in the Commitment and pursuant to the Charge, the said Covenantor, TARPON
INDUSTRIES INC., hereby irrevocably absolutely and unconditionally, as principal
debtor and not as surety, covenants and guarantees to the Chargee the due and
punctual payment by the Chargor of all debts and liabilities, present or future,
direct or indirect, absolute or contingent, matured or not, at any time owing by
the Chargor to the Chargee, arising out of the Loan, the Charge or remaining
unpaid by the Chargor, whether arising from dealings between the Chargee and the
Chargor or from other dealings or proceedings which the Chargee may be or become
in any manner whatsoever a creditor of the Chargor in respect of any obligations
arising out of the Charge and wherever incurred, and whether incurred by the
Chargor alone or with another or others, including all principal monies,
interest, commissions, legal and any other costs or monies which may now or
hereafter become due and owing under the terms of the Charge, plus interest and
costs and the observance and performance by the Chargor of all of the covenants
and obligations contained therein and the said Covenantor for itself, its
administrators, successors and assigns covenants with the Chargee that if the
Chargor shall at any time make default in the punctual payment of any monies
payable under the Charge or fail to observe and perform any of the covenants and
obligations contained therein or in the Commitment, it will pay all such monies
to the Chargee or perform any of the covenants and obligations of the Chargor
forthwith after demand having been made in accordance with the notice provisions
contained herein and agrees to indemnify the Chargee against all losses,
damages, costs, charges and expenses the Chargee may at any time or from time to
time suffer, incur or become liable for in connection with resulting from or
occasioned by any breach by the Chargor of any provisions contained in the
Charge. The Covenantor's liabilities hereunder shall bear interest from the date
of such demand at the rate of interest set out in the Charge.

The undersigned further acknowledges and agrees with the Chargee as follows:

1.    The Chargee may grant time, renewals, extensions, indulgences, releases
      and discharges or take additional security from and give up the same in
      any or all of the security it is receiving from the Chargor, abstain from
      taking any enforcement proceedings it may be entitled to and otherwise
      deal with the Chargor and others as the Chargee may see fit, including
      entering into any renewal agreements, extension agreements, amending
      agreements or dealing with the Charge in any other manner, and may apply
      all monies at any time received

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      from the Chargor or others upon such part of the obligation of the
      Chargor as the Chargee deems best and change any such application in whole
      or in part, without in any way limiting or lessening the liability of the
      Covenantor to the Chargee.

2.    The Chargee shall not be bound to exhaust its recourse against the
      Property, the Chargor or other covenantors/guarantors or to value the
      security under the Charge or any other collateral security before
      requiring or being entitled to payment from the Covenantor. Provided it is
      understood and agreed any funds payable pursuant to this covenant to the
      Chargee shall be applied by the Chargee upon receipt of such funds to
      amounts due and payable under the Charge.

3.    No change or extension of time or other indulgence or release of the
      Chargor or anyone claiming through the Chargor, either before or after
      demand or claim against the Covenantor or any arrangement or other dealing
      by the Chargee with the Chargor or any other person, either before or
      after demand or claim against the Covenantor, or the bankruptcy or
      insolvency of the Chargor, or the release, exchange, acceptance or failure
      to perfect by the Chargee of any security, either before or after demand
      or claim against the Covenantor, shall in any way release, waive, vary,
      affect or prejudice the rights of the Chargor against the Covenantor,
      notwithstanding the Chargee may not give notice thereof to the Covenantor
      and the Covenantor hereby waives, to the maximum extent permitted by law,
      any requirement of notice, demand or prior action against the Chargor or
      any other security and hereby renounces all benefits of discussions and
      division.

4.    All indebtedness and liability, present and future, of the Chargor to the
      Covenantor as well as any indebtedness or liability for amounts advanced
      by the Covenantor on behalf of any other covenantor or guarantor of the
      Charge are hereby assigned to the Chargee and postponed to the obligations
      contained in the Charge, and all monies received by the Covenantor in
      respect thereof shall be received in trust for the Chargee and shall be
      paid over to the Chargee upon demand without in any way limiting or
      lessening the obligations imposed on the Covenantor and this assignment
      and postponement shall remain in full effect until repayment in full to
      the Chargee of all amounts secured by the Charge. The Covenantor
      acknowledges the assignment to the Chargee shall not impose upon the
      Chargee any obligation to do anything to realize on the assigned debts and
      claims or to ensure those debts or claims do not become statute barred by
      the operation of law relating to limitation of actions or otherwise.

5.    The Covenantor shall have no right to be subrogated to the rights of the
      Chargee until all liabilities and obligations of the Chargor and the
      Covenantor to the Chargee have been satisfied in full in respect of the
      Charge.

6.    The covenants of the Covenantor shall continue for the full term of the
      Charge and any renewal thereof unless a release in writing has been
      authorized by the Chargee and shall be binding upon the administrators,
      successors and assigns of the Covenantor.

7.    The Covenantor acknowledges if for any reason the Chargor has no legal
      existence and is or becomes under no legal obligation to discharge the
      monies secured by the Charge or if any monies owing by the Chargor to the
      Chargee become irrecoverable from the Chargor by operation of law or for
      any reason whatsoever, this covenant and the covenants, agreements and
      obligations of the Covenantor contained herein shall nevertheless be
      binding upon the Covenantor as principal debtor until such time as all
      monies owing by the Chargor to the Chargee under the Charge have been paid
      in full and the liabilities secured thereby have been discharged.

8.    This covenant shall be in addition to and not in substitution for any
      other guarantees or other securities which the Chargee may now or
      hereafter hold in respect of the monies secured by the Charge and the
      Chargee shall be under no obligation to marshal in favour of the
      Covenantor any other covenants or other securities or any monies or other
      assets which the Chargee may be entitled to receive or may have a claim
      upon; and no loss of or in respect of or unenforceability of any other
      covenants or other securities the Chargee may now or hereafter hold in
      respect of the monies secured by the Charge.

9.    The Covenantor agrees the Chargee shall not be obliged to make any demand
      upon, or take any proceedings, or action against the Chargor or any other
      person before pursuing its rights against the Covenantor herein, pursuant
      hereto. In the event the Chargee in its absolute

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      discretion makes demand upon the Covenantor, the Covenantor shall be held
      and be bound to the Chargee directly, jointly and severally, as principal
      debtors in respect of the payment of the amounts hereby guaranteed. Demand
      for payment shall be deemed to have been effectively made upon the
      Covenantor if and when an envelope containing such demand addressed to the
      Covenantor at the addresses of the Covenantor last known to the Chargee is
      posted, postage prepaid, in the post office.

10.   Without prejudice to or in any way limiting or lessening the Covenantor's
      liability and without obtaining the consent of or giving notice to the
      Covenantor, the Chargee may discontinue, reduce, increase, decrease or
      otherwise vary the credit of the Chargor in respect of the Loan, the
      Charge, may increase, decrease, or otherwise vary, the interest rate on
      any renewals or extensions and/or may change the amortization period to
      such terms as the Chargor and the Chargee shall agree, may grant time,
      renewals, extension, indulgences, releases and discharges to and accept
      compositions from or otherwise deal with the Chargor and others, including
      the Covenantor and any other covenantor as the Chargee may see fit and the
      Chargee may take, abstain from taking or perfecting, vary, exchange,
      renew, discharge, give up, realize on or otherwise deal with securities
      and guarantees in such manner as the Chargee may see fit, and the Chargee
      may apply all monies received by it from the Chargor or others or from
      securities or guarantees upon such parts of the guaranteed liabilities,
      whether liabilities of the Chargor to the Chargee, as the Chargee may see
      fit and change any such application in whole or in part from time to time.

11.   In the event there is a default in payment of any sums owing by the
      Chargor to the Chargee in respect of the Loan at any time, the Chargee may
      treat all guaranteed liabilities as due and payable and may forthwith
      collect from the Covenantor the total amount hereby guaranteed and may
      apply the sum so collected upon the guaranteed liabilities.

12.   In the event the Covenantor becomes insolvent or commences an act of
      bankruptcy or makes an assignment in bankruptcy or bulk sale of the
      Covenantor's assets, or a bankruptcy petition shall be filed or presented
      against the Covenantor, and not be bona fide opposed by the Covenantor,
      such event shall constitute a default under the terms of the Charge, and
      the Loan shall become immediately due and payable at the option of the
      Chargee.

13.   Until payment in full of all the liabilities guaranteed hereunder, all
      dividends, compositions, proceeds of securities, securities valued or
      payments received by the Chargee from the Chargor or others, or from
      estates in respect of the guaranteed liability shall be regarded for all
      purposes as payments in gross without any right on the part of the
      Covenantor to claim the benefit thereof in reduction of the liability
      under this Guarantee and Postponement of Claim, and the Covenantor shall
      not claim any setoff or counterclaim against the Chargor in respect of any
      liability of the Chargor to the Covenantor, claim or prove in the
      bankruptcy or insolvency of the Chargor in competition with the Chargee or
      have any right to be subrogated to the Chargee.

14.   This guarantee shall not be discharged or otherwise affected by the death
      or loss of capacity of the Chargor, by any change in the name of the
      Chargor, or in the membership of the Chargor, if a partnership, or in the
      objects, capital structure or constitution of the Chargor, if a
      corporation, or by the sale of the Chargor's business or any part thereof,
      or by the Chargor being amalgamated with a corporation, but shall,
      notwithstanding any such event, continue to apply to all guaranteed
      liabilities, whether theretofore or thereafter incurred; and in the case
      of a change in the membership of a Chargor which is a partnership or in
      the case of the Chargor being amalgamated with a corporation, this
      guarantee shall apply to the liabilities of the resulting partnership or
      corporation, and the term "Chargor" shall include each such resulting
      partnership and corporation.

15.   This guarantee shall not be discharged or affected by the death of the
      Covenantor or any of them, if more than one, and shall enure to the
      benefit of and be binding upon the Chargee, its successors and assigns,
      and the Covenantor, its administrators, successors and assigns.

16.   This guarantee shall not be discharged or otherwise affected by any change
      in the name of the Covenantor, or in the members of the Covenantor, if a
      partnership, or in the objects, capital structure or constitution of the
      Covenantor, if a corporation, or by the sale of the Covenantor's business
      or any part thereof, or by the Covenantor being amalgamated with a
      corporation, but shall notwithstanding any such event, continue to apply
      to all guaranteed liabilities, and in the case of a change in the
      membership of the Covenantor which is a

<PAGE>

                                        4

      partnership, or in the case of the Covenantor being amalgamated with a
      corporation, this guarantee and the term "Covenantor" herein shall be
      deemed to include each such resulting partnership and corporation.

17.   The covenants herein may be assigned by the Chargee and shall remain in
      full force and effect notwithstanding any change in the ownership or
      control of the Charge. In the event of the foregoing the Chargee agrees to
      use its best efforts to ensure notice of the transfer or assignment of the
      Charge and this covenant is provided, but failure to provide such notice
      shall not in any way invalidate or terminate the Covenantor's obligations
      herein.

18.   The Covenantor hereby further covenants and agrees in addition to any
      liability imposed upon the Covenantor in respect of all amounts due and
      payable under the Charge in respect of the Loan, including any interest
      due thereunder, any costs related to the recovering of same by the
      Chargee, the Covenantor shall, in addition to the foregoing, be liable for
      and fully indemnify the Chargee, its officers, directors, shareholders and
      employees for any and all costs, expenses, damages or liabilities
      (including legal fees on a substantial indemnity basis and any
      environmental remediation costs) incurred by the Chargee, directly or
      indirectly, arising out of or attributable to the non-compliance of the
      Chargor or its tenants, employees or agents with the environmental
      obligations imposed under the Charge, which the Covenantor acknowledges
      having reviewed, together with all such costs, expenses, damages or
      liabilities which the Covenantor acknowledges shall be secured under the
      Charge and all such liabilities and indemnities shall survive the
      repayment of the Loan, foreclosure upon the Charge and/or any other
      extinguishment of the obligations of the Chargor and Covenantor under the
      Charge and any other exercise by the Chargee of any remedies available to
      it against the Chargor and Covenantor.

19.   Demand for payment by the Chargee shall be deemed to have been effectively
      made upon the Covenantor if and when an envelope containing such demand
      addressed to the Covenantor at the address of the Covenantor last known to
      the Chargee is posted, postage prepaid, in the post office. All payments
      hereunder shall be made to the Chargee c/o First National Financial
      Corporation, 100 University Avenue, Suite 700-North Tower, Toronto,
      Ontario, M5J 1V6, Loan No. 507614.

20.   Prior to executing this Guarantee and Postponement of Claim, the
      Covenantor confirms and acknowledges being provided with true copies of
      all documentation provided by the Chargor to the Chargee in respect of the
      Loan, the Charge including, without limiting the generality of the
      foregoing, the Commitment, the Charge and Standard Charge Terms No.
      200033, and the Covenantor confirms it has had the meaning and import of
      the terms and provisions of these documents explained to it and has also
      had the opportunity to seek independent legal advice separate and apart
      from the Chargor. The Covenantor further confirms it is fully aware of the
      nature and effect of this Guarantee and Postponement of Claim and the
      obligations which arise hereunder in respect of the Charge and their
      liabilities and rights hereunder and has entered into this Guarantee and
      Postponement of Claim on its own volition and without fear, threats,
      compulsion, influence or pressure from the Chargor or any covenantor in
      respect of the Loan.

21.   This Guarantee and Postponement of Claim embodies all the agreements
      between the parties hereto relative to this guarantee, assignment and
      postponement, and none of the parties shall be bound by any
      representation, warranty or promise made by any person relative thereto
      which is not embodied herein.
<PAGE>
                                        5

22.   This Guarantee and Postponement of Claim shall extend to and ensure to the
      benefit of the Chargee and its successors and assigns, and every reference
      herein to the Covenantor is a reference to and shall be construed as
      including the undersigned and the administrators, executors, legal
      representatives, successors and assigns of the undersigned to and upon all
      of whom this Guarantee and Postponement of Claim shall extend and be
      binding.

23.   This Guarantee and Postponement of Claim shall be governed by the laws of
      the Province of Ontario.

      THE UNDERSIGNED HEREBY execute and deliver this Guarantee and Postponement
of Claim effective as of the 18th day of May, 2005.

                                       TARPON INDUSTRIES INC.

                                       Per: /s/ J. PETER FARQUHAR
                                           -------------------------------------
                                       NAME: J. PETER FARQUHAR
                                       TITLE: CHAIRMAN & CEO
                                       I HAVE AUTHORITY TO BIND THE CORPORATION.

                                       ADDRESS FOR SERVICE:

                                       _________________________________________
                                       _________________________________________
                                       _________________________________________
                                       _________________________________________

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