Document:

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                                                                    EXHIBIT 10.7

                           GENERAL SECURITY AGREEMENT

      This Agreement dated May 14, 2004 made by Steelbank Inc. (the
"CORPORATION") to and in favour of Barry Seigel, Jeffrey Greenberg and Mark
Madigan (each a "VENDOR", and collectively, the "VENDORS").

      RECITALS:

      (a)   The Vendors, BST Acquisition Ltd. ("BST") and Tarpon Industries,
            Inc. (the "PRINCIPAL") have entered into a share purchase agreement
            dated April 2, 2004 as amended by the amending agreement dated May
            5, 2004 (collectively, the "PURCHASE AGREEMENT") providing for the
            purchase by BST from the Vendors of all of the issued and
            outstanding shares in the capital of the Corporation (the "PURCHASED
            SHARES");

      (b)   As part of the consideration for such purchase, BST has (i) issued
            to the Vendors a promissory note dated the date hereof in the
            principal amount of $800,000.00 ("NOTE A"); (ii) issued to each of
            the Vendors respectively a further promissory note, each dated the
            date hereof and each in the principal amount of $135,000.00
            (collectively, the "NOTES B"); and (iii) agreed to pay to the
            Vendors an amount equal to $375,000.00 of the purchase price for the
            Purchased Shares in the form of common shares in the capital of the
            Principal pursuant to and in accordance with the provisions of
            Section 2.3(d) of the Purchase Agreement (the "COVENANT");

      (c)   In order to guarantee the obligations of BST in respect of (i) the
            Covenant, and (ii) the payment of the monies owing to the Vendors
            under Note A and Notes B, the Corporation has executed a guarantee
            of even date herewith (the "GUARANTEE") to and in favour of the
            Vendors;

      (d)   The Corporation has agreed to execute and deliver this Agreement to
            and in favour of the Vendors as security for the payment and
            performance of the Corporation's obligations to the Vendors under
            the Guarantee (collectively, the "GUARANTEED OBLIGATIONS"); and

      (e)   In addition to this Agreement, BST's obligations under Note A, the
            Notes B and the Covenant are secured by a share pledge of all of the
            Purchased Shares (signed by BST and the Corporation) in favour of
            the Vendors, by share pledge agreement dated the date hereof (the
            "SHARE PLEDGE").

For valuable consideration received, and as continuing security for the payment
and performance of the Guaranteed Obligations as and when due (sometimes
hereinafter collectively called the "OBLIGATIONS"), the Corporation hereby
covenants and agrees as follows:

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1.    The Corporation hereby grants, assigns, conveys, mortgages, transfers,
      charges and sets over as and by way of a fixed and specific mortgage and
      charge to and in favour of the Vendors, and grants to the Vendors a
      security interest in, all of the Corporation's right, title and interest
      in and to all personal property of every nature and kind whatsoever and
      wheresoever situate now or at any time and from time to time owned by the
      Corporation, including, without limiting the generality of the foregoing,
      the following:

      (a)   All inventory of whatsoever kind and wheresoever situate now owned
            or hereafter acquired by the Corporation including, without
            limitation, goods for sale ("INVENTORY");

      (b)   All book accounts and book debts and generally all accounts, debts,
            dues, claims, choses in action, rights under contracts and demands
            of every nature and kind howsoever arising or secured including, but
            not limited to letters of credit, and advices of credit, which are
            now due, owing or accruing or growing due to or owned by or which
            may hereafter become due, owing or accruing or growing due or owned
            by the Corporation including but not limited to claims against the
            Crown and claims under insurance policies ("RECEIVABLES");

      (c)   All machinery, equipment, tools, apparatus, plants, fixtures,
            furniture, vehicles, goods and other tangible personal property of
            whatsoever nature and kind, now owned or hereafter acquired by the
            Corporation other than Inventory ("EQUIPMENT");

      (d)   All chattel paper now owned or hereafter acquired by the Corporation
            ("CHATTEL PAPER");

      (e)   All warehouse receipts, bills of lading and other documents of
            title, whether negotiable or otherwise, now owned or hereafter
            acquired by the Corporation ("DOCUMENTS OF TITLE");

      (f)   All instruments now owned or hereafter acquired by the Corporation
            ("INSTRUMENTS");

      (g)   All deeds, documents, writings, papers, books of accounts and other
            books evidencing or relating to Receivables, Chattel Paper,
            Instruments or Documents of Title or by which such are or may
            hereafter be secured, evidenced, acknowledged or made payable; and
            all contracts, securities, instruments and other rights and benefits
            in respect thereof;

      (h)   All shares, stocks, warrants, bonds, debentures, debenture stock or
            the like now owned or hereafter acquired by the Corporation;

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      (i)   All intangible property now owned or hereafter acquired by the
            Corporation including, but not limited to, choses in action,
            goodwill, patents, trademarks, copyrights and other industrial
            property ("INTANGIBLES");

      (j)   All monies other than trust monies lawfully belonging to others; and

      (k)   Any property in any form (including but not limited to fixtures)
            derived directly or indirectly from any dealings with any property
            herein described (including but not limited to all products and cash
            and non-cash proceeds thereof); indemnification or compensation for
            any such property lost, destroyed, damaged or lawfully or unlawfully
            taken or injuriously affected; all increases, additions and
            accessions thereto and substitutions and replacements thereof.

2.    To the extent that the creation of the security interest would constitute
      a breach or permit the acceleration or termination of any existing
      agreement, right, licence or permit of the Corporation (each, a
      "RESTRICTED ASSET"), the security interest created hereby shall not attach
      to the Restricted Asset but the Corporation shall hold its interest in the
      Restricted Asset in trust for the Vendors.

3.    The Corporation acknowledges that the parties intend the security interest
      hereunder to attach upon the execution of this Agreement, that value has
      been given and that the Corporation has rights in the Collateral (other
      than after acquired Collateral).

4.    Provided that the last day of any term of years reserved by any lease,
      verbal or written, or any agreement therefor now held or hereafter
      acquired by the Corporation, is hereby and shall be excepted out of the
      security interest hereby or by any other instrument supplemental hereto
      created and does not and shall not form part of the Collateral but the
      Corporation shall stand possessed of the reversion remaining in the
      Corporation of any leasehold interest forming part of the Collateral upon
      trust to assign and dispose thereof as the Vendors may after default
      hereunder direct.

5.    So long as any of the Guaranteed Obligations remain outstanding, the
      Corporation shall not without the prior written consent of the Vendors:

      (a)   create or permit to arise or exist any Encumbrance over the
            Collateral ranking prior to the security interest created hereby
            other than (i) Permitted Encumbrances, (ii) purchase-money security
            interests (as such term is defined in the Personal Property Security
            Act (Ontario)) created from time to time, and (iii) any Encumbrance
            created in favour of the Corporation's and/or the Principal's
            primary lender; or

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      (b)   sell, exchange, lease, release or abandon or otherwise dispose of
            any of the Collateral except for (i) bona fide sales, exchanges,
            leases, abandonments or other dispositions in the ordinary course of
            business for the purpose of carrying on the Corporation's business
            and at fair market value, (ii) Collateral which has no material
            economic value in the Corporation's business or are obsolete.

6.    The Corporation covenants, represents and warrants to the Vendors that the
      Corporation shall:

      (a)   maintain adequate insurance upon the Collateral at all times with
            responsible insurance carriers and in such amounts and covering such
            risks as are usually carried by companies engaged in similar
            businesses and owning similar properties in the same general areas
            in which the Corporation operates, and deliver to the Vendors, from
            time to time upon written request of the Vendors, evidence of the
            maintenance of all insurance required to be maintained;

      (b)   take all reasonable steps to maintain approvals to carry on its
            business or to own or lease its property and assets, and comply in
            all material respects with all applicable laws, rules, regulations
            and orders;

      (c)   maintain all property and assets that are not obsolete or redundant
            in good condition and repair (normal wear and tear excepted) and pay
            and discharge or cause to be paid and discharged when due the cost
            of repairs to or maintenance of the same; and

      (d)   upon the request of the Vendors, duly execute and deliver, or cause
            to be duly executed and delivered, to the Vendors such further
            instruments and documents and cause to be done such further acts and
            things as may be necessary or proper in the reasonable opinion of
            the Vendors to carry out more effectively the provisions and
            purposes of this Agreement.

7.    Unless such event of default is waived by the Vendors in writing, all of
      the rights and remedies hereby conferred in respect of the Collateral
      shall become immediately enforceable upon the happening of any of the
      following events ("EVENTS OF DEFAULT"):

      (a)   a default occurs under the Guarantee;

      (b)   the Corporation (i) becomes insolvent or generally not able to pay
            its debts as they become due, (ii) admits in writing its inability
            to pay its debts generally or makes a general assignment for the
            benefit of creditors, (iii) institutes or has instituted against it
            any proceeding seeking (a) to adjudicate it a bankrupt or insolvent,
            (b) liquidation, winding-up,

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            reorganization, arrangement, adjustment, protection, relief or
            composition of it or its debts under any law relating to bankruptcy,
            insolvency, reorganization or relief of debtors including, but not
            limited to, any plan of compromise or arrangement or other corporate
            proceeding involving its creditors, or (c) the entry of an order for
            relief or the appointment of a receiver, receiver-manager,
            custodian, trustee or other similar official for it or for any
            substantial part of its properties and/or assets, and in the case of
            any such proceeding instituted against it (but not instituted by
            it), either the proceeding remains undismissed or unstayed for a
            period of 30 calendar days or more, or any of the actions sought in
            such proceeding (including, but not limited to, the entry of an
            order for relief against it or the appointment of a receiver,
            receiver-manager, trustee, custodian or other similar official for
            it or for any substantial part of its properties and assets) occurs,
            or (iv) takes any corporate action to authorize any of the above
            actions;

      (c)   the Corporation fails to perform, observe or comply with any of its
            obligations under this Agreement; or

      (d)   the Corporation fails to pay the principal of, or premium or
            interest on, any of its debt which is outstanding in an aggregate
            principal amount exceeding $50,000.00 when such amount becomes due
            and payable (whether by scheduled maturity, required prepayment,
            acceleration, demand or otherwise) and such failure continues after
            the applicable grace period, if any, specified in the agreement or
            instrument relating to the debt; or any other event occurs or
            condition exists and continues after the applicable grace period, if
            any, specified in any agreement or instrument relating to any such
            debt, if its effect is to accelerate, or permit the acceleration of
            the debt; or any such debt shall be declared to be due and payable
            prior to its stated maturity.

8.    (a)   Upon the happening of any of the events of default, the Vendors may
      by instrument in writing declare that the security hereof has become
      enforceable and the Vendors shall have the following rights and powers:

            (i)   to enter into possession of all or any part of the Collateral
                  by any method permitted by law;

            (ii)  by instrument in writing to appoint any person (whether an
                  officer or employee of the Vendors or not), firm or
                  corporation to be a receiver or receivers (hereinafter called
                  the "RECEIVER") of the Collateral and to remove any Receiver
                  so appointed and appoint another or others in his stead.

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      The security of this Agreement may be realized and the rights enforced by
      any remedy or in any manner authorized or permitted by this Agreement and
      by law and no remedy for the realization of the security hereof shall be
      exclusive of or dependent upon any other remedy and all or any remedies
      may from time to time be exercised independently or in any combination.

      (b)   Without limiting the generality of the foregoing it shall be lawful
            for the Vendors:

            (i)   to make any sale, lease or other disposition of the Collateral
                  either for cash or upon credit or partly for one and partly
                  for the other upon such conditions as to terms of payment as
                  the Vendors in their absolute discretion may deem proper;

            (ii)  to rescind or vary any contract for sale, lease or other
                  disposition that the Vendors may have entered into pursuant
                  hereto and resell, release or redispose of the Collateral with
                  or under any of the powers conferred herein; and

            (iii) to stop, suspend or adjourn any sale, lease or other
                  disposition from time to time and to hold the same as
                  adjourned without further notice.

            Except as otherwise provided by law or this Agreement, upon any such
            sale, lease or other disposition the Vendors shall be accountable
            only for money actually received by it. The Vendors may deliver to
            the purchaser or purchasers of the Collateral or any part thereof
            good and sufficient conveyances or deeds for the same free and clear
            of any claim by the Corporation. The purchaser or lessee receiving
            any disposition of the Collateral or any part thereof need not
            inquire whether default under this Agreement has actually occurred
            but may as to this and all other matters rely upon a statutory
            declaration of a Vendor, which declaration shall be conclusive
            evidence as between the Corporation and any such purchaser or
            lessee, and need not look to the application of the purchase money,
            rent or other consideration given upon such sale, lease or other
            disposition, which shall not be affected by any irregularity of any
            nature or kind relating to the enforcing of the security hereof or
            the taking of possession of the Collateral or the sale, lease or
            other disposition thereof.

      (c)   Any Receiver appointed as aforesaid shall have the power without
            legal process:

            (i)   to take possession of the Collateral or any part thereof
                  wherever the same may be found;

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            (ii)  to carry on the business of the Corporation or any part
                  thereof in the name of the Corporation or of the Receiver;

            (iii) to exercise on behalf of the Vendors all of the rights and
                  remedies herein granted to the Vendors,

            and without in any way limiting the foregoing the Receiver shall
            have all the powers of a receiver appointed by a court of competent
            jurisdiction. Any Receiver shall, so far as concerns responsibility
            for his acts, be deemed the agent of the Corporation, and the
            Vendors shall not be in any way responsible for any misconduct or
            negligence on the part of any Receiver or any loss resulting
            therefrom.

      (d)   Upon the Vendors declaring as aforesaid that the security hereof has
            become enforceable or the Corporation receiving notice from the
            Vendors of the taking of possession of any of the Collateral or of
            the appointment of a Receiver, all the powers, functions, rights and
            privileges of the directors and officers of the Corporation with
            respect to the property, business and undertaking of the Corporation
            shall cease except to the extent specifically continued at any time
            by the Vendors in writing.

9.    The costs of any Receiver with respect to, and all expenditures made by
      the Vendors or any Receiver in the course of, doing anything hereby
      permitted to be done by the Vendors or such Receiver, and the costs of any
      sale proceedings hereunder, or in or about taking, recovering or keeping
      possession of any of the Collateral or in enforcing any of the remedies
      hereunder shall be payable forthwith by the Corporation, shall be secured
      hereby and shall have the benefit of the lien hereby created. Without
      limiting the generality of the foregoing, such costs shall extend to and
      include any reasonable legal costs incurred by or on behalf of the
      Vendors.

10.   (a)   In this Agreement unless there is something in the subject matter or
      context inconsistent therewith:

            (i)   "THIS AGREEMENT", "HERETO", "HEREIN", "HEREOF", "HEREBY",
                  "HEREUNDER", and similar expressions refer to the whole of
                  this Agreement and not to any particular article, section or
                  other portion thereof and extend to and include any and every
                  instrument supplemental or ancillary hereto or in implement
                  hereof;

            (ii)  "COLLATERAL" means all property and assets expressed herein to
                  be now, or which may hereafter become, subject to the fixed
                  and specific charge of this Agreement;

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            (iii) "ENCUMBRANCES" means security interests, mortgages, hypothecs,
                  pledges, liens, distress, charges or other claims or
                  encumbrances of every nature or kind whatsoever;

            (iv)  "PERMITTED ENCUMBRANCES" means, collectively, the following:

                  (1)   any and all Permitted Liens, as such term is defined in
                        the Purchase Agreement; and

                  (2)   Encumbrances approved in writing by the Vendors;

            (v)   words importing the singular number only include the plural
                  and vice versa and words importing the masculine gender
                  include the feminine gender and words importing persons
                  include firms and corporations and vice versa.

      (b)   The rights of the Vendors hereunder shall not be prejudiced nor
            shall the liabilities of the Corporation or of any other person be
            reduced in any way by the taking of any other security of any nature
            or kind whatsoever either at the time of execution of this Agreement
            or at any time hereafter.

      (c)   The Corporation for valuable consideration irrevocably appoints the
            Vendors to be the attorneys of the Corporation in the name of and on
            behalf of the Corporation, upon the occurrence and during the
            continuance of an event of default, to execute and do any deeds,
            transfers, conveyances, assignments, assurances and things which the
            Vendors may deem necessary or advisable to execute and do under the
            covenants and provisions herein contained.

      (d)   The Vendors may, after the security interest created hereby become
            enforceable, (i) notify any account debtor or any obligor on an
            Instrument to make payment to the Vendors whether or not the
            Corporation was theretofore making collections on such accounts,
            chattel paper or instruments, and (ii) assume control of an proceeds
            arising from the Collateral.

      (e)   No act or omission by the Vendors in any manner whatever in the
            premises shall extend to or be taken to affect any provision hereof
            or any subsequent breach or default or the rights resulting
            therefrom save only express waiver by the Vendors in writing to the
            Corporation.

      (f)   If the Corporation fails to do anything hereby required to be done
            by it, the Vendors may, but shall not be obliged to, do such thing
            and all sums thereby expended by the Vendors shall be payable
            forthwith by the Corporation, shall be secured hereby and shall have
            the benefit of the lien

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            hereby created, but no such performance by the Vendors shall be
            deemed to relieve the Corporation from any default hereunder.

      (g)   Except in the event of a disruption in postal service, any notice
            given hereunder to the Corporation shall be conclusively deemed to
            have been given and received by the Corporation three (3) business
            days next following the day upon which it is mailed in Ontario by
            prepaid registered post. Notice may also be given to the Corporation
            by fax transmission and shall be deemed received on the day of
            transmission if such transmission occurs before 5:00pm Toronto time
            on a business day, failing which such transmission shall be deemed
            received on the next following business day.

11.   The security interest created hereby shall be discharged upon, but only
      upon, full payment and performance of the Obligations without cost to the
      Vendors or the termination of the Guarantee in accordance with the terms
      thereof. Upon discharge of the security interest created hereby, and at
      the request of the Corporation, the Vendors shall execute and deliver to
      the Corporation, at the Corporation's cost, such releases and discharges
      of the security interest hereunder as the Corporation may reasonably
      require.

12.   Time shall be in all respects of the essence hereof.

13.   Terms which are defined in the Personal Property Security Act (Ontario) as
      amended shall have the same meaning where used herein, save and except
      where the context otherwise requires.

14.   This Agreement shall be governed by and construed in accordance with the
      laws of the Province of Ontario and the federal laws of Canada applicable
      therein and, for the purpose of legal proceedings, the courts of that
      Province shall have jurisdiction over all disputes which may arise under
      this Agreement and the Corporation hereby irrevocably and unconditionally
      submits to the non-exclusive jurisdiction of such courts, provided that
      nothing herein contained shall prevent the Vendors from proceeding at
      their election against the Corporation in the courts of any other
      jurisdiction.

15.   If any provision herein shall be duly held by a court of competent
      jurisdiction to invalid, illegal or unenforceable at law, then such
      provision shall be deemed severed from this Agreement and the remaining
      provisions shall remain in full force and effect and binding upon the
      Corporation.

16.   This Agreement and all its provisions shall enure to the benefit of the
      Vendors and their respective heirs, executors, administrators, successors
      and assigns, and shall be binding on the Corporation and its successors
      and assigns.

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      IN WITNESS WHEREOF the Corporation has duly executed this Agreement.

                                             STEELBANK INC.

                                             By: /s/ PETER FARQUHAR
                                                 ------------------------------
                                                 Name : PETER FARQUHAR
                                                 Title: DIRECTOR

                                             I have the authority to bind the
                                             Corporation<PAGE>

                                                                    EXHIBIT 10.8

                           SECURITIES PLEDGE AGREEMENT

      Securities Pledge Agreement dated May 14, 2004 made by BST Acquisition
Ltd. (the "PURCHASER") and Steelbank Inc. (the "CORPORATION") to and in favour
of Barry Seigel, Jeffrey Greenberg and Mark Madigan (collectively, the
"VENDORS").

      RECITALS:

      (a)   The Vendors, the Purchaser and Tarpon Industries, Inc. (the
            "PRINCIPAL") have entered into a share purchase agreement dated
            April 2, 2004 as amended by amending agreement dated May 5, 2004
            (the "PURCHASE AGREEMENT") providing for the purchase by the
            Purchaser from the Vendors of all of the issued and outstanding
            shares in the capital of the Corporation (the "SHARES");

      (b)   As part of the consideration for such purchase, the Purchaser (i)
            issued to the Vendors a promissory note dated the date hereof in the
            principal amount of $800,000.00 ("NOTE A") pursuant to Section
            2.3(b) of the Purchase Agreement, (ii) issued to each of the Vendors
            a promissory note in the principal amount of $135,000.00
            (collectively, the "NOTES B") pursuant to Section 2.3(c) of the
            Purchase Agreement, and (iii) agreed to pay to the Vendors an amount
            equal to $375,000.00 of the purchase price for the Shares in the
            form of common shares in the capital of the Principal pursuant to
            and in accordance with the provisions of Section 2.3(d) of the
            Purchase Agreement (the "COVENANT");

      (c)   The Corporation has delivered to the Vendors a general security
            agreement dated the date hereof in favour of the Vendors (the "GSA")
            and a guarantee dated the date hereof in favour of the Vendors (the
            "GUARANTEE"), pursuant to Section 2.3(b) of the Purchase Agreement;

      (d)   The Purchaser and the Corporation (individually, a "PARTY" and
            collectively, the " PARTIES") have executed and delivered this
            Agreement to and in favour of the Vendors as security for the
            payment and performance of the Obligations (hereinafter defined) and
            as an essential and necessary condition (for the exclusive benefit
            of the Vendors) to the completion of the transactions contemplated
            by the Purchase Agreement;

      (e)   All references herein to dollars or currency shall refer to lawful
            currency of Canada.

      In consideration of the foregoing and the payment of Ten Dollars ($10.00)
by each of the Vendors to each of the Parties, and other good and valuable
consideration (the receipt and adequacy of which are acknowledged), the Parties
covenant and agree as follows:

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                                     - 2 -

1.    GRANT OF SECURITY

(1)   The Purchaser hereby pledges, assigns and hypothecates (the "PLEDGE") to
      and in favour of the Vendors and grants to the Vendors a security interest
      (to which the Personal Property Security Act (Ontario) (the "PPSA")
      applies) in the securities described in Schedule "A" annexed hereto and
      constituting all of the issued and outstanding shares in the capital of
      the Corporation (and herewith delivers to and deposits with the Vendors
      all share certificates evidencing all such securities, duly endorsed in
      favour of the Vendors (one-third as to each Vendor)) (collectively,
      together with the dividends, moneys, rights and claims hereinafter
      referred to and the securities referred to in Section 1(2) hereof, the
      "SECURITIES"), and other moneys now or hereafter received or declared in
      respect of the Securities and all other rights and claims of the Purchaser
      in respect of the Securities.

(2)   The Securities shall also include (if applicable) any and all
      substitutions, additions or proceeds arising out of any consolidation,
      subdivision, reclassification, stock dividend or similar increase or
      decrease in, or alteration to, the share capital of the Corporation,
      including any shares issued to the Purchaser pursuant to Section 3(4)(d)
      hereof.

2.    OBLIGATIONS SECURED

(1)   The Pledge and security interests granted hereby (the "SECURITY INTEREST")
      secure (i) the performance by the Purchaser of its obligations, as and
      when due, under Note A and each of Notes B; (ii) the fulfillment of the
      Covenant; and the obligations of the Corporation under the Guarantee
      (collectively, and together with the expenses, costs and charges set out
      in Section 2(2) hereof, the "OBLIGATIONS").

(2)   All expenses, costs and charges incurred by or on behalf of the Vendors in
      connection with this Agreement, the Security Interest or the Securities,
      including but not limited to all legal fees (on a
      solicitor-and-his-own-client basis), court costs, receiver's or agent's
      remuneration and other expenses incurred in taking possession of,
      protecting, insuring, preparing for disposition, realizing, collecting,
      selling, transferring, delivering or obtaining payment for the Securities,
      and of taking, defending or participating in any action or proceeding in
      connection with any of the foregoing matters or otherwise in connection
      with the Vendors' interest in the Securities, or relating to the
      enforcement of this Agreement, shall be added to and form a part of the
      Obligations.

(3)   The Purchaser acknowledges that (i) adequate and sufficient value has been
      given, (ii) it has rights in the Securities, (iii) it has not agreed to
      postpone the time of attachment of the Security Interest, and (iv) it has
      received a duplicate original copy of this Agreement.

3.    RIGHTS AND OBLIGATIONS OF THE PURCHASER

(1)   Until the Security Interest has become enforceable, the Purchaser shall be
      entitled to exercise all rights associated with the ownership of the
      Securities, including without limitation the right to receive cash
      dividends, save and except as such rights may

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                                     - 3 -

      otherwise be restricted, limited or otherwise affected under or pursuant
      to this Agreement.

(2)   Whenever the Security Interest has become enforceable, all rights of the
      Purchaser to vote or to receive dividends shall cease and all such rights
      shall become vested solely and absolutely in the Vendors.

(3)   Any dividends received by the Purchaser contrary to this Section 3 or any
      other moneys or property which may be received by the Purchaser at any
      time for, or in respect of, the Securities shall be received as trustee
      for the Vendors and shall be immediately paid over to the Vendors.

(4)   At any time prior to December 31, 2004 except with the prior written
      consent of the Vendors, such consent to be at the sole and unfettered
      discretion of the Vendors, the Purchaser shall not permit the Corporation
      to and the Corporation shall not:

      (a)   alter the rights, privileges, restrictions or conditions attaching
            to the Securities in any regard whatsoever, (the "SHARE CONDITIONS")
            save and except as provided in Sections 3(4)(b) and (d) below;

      (b)   amend the articles of incorporation of the Corporation (the
            "Articles") provided that if any amendment of the Articles (i) does
            not alter the Share Conditions in any regard whatsoever; (ii) does
            not in any manner affect any of the Vendors' rights hereunder (or
            any of the Purchaser's or the Corporation's obligations, hereunder);
            and (iii) no Event of Default (as hereinafter defined) has occurred,
            then the Corporation may amend the Articles without requiring the
            consent of the Vendors;

      (c)   amalgamate with another corporation;

      (d)   issue any shares in the capital of the Corporation or issue any
            options, warrants or any other type of security relating to the
            equity in the Corporation (save and except only to the Purchaser, in
            which event no consent of the Vendors shall be required, provided
            that any such shares, options, warrants or other type of security
            issued or provided to the Purchaser automatically become pledged,
            charged and assigned to the Vendors as part of the Securities);

      (e)   reduce or make any distribution of its capital, or redeem, purchase
            or otherwise retire or pay for any shares of its present or future
            capital stock; and

      (f)   terminate the corporate existence of the Corporation, whether by
            winding-up, dissolution, surrender of charter or otherwise.

<PAGE>

                                     - 4 -

4.    ENFORCEMENT

Upon the occurrence of any of the following events (each an "EVENT OF DEFAULT")
and as of the time of any such occurrence, (i) the Obligations shall
automatically become due and payable in full and required to be fully performed
(as the case may be), (ii) the Security Interest shall become fully enforceable
against the Purchaser, and (iii) all of the rights and remedies hereby conferred
upon the Vendors (and otherwise conferred upon the Vendors as a secured party
pursuant to the PPSA) shall become fully enforceable:

      (a)   any of the Parties does any act in breach of, or defaults in the
            observance or performance of any of the provisions of this
            Agreement;

      (b)   a default occurs under any of the Obligations; or

      (c)   a default occurs under the GSA.

5.    REMEDIES

      Upon the occurrence of an Event of Default, the Vendors may, at any time,
in their sole and unfettered discretion (subject to compliance with applicable
law), (i) realize upon or otherwise dispose of or contract to dispose of the
Securities by sale, transfer or delivery, or (ii) exercise and enforce all
rights and remedies of a holder of the Securities as the absolute owner thereof,
all without demand of performance or other demand, advertisement or notice of
any kind to or upon the Purchaser. Any remedy may be exercised separately or in
combination and shall be in addition to, and not in substitution for, any other
rights the Vendors may have, however created. The Vendors shall not be bound to
exercise any right or remedy, and the exercise of rights and remedies shall be
without prejudice to the rights of the Vendors in respect of the Obligations
including but not limited to the right to claim for any deficiency.

6.    APPOINTMENT OF ATTORNEY

      The Purchaser hereby irrevocably appoints the Vendors or any of them as
attorney of the Purchaser (with full power of substitution) to do, make and
execute in the name of and on behalf of the Purchaser, if and when the Security
Interest has become enforceable hereunder, all such further acts, documents,
matters and things which the Vendors may deem necessary or advisable to
accomplish the purposes of this Agreement, and, if and when the Security
Interest has become enforceable hereunder, the Vendors or their nominees and
transferees are empowered to exercise all rights and powers and to perform all
acts of ownership with respect to the Securities to the same extent as the
Purchaser would otherwise be empowered but for this Agreement. All acts of any
such attorney are ratified and approved, and the attorney shall not be liable
for any act, failure to act or any other matter or thing in connection
therewith.

7.    STANDARDS OF SALE

      The Vendors shall have the right, at their option, to dispose of the
Securities in any manner whatsoever that they deem appropriate (subject to
compliance with applicable law),

<PAGE>

                                     - 5 -

and the Purchaser hereby expressly acknowledges (but without implication of any
limitation whatsoever) that:

      (a)   The Securities may be disposed of in whole or in part;

      (b)   The Securities may be disposed of by public auction, public tender
            or private contract;

      (c)   Any assignee of such Securities may be the Vendors or any of them;

      (d)   Any sale conducted by the Vendors shall be at such time and place in
            accordance with such procedures as the Vendors may deem
            advantageous;

      (e)   A disposition of Securities shall be on such terms and conditions
            (including but not limited to as to credit or otherwise) as the
            Vendors may deem advantageous; and

      (f)   The Vendors may establish an upset or reserve bid or price in
            respect of the Securities.

8.    DEALING WITH THE SECURITIES

      The Vendors shall not be obliged to pursue or exhaust its recourse against
any of Parties or against any other security or securities the Vendors may hold
before realizing upon or otherwise dealing with the Securities in such manner as
the Vendors consider advisable (subject to compliance with applicable law), and
the Vendors may (at their option) grant time, renewals, extensions, indulgences,
releases and discharges to, may take securities from and give the same and any
and all existing securities up to, may abstain from taking securities from, or
from perfecting securities of, may accept compositions from and may otherwise
deal with any or all of the Parties and all others and all other securities
(including but not limited to the Securities hereby pledged or any part
thereof), as the Vendors may see fit, all without prejudice to the right of the
Vendors to seize, hold, deal with and realize on the Securities hereby pledged
to the Vendors, in any manner whatsoever that the Vendors consider desirable
(subject to compliance with applicable law).

9.    DEALINGS BY THIRD PARTIES

(1)   No person dealing with the Vendors or an agent or receiver shall be
      required to determine (i) the necessity or expediency of the stipulations
      and conditions subject to which any sale shall be made, or (ii) how any
      money paid to the Vendors has been applied.

(2)   The Purchaser acknowledges, covenants and agrees that any assignee or
      transferee of the Securities from the Vendors (including but not limited
      to the Vendors themselves) shall hold the Securities absolutely, free from
      any claim or right of whatever kind, including but not limited to any
      equity of redemption, of the Purchaser, which right or equity the
      Purchaser specifically waives (to the fullest extent permitted by law) as
      against any such assignee or transferee together with all rights of
      redemption, stay or

<PAGE>

                                     - 6 -

      appraisal which the Purchaser has or may have under any rule of law or
      statute now existing or hereafter adopted.

10.   SUPPLEMENTAL SECURITY

      This Agreement is in addition and without prejudice to and supplemental to
any and all other security now held or which may hereafter be held by the
Vendors. The Vendors may realize upon or enforce all or part of any security
held by the Vendors in any order that the Vendors desire and any such
realization upon or enforcement by any means of any security (hereunder or
otherwise) shall not limit or affect the realization upon or enforcement of the
Security Interest or any other security.

11.   NO MERGER

      This Agreement shall not operate by way of merger of any of the
Obligations and no judgment recovered by the Vendors shall operate by way of
merger of, or in any way affect, the Security Interest, which is in addition to,
and not in substitution for, any other security held by the Vendors in respect
of the Obligations.

12.   TIME OF ESSENCE

      Time shall be strictly of the essence of this Agreement and of every part
thereof and no extension or variation of this Agreement shall operate as a
waiver of this provision.

13.   WAIVERS, ETC.

      No failure on the part of the Vendors to exercise, and no delay in
exercising, any right under any of this Agreement shall operate as a waiver of
such right; nor shall any single or partial exercise of any right under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right.

14.   FURTHER ASSURANCES

      The Parties shall from time to time, whether before or after the Security
Interest shall have become enforceable, do all such acts and things and execute
and deliver all such transfers, assignments and instruments as the Vendors may
reasonably require for (i) protecting the Securities, (ii) perfecting the
Security Interest, and (iii) exercising all powers, authorities and discretions
hereby conferred upon the Vendors. The Purchaser shall, from time to time after
the Security Interest has become enforceable, do all such acts and things and
execute and deliver all such transfers, assignments and instruments as the
Vendors may request for facilitating the sale, transfer, or other disposition of
the Securities.

15.   NOTICES

      Any notices, directions and other communications provided for in this
Agreement shall be in writing and given in accordance with the provisions of the
Purchase Agreement.

16.   DISCHARGE

      The Security Interest shall be discharged upon, but only upon, the full
and complete payment and performance of the Obligations. Upon such discharge of
the Security Interest

<PAGE>

                                     - 7 -

and at the request and expense of the Purchaser, the Vendors shall execute and
deliver to the Purchaser such releases and discharges of the Security Interest
as the Purchaser may reasonably require.

17.   HEADINGS, ETC.

      The division of this Agreement into Sections and the insertion of headings
in this Agreement are for convenience of reference only and are not to affect
the interpretation of this Agreement or any part thereof. In construing this
Agreement, all words and personal pronouns relating thereto shall be read and
construed as the number and gender of the party or parties referred to in each
case require, and the verb agreeing therewith shall be construed as agreeing
with the required word and pronoun. Words such as "hereunder", "hereto",
"hereof, "herein", and other words commencing with "here", shall, unless the
context clearly indicates the contrary, refer to the whole of this Agreement and
not to any particular Section or part thereof.

18.   SEVERABILITY

      If any provision of this Agreement shall be deemed by a court of competent
jurisdiction to be invalid, void or unenforceable at law, then such provision
shall be deemed to be severed from this Agreement and the remaining provisions
shall remain in full force and effect and binding.

19.   GOVERNING LAW

      This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein. The Parties hereby irrevocably attorn and covenant to
submit in any suit, action or other legal proceeding arising out of or related
to this Agreement to the jurisdiction of the courts of the Province of Ontario.

<PAGE>

                                     - 8 -

20.   SUCCESSORS AND ASSIGNS

      This Agreement shall be binding upon the Parties and their respective
successors (including but not limited to successors by continuance or
amalgamation), and shall enure to the benefit of the Vendors and each of their
respective heirs, executors, administrators, personal legal representatives,
successors and assigns. This Agreement may not be assigned by any of the
Parties, in whole or in part, without the prior express written consent of the
Vendors.

      IN WITNESS WHEREOF the Parties have duly executed this Agreement.

                                                BSTACQUISITION LTD.

                                                By: /s/ CHARLES E. VANELLA
                                                    ----------------------------
                                                    Authorized Signing Officer
                                                    Name:
                                                    Title:
                                                    I have the authority to bind
                                                    the Purchaser

                                                STEELBANK INC.

                                                By: /s/ PETER FARQUHAR
                                                    ----------------------------
                                                      Authorized Signing Officer
                                                      Name: PETER FARQUHAR
                                                      Title: DIRECTOR
                                                      I have the authority to
                                                      bind the Corporation

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