Document:

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                                                                    EXHIBIT 10.2

                              [FIRST NATIONAL LOGO]

                              FINANCIAL CORPORATION

May 12, 2005

Steelbank Tubular Inc.
2495 Haines Road
Toronto, Ontario
L4Y 1Y7

ATTENTION: MR. PETER FARQUHAR

Dear Sirs:

             RE: STEELBANK TUBULAR INC.
                 2495 HAINES ROAD, TORONTO, ONTARIO.

First National Financial Corporation (the "Lender") is pleased to offer a first
mortgage loan (the "Loan") to Steelbank Tubular Inc. (the "Borrower") on the
terms and conditions set out in this letter (the "Commitment").

1.    LOAN AMOUNT

      $3,500,000.00

2.    INTEREST RATE

      In accordance with the attached Schedule 3.

3.    TERM

      One (1) year from the Interest Adjustment Date (as hereinafter defined)
      (the "Term").

4.    AMORTIZATION

      Twenty Five (25) years (the "Amortization Period").

5.    INTEREST ADJUSTMENT DATE

      The interest adjustment date (the "Interest Adjustment Date") shall be the
      first day of the calendar month Immediately following the date of the
      first advance under the Loan, or at the Lender's option, the first day of
      the month in which the first advance of the Loan is made, unless the first
      advance of the Loan is made on the first day of

100 University Avenue. Suite 700, North Tower . Toronto. Ontario Canada M5J 1V6
Tel. 416.593.1100 Fax. 416.593.1900 www.firstnational.ca

      VANCOUVER        CALGARY       TORONTO        MONTREAL          HALIFAX

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                                       -2-

      a month in which case the Interest Adjustment Date shall be the date of
      the advance.

      In the case of multiple advances, at the Lender's option the Interest
      Adjustment Date may by the first day of the month following the final
      advance.

6.    REPAYMENT

      Equal instalments of principal and interest based on the above
      amortization period shall be payable on the first day of each month during
      the Term, the first instalment being payable on the first day of the month
      after the Interest Adjustment Date and the last, on the maturity date of
      the Loan.

      Until the Interest Adjustment Date, simple interest on the portion of the
      Loan advanced, calculated daily, is payable either on the Interest
      Adjustment Date or if applicable, on the first day of each month prior to
      the Interest Adjustment Date, or, at the option of the Lender, such
      interest may be deducted from the amount of the advance.

7.    PREPAYMENT

      There shall be the right of prepayment of the Loan in whole or in part
      without penalty.

8.    REALTY TAXES

      Borrower will pay to the Lender on the first day of each month an amount
      stipulated by the Lender from time to time sufficient to provide a fund to
      pay in full, the annual property taxes (including any local improvement
      charges) for the Property (as hereinafter defined) at the time that the
      first instalment of taxes for each year becomes due, based on estimated
      annual taxes and subject to adjustment based on taxes actually levied.

9.    PROCESSING FEE

      The Borrower shall pay to the Lender upon the acceptance of this
      Commitment a non-refundable loan processing fee of $35,000.00, which will
      be deducted on closing.

10.   COMMITMENT FEE

      The Borrower shall pay to the Lender upon the acceptance of this
      Commitment, a commitment fee of $70,000.00 (the "Commitment Fee") by
      certified cheque. Upon disbursement of the whole Loan Amount, the
      Commitment Fee shall be returned to the Borrower, without interest. If
      Lender defaults on advance the Borrower will be reimbursed the Commitment
      Fee and Processing Fee. In the event this Commitment is cancelled by the
      Borrower, the Commitment Fee shall be retained by the Lender as liquidated
      damages, and not as a penalty, without prejudice to the right of the
      Lender to claim such further and other damages as it may sustain by reason
      of the occurrence of any of the events detailed in subsections (i) through
      (v)

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                                       -3-

      of the Section of this Commitment headed "Cancellation of Commitment". It
      is agreed that the Commitment Fee represents the reasonable cost of the
      Lender's work and expenses in underwriting the Loan and that it is not a
      penalty.

11.   SECURITY

      The following security shall be required for the Loan:

      (a)   a first in priority mortgage and charge (the "Mortgage") of the fee
            simple interest of the Borrower in the following lands and
            improvements thereon (the "Property"):

            Municipal Address:  2495 Haines Road, Toronto, Ontario

            Site Area:          Site Area: 12.26 acres

            Description:        a freestanding, single storey office building
                                and a separate rear industrial building,
                                together totalling 99,848 square feet,
                                approximately 40 years old.

      (b)   a first in priority general assignment of rents and/or leases of the
            Property;

      (c)   a second in priority general security agreement over all the
            Borrower's present and after-acquired personal property located on,
            related to, arising from or used or acquired in connection with the
            Property;

      (d)   Intentionally deleted.

      (e)   a Guarantee and Postponement of Claim from

            Tarpon Industries Inc.

            (the "Additional Covenantors") who shall be jointly and severally
            liable with the Borrower for all obligations of the Borrower under
            the Mortgage, all security collateral thereto and this Commitment;
            and

      (f)   such further security as the Lender may reasonably require

            (the documents in (a) through (f) above being herein referred to as
            the "Security Documents"). The Security Documents shall be prepared
            by the Lender's counsel in form and content determined by the
            Lender.

12.   SPECIAL CONDITIONS

      Repair Holdback

A holdback of $80,000.00 shall be required until such time as the Borrower
provides evidence satisfactory to the Lender that the following repairs in
paragraph (i) below to the Property have been completed:

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(I) THE REMOVAL OF THE EXISTING ROOF SYSTEM DOWN TO THE STEEL DECK AND THE
INSTALLATION OF APPROXIMATELY 87,000 SQUARE FEET OF NEW EPDM ROOF CONSTRUCTION,
INCLUDING 1.5-INCH POLYISOCYANURATE INSULATION.

(II) THE DECOMMISSIONING AND REMOVAL OF THE TWO EXISTING UNDERGROUND STORAGE
TANKS PRESENT ON THE NORTH SIDE OF THE PROPERTY ALONG WITH THE CONDUCTION OF
SOIL SAMPLING. ANY CONTAMINATION ENCOUNTERED SHALL BE REMEDIATED ACCORDING TO
THE STANDARDS DETAILED IN ONTARIO RE. 153/04.

Prior to funding, the Borrower shall provide an undertaking to complete the
aforesaid repairs in a good and workmanlike manner. Prior to release of the
holdback monies the Borrower will provide the Lender with a report from an
engineering consultant satisfactory to the Lender confirming that the aforesaid
repairs in (i) above have been completed in a good and workmanlike manner.

The holdback monies shall be treated as advanced and the Borrower shall pay
interest thereon in accordance with the Mortgage as if such monies had been
advanced.

Default under the undertaking shall constitute default under the Mortgage. In
the event that the Borrower does not complete the aforesaid repairs by December
30, 2005, then the Lender may, at its sole option, declare the Loan immediately
due and payable or arrange for the completion of such repairs on behalf of the
Borrower and may apply the holdback monies thereto. All monies expended by the
Lender in excess of the holdback monies shall be payable forthwith by the
Borrower to the Lender, shall bear interest at the Interest Rate from the date
same were expended by the Lender and shall be secured by the Mortgage.

13.   CONDITIONS PRECEDENT TO FUNDING

      On or before funds are advanced, the following conditions shall have been
      satisfied.

      (a)   The executed Security Documents shall have been delivered and
            registered with the priority required herein at all appropriate
            registration offices.

      (b)   The Lender shall have been provided with an appraisal report for the
            Property addressed to it, prepared by an appraiser acceptable to the
            Lender and setting out a market value for the Property, which is
            satisfactory to the Lender.

      (c)   The Lender shall have received an environmental site assessment for
            the Property addressed to it, prepared by an environmental
            consultant acceptable to it and confirming to the Lender's
            satisfaction that there are no hazardous substances on or about the
            Property and that the Property complies with all environmental
            laws.

            The Security Documents shall contain representations, warranties and
            covenants and an indemnity with respect to environmental matters,
            all as set out in Schedule 1 hereto.

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                                      -5-

      (d)   The Lender shall have received an engineering report for the
            Property, addressed to it and prepared by an architect or engineer
            satisfactory to it, reporting on the physical condition of the
            Property and setting out the cost to remedy any deficiencies, all of
            which shall be acceptable to the Lender; this report should
            indicate, inter alia, that the buildings on the Property are
            structurally sound and are not composed of unbonded, post-tensioned
            structures.

      (e)   Delivery of certified copies of the property, liability and other
            insurance policies in compliance with the insurance requirements
            hereinafter set out and the review and approval of same by the
            Lender's insurance consultant at the Borrower's expense ($375.00
            plus GST).

      (f)   Delivery of a building location survey/certificate of location for
            the Property prepared by a licensed surveyor and satisfactory to the
            Lender.

      (g)   Title to the Property shall be satisfactory to the Lender and all
            realty taxes, local improvement charges and rates in respect of the
            Property shall have been paid.

      (h)   The Lender shall be satisfied that the Property complies with all
            applicable building and zoning by-laws, that the use of the Property
            is in compliance with all applicable legislation, including the
            applicable Fire Code and that there are no outstanding work orders,
            deficiency notices, directives, investigations or the like with
            respect to the Property.

      (i)   Intentionally deleted.

      (j)   Intentionally deleted.

      (k)   The Lender shall have received and approved a copy of the property
            management agreement for the Property (if applicable).

      (1)   The Lender shall have received certified or notarized copies of the
            constating documents of the Borrower, & government issued
            certificate confirming that the Borrower is in good standing and an
            opinion from the Borrower's counsel addressed to the Lender
            confirming both the Borrower's capacity to grant the security
            required herein and the due authorization, execution and delivery of
            the Security Documents, in form and content satisfactory to the
            Lender. Similar documentation and a similar opinion shall also be
            delivered for each corporate Guarantor.

      (m)   The Borrower shall have delivered to the Lender the executed "pre-
            authorized payment" documents hereinafter required.

      (n)   Such financial and other information, statements and documentation
            as the Lender may reasonably require in connection with the
            underwriting or closing of the Loan shall have been delivered to it
            and all other requirements of this Commitment shall have been
            satisfied.

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      All conditions precedent to funding expressed herein are for the sole
      benefit of the Lender and may be waived at its option. The Borrower shall
      do everything necessary to meet all such conditions precedent.

14.   LEASES

      Intentionally Deleted.

15.   PROPERTY MANAGEMENT

      The Lender acting reasonably shall have the right to require the Borrower
      to retain professional property management for the Property satisfactory
      to the Lender. The Lender shall also have the right to approve the terms
      and conditions of the management agreement. Any change in the management
      of the Property shall require the prior written approval of the Lender,
      both as to manager and the terms and conditions of the management
      agreement.

16.   INSURANCE

      The Borrower will comply with the insurance requirements set out in
      Schedule 2 hereto.

17.   FINANCIAL REPORTING

      Within 120 days of the end of each of its fiscal years, or if the Borrower
      is an individual, each calendar year, or more often if requested by the
      Lender, the Borrower shall provide to the Lender:

      (a)   Audited financial statements of the Borrower and of any corporate
            Additional Covenantor, including a Balance Sheet and supporting
            schedules, a detailed Statement of Income and Expenditures and
            supporting schedules, and a Statement of Change in Cash Flow; in the
            case of an individual Borrower or Additional Covenantor, net worth
            statements may be supplied in lieu of financial statements;

      (b)   Audited financial statements in respect of the Property, including a
            Balance Sheet and supporting schedules and a detailed Statement of
            Income and Expenditures and supporting schedules;

      (C)   a current rent roll for the Property containing such detail as may
            be required by the Lender, and

      (d)   a budget for the Property for the next fiscal year, forecasting both
            operating income and expenses and capital expenditures.

      Each Borrower and Additional Covenantor hereby authorizes the Lender to
      obtain such financial information from third parties respecting it or him
      as the Lender may require and covenants to deliver any further financial
      information requested by the Lender.

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                                       -7-

18.   DUE ON SALE, CHANGE OF CONTROL ETC.

      If:

      (a)   the Borrower directly or indirectly sells, conveys, transfers or
            otherwise disposes of its interest in the lands or any part thereof
            or agrees to do so;

      (b)   there is a change in the effective voting control of the Borrower;
            or

      (c)   the Borrower amalgamates or merges;

      without the prior written consent of the Lender being obtained, such
      consent not to be unreasonably withheld, then the Lender may, at its
      option, declare forthwith due and payable the entire balance of the unpaid
      principal together with accrued and unpaid interest due thereon. The
      decision to accelerate the Loan shall be at the sole option of the Lender.
      Consent to one such transaction shall not be deemed to be a waiver of the
      right to require consent to future or successive transactions.

      The Borrower will provide reasonable notice to the Lender of any
      anticipated or impending transaction which would require the consent of
      the Lender under this Section together with such reasonable information as
      the Lender may require to determine whether or not to grant its consent
      thereto.

19.   CHANGES AND ALTERATIONS

      Any major changes in excess of $100,000, additions, and/or alterations
      contemplated to the Property, including major changes in use of the
      Property, must receive the Lender's written consent, such consent not to
      be unreasonably withheld, prior to the commencement of the changes,
      addition and/or alterations. If the Borrower changes and/or alters the
      Property without the prior written consent of the Lender being obtained,
      then the Lender may, at its sole option, declare forthwith due and payable
      the entire balance of the unpaid principal together with the accrued
      interest due thereon. The Borrower will provide reasonable notice to the
      Lender of any anticipated or impending transaction which would require the
      consent of the Lender under this Section together with such reasonable
      information as the Lender may require to determine whether or not to grant
      its consent thereto.

20.   NO FURTHER ENCUMBRANCES

      The Borrower shall not, without the Lender's prior written approval not
      to be unreasonably withheld, further charge or otherwise encumber the
      Property or any interest therein. The Lender acknowledges and approves a
      15-month, Vendor Take Back mortgage of $1,200,000.00 with an interest rate
      of 8% and a 15-month, $500,000.00 3rd mortgage with an interest rate of
      10%.

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                                       -8-

21.   REPRESENTATION AND WARRANTY

      The Borrower and each Additional Covenantor, if any, represent and warrant
      to the Lender that all information and material submitted and all
      representations made to the Lender by the Borrower and/or any Additional
      Covenantor are true, complete and accurate and each of the foregoing
      parties acknowledges that the Lender has relied on such information,
      material and representations in approving the Loan. Any breach of this
      representation and warranty shall constitute a default under the Security
      Documents which shall entitle the Lender to exercise all its rights and
      remedies for default in payment thereunder.

22.   CANCELLATION OF COMMITMENT

      At the sole option of the Lender, this Commitment may be cancelled and
      there shall be no obligation to disburse the Loan if:

      (i)   due to the failure, for any reason, of the Borrower or any
            Additional Covenantor to satisfy any of the provisions or
            requirements hereof, the Lender has not been willing or able to
            disburse the Loan Amount on or before June 30, 2005 (the "Close Out
            Date");

      (ii)  the Borrower or any Additional Covenantor is in breach of any
            provision, representation or warranty herein;

      (iii) in the sole opinion of the Lender there is a material adverse change
            in the position, financial or otherwise, of the Borrower or any
            Additional Covenantor from that represented to the Lender as at the
            date hereof;

      (iv)  in the sole opinion of the Lender, there has been a material adverse
            change in the condition of the Property or in the actual or
            anticipated revenues therefrom from that existing at the date
            hereof; or

      (v)   any situation exists which would constitute a default hereunder or
            under any of the Security Documents.

      If the whole Loan Amount has not been disbursed on or before the Close Out
      Date, the Lender may, at its sole option, close out the Loan Amount at
      the amount then disbursed, if any.

      If the Lender agrees to an extension of the Close Out Date for any reason
      after it has fixed the Interest Rate, the Interest Rate shall increase by
      one and a half basis point (0.015%) for each 7-day period or part thereof
      that the Close Out Date is extended. If this increase results in the
      Interest Rate exceeding the Maximum Rate, the amount of the required buy
      down will be deducted from the advance of funds.

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                                       -9-

23.   LIENS

      On each disbursement date, there shall have been full and complete
      compliance with all requirements of the applicable construction,
      mechanics' or builders' lien legislation and the Borrower shall submit to
      the Lender, in form and substance satisfactory to the Lender, evidence of
      such compliance. The Lender may retain from any disbursement such amounts
      as it considers advisable to protect its interest from subordination under
      such legislation. The Borrower shall provide additional security,
      information and documentation as may be required by the Lender to preserve
      and ensure in all respects the absolute first priority of the Mortgage
      over any rights of any existing or potential lien claimants.

24.   FIRST RIGHT OF REFUSAL ON MATURITY

      Intentionally Deleted.

25.   PRE-AUTHORIZED PAYMENTS

      The Borrower shall execute the requisite documents to allow the Lender to
      withdraw the regular monthly payments of principal, interest and taxes
      from the Borrower's bank account.

26.   EXPENSES

      Whether or not the Loan Amount is disbursed and notwithstanding retention
      of the Commitment Fee by the Lender, all of the Lender's costs and
      expenses, including without limitation all legal fees and disbursements
      and the cost of all reports, appraisals, inspections and investigations
      incurred by the Lender in relation to the Loan and/or this Commitment
      shall be paid by the Borrower. The Borrower shall also be responsible for
      any commission or finder's fee payable in connection with this Commitment.
      All such amounts are payable forthwith, on demand by the Lender, and may
      be added to the principal balance of the Mortgage and shall bear interest
      at the Interest Rate.

27.   CREDIT INVESTIGATIONS

      The Borrower and each Additional Covenantor authorize the Lender to make
      inquiries concerning the character, general reputation, personal
      characteristics, financial and credit data of the Borrower and each
      Additional Covenantor, including its respective directors, officers,
      shareholders, and principals, and to verify any information provided to
      the Lender hereunder, all for the purpose of underwriting and servicing
      the Loan.

28.   CONSENT TO DISCLOSURE

      In the event the Lender sells the Loan or securitizes it into the
      secondary market, the Borrower and each Additional Covenantor consent to
      the release by the Lender of all information and materials in the Lender's
      possession concerning the Borrower, each Additional Covenantor and/or the
      Property to such party or parties.

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                                      -10-

      (including the public in any offering memorandum as may be necessary or
      desirable to facilitate such sale or securitization. In addition, the
      Borrower and each Additional Covenantor agrees that the Lender my share
      any information concerning the Borrower or any Additional Covenantor, as
      the case may be, with (a) any proposed assignee of this Commitment or the
      Loan, (b) the Lender's duly authorized agents or representatives who are
      engaged in the processing or servicing of the Loan.

29.   ADDITIONAL COVENANTORS

      The Additional Covenantors, if any, hereby acknowledge and agree that each
      of them is jointly and severally liable for all covenants and obligations
      of the Borrower under this Commitment and under the Loan.

30.   PUBLICITY

      On completion of funding, the Lender may, at its option, issue a press
      release announcing the Loan with Borrower's written consent, not to be
      reasonably withheld. During the construction of any improvements, the
      Lender may require a sign to be erected and maintained by the Borrower
      evidencing the Lender's financing of same and may place notices thereof in
      the media.

31.   NON-MERGER OF COMMITMENT

      Neither the execution and delivery of any Security Documents nor the
      advance of the Loan shall in any way merge or extinguish this Commitment
      or the terms and conditions contained herein. This Commitment and all its
      provisions shall continue in full force and effect until the Loan has been
      repaid In full; provided that in case of any inconsistency or conflict
      between any provision or provisions of this Commitment and any provision
      or provisions of the Security Documents, the Lender may elect which
      instrument or provision is to prevail.

32.   NO AGENCY

      The Borrower acknowledges that First National Financial Corporation
      ("FNFC") may assign this Commitment to a third party and if it does so
      will receive a fee or commission in connection with such assignment. FNFC
      may also receive a fee in connection with the servicing of this Loan. FNFC
      is not acting as the Borrower's agent or otherwise in any fiduciary
      capacity in relation to the Borrower in connection with this Loan.

33.   ASSIGNMENT

      Neither this Commitment nor any of the Loan proceeds may be assigned by
      the Borrower. This Commitment and the Security Documents may be assigned
      in whole or in part by the Lender at any tune before or after the advance.

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                                      -11-

34.   ENTIRE AGREEMENT

      This Commitment and the Schedules attached hereto, when accepted by the
      Borrower, will constitute the entire agreement and understanding between
      the parties hereto with respect to the Loan and supercede all other
      agreements, understandings or commitments, oral or written.

35.   APPROVALS AND CONSENTS

      Any approvals or consents required to be made or given by the Lender
      hereunder must be expressly given pursuant hereto and shall not be implied
      or construed by the delivery or receipt of documents.

36.   AMENDMENTS AND WAIVERS

      Except as otherwise expressly provided herein, this Commitment cannot be
      waived, altered, amended, discharged or terminated other than by an
      agreement in writing signed by the party against whom enforcement of any
      such waiver, alteration, amendment, discharge or termination is sought.

37.   COMMUNICATIONS

      All communications provided for hereunder shall be in writing, personally
      delivered, sent by prepaid first class mail or sent by electronic
      transmission, and if to the Lender addressed to the address above-noted to
      the attention of the Manager, Mortgage Investments and if to the Borrower
      to the address noted above. The date of receipt of any such communication
      shall be deemed to be the date of delivery, if delivered as aforesaid, or
      the third Business Day following the date of mailing, if mailed, as
      aforesaid. If sent by electronic transmission before 4:00 pm on any
      Business Day, such communication shall be deemed to have been received on
      the date sent; if sent after 4:00 pm on any Business Day or if sent on a
      day which is not a Business Day, such communication shall be deemed to
      have been received on the next following Business Day. Any party hereto
      may change its address for service from time to time by notice in the
      manner herein provided. In the event of a postal disruption or an
      anticipated postal disruption, prepaid first class mail will not be an
      acceptable means of communication.

38.   FURTHER ASSURANCES

      The Borrower and each Additional Covenantor, if any, shall, at the
      Lender's request, execute or deliver such further documentation and enter
      into such other agreements as are necessary for the securing of the Loan
      and the fulfilling of the terms contained herein.

39.   TIME OF THE ESSENCE

      Time shall be of the essence of this Commitment in all respects.

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                                      -12-

40.   GOVERNING LAW

      This agreement shall be governed by and construed in accordance with the
      laws of the Province in which the Property is situate.

41.   INTERPRETATION

      (i)    The headings of all provisions herein are inserted as a matter of
             convenience only and not to define the intent of this document.
             The necessary changes in grammar and gender required to apply to
             the parties hereto shall be assumed as though expressed.

      (ii)   If there is more than one Borrower or if there is an Additional
             Covenantor, or more than one Additional Covenantor, each of the
             covenants, agreements and obligations herein shall, as between and
             among each Borrower and each Additional Covenantor, be deemed to be
             joint and several, except as may otherwise herein specifically be
             provided, and the term "Borrower" shall be read as if each Borrower
             were specifically named and the term "Additional Covenantor" shall
             be read as if each Additional Covenantor were specifically named
             and any default by any one Borrower shall be deemed to be a default
             by each Borrower and any default by any one Additional Covenantor
             shall be deemed to be a default by each Additional Covenantor.

      (iii)  "Business Day" means a day of the week, other than Saturday, Sunday
             or any other day which is a statutory or a municipal holiday in the
             municipality in which the Property is situate.

      (iv)   "Person" includes any individual, partnership, joint venture,
             trust, unincorporated organization or any other association,
             corporation and government or any department or agency thereof.

      (v)    The words "hereto", "herein", "hereunder", "hereof", "hereby",
             "this Commitment", "this agreement" and similar expressions used in
             this Commitment, including the schedules attached hereto, mean or
             refer to this Commitment as a whole and not to any particular
             provision, section or paragraph or other portion of this Commitment
             and include any instrument supplemental or ancillary hereto.

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                                      - 13 -

Acceptance of this Commitment shall create a binding agreement between the
parties hereto on the terms and conditions set out herein. TO ACCEPT THIS
COMMITMENT, KINDLY EXECUTE SAME WHERE INDICATED BELOW AND RETURN IT TOGETHER
WITH THE $70,000.00 COMMITMENT FEE TO THE LENDER BY NO LATER THAN 2 P.M. LOCAL
TIME ON MAY 12, 2005 AT THE ADDRESS NOTED ABOVE.

Failing receipt by the Lender of the executed Commitment together with the
Commitment Fee by the date and time aforesaid, the offer contained in this
Commitment shall be null and void and of no further force and effect unless the
Lender shall have otherwise agreed in writing whether before, on or after such
date.

Yours truly,

FIRST NATIONAL FINANCIAL CORPORATION

Per:  /s/ Moray K. Tawse
      ---------------------------
Moray K. Tawse
Vice President
Mortgage Investments

Accepted on the 12th day of MAY, 2005

STEELBANK TUBULAR INC.

Per:  /s/ J. Peter FARQUHAR
      -----------------------------
               Authorized Signatory
Name:  J. PETER FARQUHAR
Title: CHAIRMAN & CEO.

Per:  _____________________________
               Authorized Signatory
Name:
Title:

<PAGE>

                                      -14-

ADDITIONAL COVENANTOR(S):

TARPON INDUSTRIES INC.

Per: /s/ J. Peter Farquhar
     ------------------------------
               Authorized Signatory
Name:  J. PETER FARQUHAR
Title: CHAIRMAN & CEO.

Attachments
------------

Schedule 1 - Environmental Provisions
Schedule 2 - Insurance Requirements
Schedule 3 - Interest Rates

<PAGE>

                                      -15-

                                   SCHEDULE 1

In this Schedule and in the Mortgage the following words shall have the
following meanings:

"APPLICABLE LAWS" means, in respect of any person, property, transaction or
event, all applicable federal, provincial or municipal laws, statutes,
regulations, rules, by-laws, policies and guidelines, orders, permits, licences,
authorizations, approvals and all applicable common law or equitable principles
in force and effect during the currency of this Charge.

"ENVIRONMENTAL LAWS" means all present and future Applicable Laws, standards and
requirements relating to environmental or occupational health and safety
matters, including those relating to the presence, release, reporting,
licensing, permitting, investigation, disposal, storage, use, remediation and
clean-up or any other aspect of a Hazardous Substance.

"ENVIRONMENTAL PROCEEDING" means any investigation, action, proceeding,
conviction, fine, judgement, notice, order, claim, directive, permit, license,
approval, agreement or Lien of any nature or kind arising under or relating to
Environmental Laws.

"HAZARDOUS SUBSTANCE" means any substance or material that is prohibited,
controlled, otherwise regulated by any governmental authority or is otherwise
hazardous in fact, including without limitation contaminants, pollutants,
asbestos, lead, urea formaldehyde foam insulation, polychlorinated by-phenyls or
hydrocarbon products, any materials containing same or derivates thereof,
explosives, radioactive substances, petroleum and associated products,
underground storage tanks, dangerous or toxic substances or materials,
controlled products, and hazardous wastes.

Representations Regarding Environmental Matters

The Property and all businesses and operations conducted thereon comply with all
Environmental Laws. The Property has not been used for or designated as a waste
disposal site and, except as disclosed in the environmental audit obtained by
the Chargee prior to the advance of funds under this Charge (the "Environmental
Audit"), contains no Hazardous Substances and there is no existing or threatened
Environmental Proceeding against or affecting the Property. Copies of all
existing environmental assessments, audits, tests and reports relating to the
Property have been delivered to the Chargee. To the best of the Chargor's
knowledge and belief, there are no pending or proposed changes to Environmental
Laws or to any Environmental Proceedings which would render illegal or
materially restrict or change the present use and operation of the Property.
Except as disclosed in the Environmental Audit, neither of the Chargor nor, to
the best of the Chargor's knowledge and belief after due inquiry and
investigation, any other person or organization: (i) has used or permitted the
use of the Property to generate, manufacture, refine, treat, transport, store,
handle, dispose, transfer, produce or, process Hazardous Substances; (ii) has
been subject to any Environmental Proceeding related to the Property; (iii) has
caused or permitted the release or discharge of any Hazardous Substance on or in
the vicinity of the Property; (iv) has received or otherwise has knowledge of
any Environmental Proceedings or of any facts which could give rise to any
Environmental Proceeding related to the Property; (v) has undertaken any

<PAGE>

                                      -16-

remediation or clean-up of any Hazardous Substance on or in the vicinity of the
Property; or (vi) has defaulted in reporting any occurrence or circumstance to
any governmental authority in relation to the Property which is or was required
to be reported pursuant to any Environmental Laws.

Covenants Regarding Environmental Matters

The Chargor shall: (i) ensure that the Property and the Chargor comply with all
Environmental Laws at all times; (ii) not permit any Hazardous Substance to be
located, manufactured, stored, spilled, discharged or disposed of at, on or:
under the Property (except in the ordinary course of business of the Chargor or
any tenant and in compliance with all Environmental Laws) nor permit any other
activity on or in respect of the Property that might result in any Environmental
Proceeding affecting the Property, Chargor or Chargee; (iii) notify the Chargee
promptly of any threatened or actual Environmental Proceedings; (iv) remediate
and cure in a timely manner any non-compliance by the Property or the Chargor
with Environmental Laws, including removal of any Hazardous Substances from the
Property; (v) maintain all environmental and operating documents and records
including all permits, licenses, certificates, approvals, orders and agreements
relating to the Property as required by Environmental Laws; (vi) provide the
Chargee promptly upon request with such information, documents, records,
permits, licences, certificates, approvals, orders, agreements, environmental
audits, reports, assessments and inspections and take such other steps (all at
the Chargor's expense) as may be required by the Chargee to confirm and/or
ensure compliance by the Property and the Chargor with Environmental Laws, and
(vii) execute all consents, authorizations and directions necessary to permit
any inspection of the Property by any governmental authority and to permit the
release to the Chargee or its representatives, of any information relating to
the Property and the Chargor.

Environmental Indemnity

Without limiting any other provision of this Charge or any;document collateral
hereto, the Chargor shall indemnify and pay, protect, defend and save the
Chargee harmless from and against all actions, proceedings, losses, damages,
liabilities, claims, demands, judgments, costs, expenses, (including legal fees
and disbursements on a solicitor and his own client basis) (collectively
"Environmental Claims"), imposed on, made against or incurred by the Chargee
arising from or relating to, directly or indirectly, and whether or not
disclosed by the Environmental Audit and whether or rot caused by the Chargor or
within its control, (i) any actual or alleged breach of Environmental, Laws
relating to or affecting the Property, (ii) the actual or alleged presence,
release, discharge or disposition of any Hazardous Substance in, on, over,
under, from or affecting all or part of the Property or surrounding lands,
including any personal injury, or property damage prising therefrom, (iii) any
actual or threatened Environmental Proceeding affecting the Property including
any settlement thereof, (iv) any assessment, investigation, containment,
monitoring, remediation and/or removal of all Hazardous Substances from all or
part of the Property or surrounding areas or otherwise complying with
Environmental Laws, or (v) any breach by the Chargor of any covenant hereunder
or under any document collateral hereto or under Applicable Law relating to
environmental matters. This indemnity shall survive repayment of the loan
secured hereby, foreclosure upon this Charge and any other extinguishing of the
obligations of the Chargor under this Charge and any other exercise by the
Chargee of any remedies available to it against the Chargor.

<PAGE>

                                      -17-

SCHEDULE 2

Insurance Requirements

The Borrower will at all times during the Term maintain the insurance required
by the Mortgage including without limitation the following coverages:

      (a)   all risks of direct physical loss or damage, including, without
            limitation, coverage for the foundations of all improvements and
            flood and earthquake coverage, ail on a replacement cost basis with,
            loss payable to the Lender under an Insurance Bureau of Canada
            mortgage clause; the policy should allow for the improvements on
            the Property to be completed (if applicable), for partial occupancy,
            and for the Property to be vacant and unoccupied for a period of at
            least 30 days;

      (b)   comprehensive broad form boiler and machinery insurance covering
            all pressure vessels (whether fired or unfired), air conditioning
            and miscellaneous electrical apparatus on the Property, for an
            amount satisfactory to the Lender, with loss payable to the Lender
            under a Boiler and Machinery Insurance Association mortgage clause;

      (c)   business interruption or rental income loss coverage on a gross
            profits or rentals form sufficient to cover 100% of the loss of rent
            or loss of business income from the business conducted on the
            Property for a period of twelve (12) months, based on the greater of
            actual or projected revenue, in respect of all perils described in
            (a) and (b) above; and

      (d)   comprehensive general liability insurance, inclusive of bodily
            injury, death or property damage or loss, for a minimum amount of
            $5,000,000 per occurrence or such other amount as the Lender may
            reasonably request.

      The coverage required by sections (a) and (b) above shall include by-law
      endorsements acceptable to the Lender, including but not limited to same
      site waiver, increased cost of construction, undamaged portion coverage
      and demolition and debris coverage.

All policies shall be on a "no co-insurance" basis. All such insurance shall be
placed with a company or companies satisfactory to the Lender. Deductible
amounts shall also be subject to Lender's approval. All cancellations and
alteration clauses in the above referenced policies; Including those obtained in
the mortgage clause endorsements, shall provide for at least thirty (30) days
prior written notice to the Lender of any cancellation of or material alteration
to the policy. The Borrower shall provide evidence of policy renewal or
satisfactory replacement annually at least thirty (30) days prior to expiry, The
Borrower shall deliver to the Lender original or certified copies of all
policies required hereunder. The Lender shall be entitled to require coverage of
such other risks and perils as the Lender may from time to time consider
advisable or; desirable and in respect of which insurance coverage is available.

<PAGE>

                                      -18-

SCHEDULE 3

Interest Rate

The annual interest rate under the Mortgage shall be the Prime Rate plus 1.25%
calculated monthly not in advance.

Prime Rate means the annual rate of interest announced from time to time by
Royal Bank of Canada during the period when interest accrues hereunder, as a
reference rate then in effect for determining interest rates on Canadian dollar
commercial loans made in Canada.

Notwithstanding the provisions of Section 6 of this. Commitment, instalments of
interest only (with no principal payment) shall be payable in arrears on the
first day of each month.<PAGE>

                                                                    EXHIBIT 10.3

LRO# 43 CHARGE/MORTGAGE             RECEIPTED AS PR852461 on 2005 05 18 at 16:46

The applicant(s) hereby applies to the Land Registrar.   yyyy mm dd Page 1 of 15

PROPERTIES

PIN           13340-0023 LT Estate/Qualifier  Fee Simple Lt Conversion Qualified

Description   PT LT 9, CON 1 SDS TT ; PT LT 33, PL G14 ; PT LT 34, PL G14 ; PT
              LT 35, PL G14 , PART 1, 43R967, S/T RO1094644, S/T TT173300; S/T
              TT175940,TT73395,TT73396
              MISSISSAUGA

Address       02495 HAINES ROAD
              MISSISSAUGA

CHARGOR(S)

The chargor(s) hereby charges the land to the chargee(s). The chargor(s)
acknowledges the receipt of the charge and the standard charge terms, if any.

Name                   STEELBANK TUBULAR INC.

Address for Service    2495 Haines Road
                       Mississauga, Ontario
                       L4Y 1Y7

I, J. Peter Farquhar, Chairman and CEO, have the authority to bind the
corporation.

This document is not authorized under Power of Attorney by this party.

Chargee(s)                                  Capacity                      Share

Name                   THE EQUITABLE TRUST COMPANY

Address for Service    c/o First National Financial Corporation
                       100 University Avenue
                       Suite 700 - North Tower
                       Toronto, Ontario
                       M5J 1V6
                       Loan No.: 507614

STATEMENTS

Schedule: See Schedules

PROVISIONS

Principal                      $3,500,000.00                 Currency       CDN
Calculation Period             monthly, not in advance
Balance Due Date               2006/06/01
Interest Rate                  RBC Prime Rate + 1.25%
Payments
Interest Adjustment Date       2005 06 01
Payment Date                   1st day monthly
First Payment Date             2005 07 01
Last Payment Date              2006 06 01
Standard Charge Terms          200033
Insurance Amount               full insurable value
Guarantor                      Tarpon Industries Inc.

SIGNED BY

<TABLE>
<S>                  <C>                             <C>                    <C>     <C>
Brett Jason Tkatch   2 Queen Street East Suite 1500  acting for Chargor(s)  Signed  2005 05 18
                     Toronto M5C 3G5

Tel       4165931221
Fax       4165935437
</TABLE>

SUBMITTED BY

BLANEY MCMURTRY LLP    2 Queen Street East Suite 1500              20050518
                       Toronto M5C 3G5

Tel       4165931221

<PAGE>

LRO# 43 CHARGE/MORTGAGE             RECEIPTED AS PR852461 ON 2005 05 18 at 16.46

The applicant(s) hereby applies to the Land Registrar.   yyyy mm dd Page 2 of 15

SUBMITTED BY

Fax      4165935437

FEES/TAXES/PAYMENT

Statutory Registration Fee          $60.00
Total Paid                          $60.00

FILE NUMBER

Chargee Client File Number:               0506730238

<PAGE>
                                                                               1

        THIS IS A SCHEDULE ATTACHED TO A CHARGE/MORTGAGE OF LAND BETWEEN
                             STEELBANK TUBULAR INC.
                         AND THE EQUITABLE TRUST COMPANY
                     AS GUARANTEED BY TARPON INDUSTRIES INC.
      PURSUANT TO A SEPARATE STANDALONE GUARANTEE AND POSTPONEMENT OF CLAIM
   RELATING TO THOSE LANDS LEGALLY DESCRIBED UNDER THE HEADING "PROPERTIES" ON
        PAGE 1 OF THE CHARGE/MORTGAGE TO WHICH THIS SCHEDULE IS ATTACHED,
         AND MUNICIPALLY KNOWN AS 2495 HAINES ROAD, MISSISSAUGA, ONTARIO

1.    STANDARD CHARGE TERMS

      The terms contained in this schedule are in addition to the terms
      contained in the Standard Charge Terms 200033. In the event of any
      conflict between the terms contained in this schedule and those contained
      in the Standard Charge Terms, the terms contained in this schedule shall,
      to the extent of the conflict, prevail.

2.    SHORT FORMS OF MORTGAGES ACT

      If any of the forms of words contained herein are also contained in Column
      One of Schedule 6 of the Short forms of Mortgages Act, R.S.O. 1980, Ch.
      474 ("SFMA') and distinguished by a number therein, this Charge shall be
      deemed to include and shall have the same effect as if this Charge
      contained the form of words in Column Two of Schedule B of the SFMA
      distinguished by the same number, and this Charge shall be interpreted as
      if the SFMA was still in full force and effect. The provisions of this
      Charge and its short form clauses shall not derogate from the Chargee's
      rights under the long clauses in the SFMA which shall be in addition
      thereto or in substitution for part or parts thereof as the Chargee may
      elect and all shall have the force of covenant.

3.    DEFINITIONS

      In this schedule, the following definitions apply:

      (a)   "APPLICABLE LAWS" means, in respect of any person, property,
            transaction or event, all applicable federal, provincial or
            municipal laws, statutes, regulations, rules, by- laws, policies and
            guidelines, orders, permits, licences, authorizations, approvals and
            all applicable common kw or equitable principles in force and effect
            during the currency of this Charge;

      (b)   "BALANCE DUE DATE" means the 1st day of June, 2006;

      (c)   "BUSINESS DAY" means a day other than a Saturday, Sunday or
            Statutory Holiday in Toronto, Ontario.

      (d)   "CHARGE", "CHARGE OF LAND" and "CHARGE/MORTGAGE OF LAND" mean this
            Charge of Land made pursuant to the Land Registration Reform Act and
            any amendments thereto and including the Standard Charge Terms;

      (e)   "CHARGEE" means The Equitable Trust Company and its successors and
            assigns;

      (f)   "CHARGOR" means Steelbank Tubular Inc. and its successors and
            assigns;

      (g)   "COMMITMENT LETTER" means the letter issued by First National
            Financial Corporation dated as of May 12th, 2005 setting out the
            terms of the loan secured by this Charge, as it may be amended from
            time to time;

      (h)   "COSTS" means all of the fees, costs, charges, losses, damages and
            expenses incurred by the Chargee as a direct or indirect consequence
            of granting the loan secured by this Charge including, without
            limitation, all expenses incurred in the construction, preservation,
            maintenance, repair, insuring and realization of the security
            contained herein, and all legal costs incurred by the Chargee on a
            substantial indemnity basis;

      (i)   "COVENANTOR" means Tarpon Industries Inc. and its successors and
            assigns;

<PAGE>
                                                                               2

      (j)   "ENVIRONMENTAL LAWS" means all present and future Applicable Laws,
            standards and requirements relating to environmental or occupational
            health and safety matters, including those relating to the presence,
            release, reporting, licensing, permitting, investigation, disposal,
            storage, use, remediation and clean-up or any other aspect of a
            Hazardous Substance.

      (k)   "ENVIRONMENTAL PROCEEDING" means any investigation, action,
            proceeding, conviction, fine, judgement, notice, order, claim,
            directive, permit, license, approval, agreement or Lien of any
            nature or kind arising under or relating to Environmental Laws.

      (l)   "HAZARDOUS SUBSTANCE" means any substance or material that is
            prohibited, controlled, otherwise regulated by any governmental
            authority or is otherwise hazardous in fact, including without
            limitation contaminants, pollutants, asbestos, lead, urea
            formaldehyde foam insulation, polychlorinated by-phenyls or
            hydrocarbon products, any materials containing same or derivates
            thereof, explosives, radioactive substances, petroleum and
            associated products, underground storage tanks, dangerous or toxic
            substances or materials, controlled products, and hazardous wastes.

      (m)   "INTEREST" means interest at the Interest Rate calculated monthly
            not in advance and payable on the Principal Amount and such other
            amounts as provided in this Charge both before and after maturity,
            default and judgment;

      (n)   "INTEREST ADJUSTMENT DATE" means the 1st day of June, 2005;

      (o)   "INTEREST RATE" means the Prime Rate plus 1.25% calculated monthly,
            not in advance.

      (p)   "MONTHLY PAYMENTS" means the monthly interest payment to be made
            each month for principal and interest at the Interest Rate on the
            Principal Amount outstanding from time to time based upon a
            twenty-five (25) year amortization period;

      (q)   "PRIME RATE" means the monthly rate of interest announced from time
            to time by Royal Bank of Canada during the period when interest
            accrues as a reference rate then in effect for determining interest
            rates on Canadian Dollar commercial loans made in Canada as
            established from time to time by Royal Bank of Canada.

      (r)   "PRINCIPAL AMOUNT" means the principal amount of $3,500,000.00 in
            lawful money of Canada as it may be increased or decreased prior to
            registration of a discharge of this Charge;

      (s)   "PROPERTY OR CHARGED PROPERTY" means the lands described in the
            Charge to which this Schedule is attached and all buildings,
            fixtures and improvements now or hereafter brought or erected
            thereon;

      (t)   "RECEIVER" means a receiver or receiver-manager of the Property; and

      (u)   "STANDARD CHARGE TERMS" means the set of Standard Charge Terms filed
            as No. 200033.

4.    CHARGE

      Upon the request of the Chargee, the Chargor hereby gives this Charge and
      charges the Property as security for full payment to the Chargee of the
      Principal Amount, Interest and all other amounts payable hereunder and as
      security for the observance and performance of all of the obligations of
      the Chargor to the Chargee pursuant to this Charge or otherwise.

5.    MONTHLY PAYMENTS

      Interest on the Principal Amount from time to time advanced prior to the
      Interest Adjustment Date, computed from the respective dates of such
      advances to the Interest Adjustment Date, shall, at the option of the
      Chargee, be deducted from the advances or paid by the Chargor at such time
      or times as the Chargee may require and such interest may be so deducted
      or paid in advance; after the Interest Adjustment Date, the Principal
      Amount with

<PAGE>
                                                                               3

      Interest computed from the Interest Adjustment Date, shall become due and
      be paid in Monthly Payments and Interest shall become due and payable on
      the Balance Due Date. The Monthly Payments, when received, shall be
      applied firstly to outstanding Costs, and secondly to outstanding Interest
      and lastly to the outstanding Principal Amount. If any payment received is
      less than the Interest due to the effective date of receipt of such
      payment, the Chargee reserves the right, in addition to any other
      available rights, to add the deficiency to the Principal Amount.

6.    REALTY TAXES

      Paragraph 5 of the Standard Charge Terms is hereby amended by adding the
      following:

            "Notwithstanding the provisions contained herein, the Chargor will
            pay to the Chargee on the 1st day of each month an amount stipulated
            by the Chargee representing monthly tax instalments for the annual
            property taxes and local improvement assessments for the Property
            (the "Taxes"), each in an amount determined from time to time by the
            Chargee. Until there is a default under the Charge, the Chargee
            shall from time to time make payments to the taxing authority when
            Taxes are due. Where the Chargee has paid Taxes in excess of those
            collected, such excess amount shall be payable on demand and shall
            be secured by the Charge and bear interest at the Interest Rate.
            After default, the Chargee may, at its sole option, pay Taxes with
            respect to the Property and such payments will be added to the
            Principal Amount. The Chargee reserves the right to adjust, from
            time to time, the estimated monthly tax amount payable based upon
            Taxes actually levied against the Property."

7.    PREPAYMENT PRIVILEGES

      The Chargor, provided it is not in default, shall have the right at any
      time or times to prepay the Principal Amount in whole or in part at any
      time or times during the term of this Charge, without notice, bonus or
      penalty.

8.    PAYMENTS BY CHARGEE

      The Chargee may pay all premiums of insurance and all Taxes, rates,
      levies, charges, assessments, utility and heating charges which shall from
      time to time fall due and be unpaid in respect of the Property and all
      costs, charges, legal fees (on a substantial indemnity basis) and expenses
      as deemed necessary by the Chargee, acting reasonably, to preserve the
      Property and/or to realize upon the Chargee's security and all such
      payments shall be deemed Costs hereunder.

9.    COSTS

      Costs shall be forthwith due and payable by the Chargor to the Chargee and
      shall bear interest at the Interest Rate until fully paid.

10.   PROPERTY MANAGEMENT

      The Chargor shall retain professional property management for the Property
      acceptable to the Chargee. Any change in the management of the Property
      shall require the prior written approval of the Chargee both as to the
      manager and the terms and conditions of the management agreement. If at
      any time during the term of the Charge, the Chargee, acting reasonably, is
      of the opinion that the management of the Property is not being carried
      out in a satisfactory manner, having regard to management standards of
      properties similar to the Property from time to time, the Chargee shall
      have the right to give the Chargor written notice requiring that, within
      thirty (30) days from the date of such notice, the management be improved
      to the Chargee's reasonable satisfaction. The Chargee acknowledges and
      confirms to the Chargor that the present management structure in respect
      of the Property is satisfactory to the Chargee.

      If management is not improved to the Chargee's reasonable satisfaction,
      the Chargee shall have the right to appoint professional property
      management and the cost of such management shall be borne by the Chargor.
      In the event that the Chargee appoints professional property management,
      it shall not constitute the Chargee as a mortgagee in possession of or in
      control and management of the Property.
<PAGE>

                                                                               4

11.   REPORTING, INSPECTION, MAINTENANCE AND REPAIRS

      The Chargor shall provide the Chargee with such financial and other
      reports as the Chargee may require from time to time regarding the
      Property and its management. The reporting shall include reporting on the
      payment of operating expenses including, but not limited to, repair and
      maintenance, utilities, insurance, management fees and cleaning services.
      The Chargee and its agents shall have the right to inspect the Property at
      any time upon reasonable notice to the Chargor and to increase the
      frequency of inspection if a deficiency is identified. Failure of the
      Chargor to pay operating expenses of the Property in a timely manner
      shall, at the option of the Chargee, be a default under this Charge. If
      the Chargee identifies deficiencies in the repair or maintenance of the
      Property, or perceives a general deterioration in the management of the
      Property or in the payment of operating expenses, the Chargee may require
      the Chargor to establish funded repair and maintenance reserves or appoint
      a consultant or monitor as provided further herein.

12.   CHANGES AND ALTERATIONS

      Any major changes, additions, and/or alterations in excess of $100,000.00
      contemplated to the Property, including major changes in usage of the
      Property, must receive the Chargee's written consent, such consent not to
      be unreasonably withheld, prior to the commencement of the changes,
      additions and/or alterations.

      If the Chargor changes and/or alters the Property without the prior
      written consent of the Chargee being obtained, then the Chargee may, at
      its option, declare forthwith due and payable the entire balance of the
      unpaid Principal Amount together with the accrued Interest due thereon.

      The decision to accelerate the Charge shall be at the sole option of the
      Chargee. Consent to one such transaction shall not be deemed to be a
      waiver of the right to require consent to future or successive
      transactions.

      The Chargor will provide reasonable notice to the Chargee of any
      anticipated or impending transaction which would require the consent of
      the Chargee under this clause together with such reasonable information as
      the Chargee may require to determine whether or not to grant its consent
      thereof.

13.   SUBSEQUENT ENCUMBRANCES

      Save and except for a second Charge/Mortgage of Land to be registered in
      favour of 1387746 Ontario Inc. ("1387746 Ontario") securing the principal
      sum of $1,200,000.00, bearing interest at the rate of eight percent (8%)
      per annum and having a term of fifteen (15) months and a third
      Charge/Mortgage of Land to be registered in favour of 1387746 Ontario
      securing the principal sum of $500,000.00, bearing interest at the rate of
      ten percent (10%) per annum and having a term of fifteen (15) months
      (collectively hereinafter referred to as the "1387746 Ontario Charges"),
      the Chargor shall not further mortgage, charge or encumber the Property
      without the prior written consent of the Chargee. In the event such
      consent is not obtained, the Chargee may, at its option, declare forthwith
      due and payable the entire balance of the unpaid Principal Amount together
      with accrued and unpaid Interest due thereon. The decision to accelerate
      the Charge shall be at the sole option of the Chargee. Consent to one such
      transaction shall not be deemed to be a waiver of the right to require
      consent to future or successive transactions. Provided further in the
      event consent is given to a subsequent Charge/Mortgage of Land or
      encumbrance, the Chargor acknowledges such consent shall continue to be
      predicated on the understanding the subsequent Charge/Mortgage of Land or
      encumbrance, including the 1387746 Ontario Charges, do not contain a cross
      default provision to the Charge herein. Furthermore, in the event the
      Chargor defaults in the payment of any instalment of principal or interest
      payable under any subsequent Charge/Mortgage of Land, including the
      1387746 Ontario Charges, or other encumbrance affecting the Property,
      whether the Chargee has consented thereto or not, or in the observance or
      performance of any of the agreements, terms or provisions of any such
      Charge/Mortgage of Land or other encumbrance, then at the option of the
      Chargee the entire balance of the unpaid Principal Amount, together with
      accrued and unpaid Interest due thereon, shall become due and payable at
      the option of the Chargee and the Chargee shall be entitled to exercise
      all of its rights and remedies hereunder.

<PAGE>

                                                                               5

      The Chargor will provide reasonable notice to the Chargee of any
      anticipated or impending transaction which would require the consent of
      the Chargee under this clause together with such reasonable information as
      the Chargee may require to determine whether or not to grant its consent
      thereof.

14.   SURVIVAL OF COMMITMENT LETTER

      The Chargor acknowledges that this Charge has been delivered pursuant to
      the terms of the Commitment Letter and that the terms of the Commitment
      Letter shall survive the delivery and registration of this Charge and that
      there shall be no merger of those terms in this Charge or in any other
      security for the loan secured by this Charge. In the event of an
      inconsistency or conflict between any provision or provisions in the
      Commitment Letter and any provision or provisions in this Charge and any
      of the related loan documents, the Lender shall elect which shall prevail.

15.   DUE ON SALE OR CHANGE OF CONTROL

      If:

      (a)   the Chargor directly or indirectly sells, conveys, transfers or
            otherwise disposes of its interest in the Property or any part
            thereof; or

      (b)   the Chargor directly or indirectly agrees to sell, convey, transfer
            or otherwise dispose of its interest in the Property or any part
            thereof; or

      (c)   the effective voting control of the Chargor changes; or

      (d)   the Chargor amalgamates or merges;

      without the prior written consent of the Chargee being obtained, such
      consent not to be unreasonably withheld, then the Chargee may, at its
      option, declare forthwith due and payable the entire balance of the unpaid
      Principal Amount together with accrued and unpaid Interest due thereon.

      The decision to accelerate the Charge shall be at the sole option of the
      Chargee. Consent to one such transaction shall not be deemed to be a
      waiver of the right to require consent to future or successive
      transactions.

      The Chargor will provide reasonable notice to the Chargee of any
      anticipated or impending transaction which would require the consent of
      the Chargee under this clause together with such reasonable information as
      the Chargee may require to determine whether or not to grant its consent
      thereof.

16.   CHARGEE NOT A CHARGEE IN POSSESSION

      It is agreed that the Chargee, in exercising any of its rights under this
      Charge, shall be deemed not to be a chargee in possession or a mortgagee
      in possession of the Property.

17.   FINANCIAL REPORTING

      Within one hundred and twenty (120) days after the end of its fiscal year,
      or if the Chargor is an individual each calendar year or more often if
      requested by the Chargee, the Chargor will deliver to the Chargee the
      following documents and information, all of which shall be satisfactory to
      the Chargee in form and content:

      (a)   audited financial statements of the Chargor, including a Balance
            Sheet and supporting schedules, a detailed Statement of Income and
            Expenditures and supporting schedules and a statement of Change in
            Cash Flow;

      (b)   audited financial statements of Tarpon Industries Inc., including a
            Balance Sheet and supporting schedules, a detailed Statement of
            Income and Expenditures and supporting schedules, and a Statement of
            Change in Cash Flow;

      (c)   audited financial statements in respect of the Property, including a
            Balance Sheet and supporting schedules and a detailed Statement of
            Income and Expenditures and supporting schedules;

<PAGE>

                                                                               6

      (d)   a current rent roll for the Property containing such detail as may
            be required by the Chargee; and

      (e)   a budget for the Property for the next fiscal year, forecasting both
            operating income and expenses and capital expenditures.

18.   SALE BY CHARGOR

      No sale or other dealing by the Chargor with the Property or any part
      thereof shall in any way change or affect the liability of the Chargor
      hereunder, or in any way alter the rights of the Chargee as against the
      Property, the Chargor or any other person or persons liable for payment of
      the Principal Amount, Interest and Costs.

19.   PLACE OF PAYMENTS

      All payments under this Charge shall be made to the Chargee at its
      principal offices in Toronto, Ontario or as it or its agents may otherwise
      direct. Any payment made by the Chargor to the Chargee that is received by
      the Chargee on a non-Business Day after 1:00 p.m. Eastern Standard Time on
      any Business Day shall be deemed to have been received by the Chargee on
      the next Business Day.

20.   INSURANCE

      Paragraph 16 of Standard Charge Terms 200033 is amended by adding the
      following:

            "Without limiting the obligations of the Chargor under any provision
            of this Charge, the Chargor shall place or cause to be placed and
            shall keep in force throughout the term of this Charge the insurance
            coverage referred to in paragraph 16 of the Standard Charge Terms
            including, without limitation, the following insurance coverage, in
            respect of the Property:

            (a)   all risks of direct physical loss or damage including, without
                  limitation, coverage for the foundations of all improvements
                  and flood and earthquake coverage, all on a replacement cost
                  basis with loss payable to the Chargee under an Insurance
                  Bureau of Canada mortgage clause; the policy should allow for
                  the improvements on the Property to be completed (if
                  applicable), for partial occupancy and for the Property to be
                  vacant and unoccupied for a period of at least thirty (30)
                  days;

            (b)   comprehensive broad form boiler and machinery insurance
                  covering all pressure vessels (whether fired or unfired), air
                  conditioning and miscellaneous electrical apparatus on the
                  Property for an amount satisfactory to the Chargee with loss
                  payable to the Chargee under a Boiler and Machinery Insurance
                  Association mortgage clause;

            (c)   business interruption or rental income loss coverage on a
                  gross profits or rentals form sufficient to cover 100% of the
                  loss of rent or loss of business income from the business
                  conducted on the Property for a period of not less than twelve
                  (12) months based on the greater of actual or project revenue
                  in respect of all perils stated in paragraphs (a) and (b)
                  above; and

            (d)   comprehensive general liability insurance inclusive of bodily
                  injury, death or property damage or loss, all subject to a per
                  occurrence limit of not less than $5,000,000.00, or such other
                  amount as the Chargee may reasonably request.

            The coverage required by paragraphs (a) and (b) above shall include
            by-law endorsements acceptable to the Chargee, including but not
            limited to same site waiver, increased cost of construction,
            undamaged portion coverage and demolition and debris coverage.

            All policies shall be on a "no co-insurance basis". All such
            insurance shall be placed with a company or companies satisfactory
            to the Chargee. Deductible amounts shall also be subject to the
            Chargee's approval. All cancellations and alteration clauses in any
            policies of insurance, including those obtained in the mortgage
            clause endorsements, shall provide for at least thirty (30) days
            prior written notice to the

<PAGE>

                                                                               7

            Chargee of any cancellation of or material alteration to the policy.
            The Chargor shall provide evidence of policy renewal or satisfactory
            replacement annually, at least thirty (30) days prior to the expiry.
            The Chargor shall further deliver to the Chargee original or
            certified copes of all policies required hereunder upon the written
            request of the Chargee.

            In addition, the Chargee shall be entitled to require coverage of
            such other risks and perils as the Chargee may from time to time
            consider advisable or desirable and in respect of which insurance
            coverage is available."

21.   CONDITION OF THE PROPERTY

      (a)   Environmental Inspection

            The Chargee or an agent of the Chargee may, upon reasonable notice
            to the Chargor, conduct on-site inspections and other investigations
            of the Property and of the current and past uses of the Property
            and, at the sole option of the Chargee, may require an environmental
            assessment by a qualified environmental consultant acceptable to the
            Chargee prior to any advance under the Charge and prior to any
            renewal or extension thereof or, given reasonable cause as
            determined by the Chargee, at any time during the term of the Charge
            or any renewal or extension thereof. Without in any way limiting the
            generality of the foregoing, the Chargee or its agent may enter upon
            the Property upon reasonable notice to the Chargor to conduct
            environmental testing, site assessment, investigation or study
            determined necessary by the Chargee, in its sole discretion. The
            exercise of any of the powers enumerated in this clause shall not
            deem the Chargee or its agents to be in possession, management or
            control of the Property.

            The results of all such inspections, investigations, tests, studies
            and assessments shall be satisfactory to the Chargee and, without
            limitation, evidence the absence of any Hazardous Substance of the
            Property and the absence of any contamination of any part of the
            Property by any Hazardous Substance. If the results of an
            environmental assessment, inspection, test, study or investigation
            conducted during the term of the Charge or any renewal or extension
            thereof are not satisfactory to the Chargee, acting reasonably,
            then, at the option of the Chargee, the entire Principal Amount
            outstanding and accrued Interest thereon shall become immediately
            due and payable. In this regard, the acceptance of any payments by
            the Chargee at any time during or after the term of the Charge or
            any renewal or extension thereof shall not constitute a waiver of or
            otherwise prejudice the right of the Chargee to demand and receive
            full repayment of the Charge.

            All costs of such inspections, investigations and environmental
            assessments shall be borne by the Chargor and shall be paid prior to
            any advance under the Charge or any renewal thereof or added to the
            Charge account, as the case may be, and bear interest at the
            Interest Rate.

      (b)   Representations Regarding Environmental Matters

            The Chargor hereby represents, warrants, covenants and agrees with
            the Chargee (which representations, warranties, covenants and
            agreements shall survive satisfaction or release of the Charge debt
            or extinguishment of the Charge debt) that the Property and all
            businesses and operations conducted thereon comply with all
            Environmental Laws. The Property has not been used for or designated
            as a waste disposal site and, except as disclosed in the
            environmental audit obtained by the Chargee prior to the advance of
            funds under this Charge (the "Environmental Audit"), contains no
            Hazardous Substances and there is no existing or threatened
            Environmental Proceeding against or affecting the Property. Copies
            of all existing environmental assessments, audits, tests and reports
            relating to the Property have been delivered to the Chargee. To the
            best of the Chargor's knowledge and belief, there are no pending or
            proposed changes to Environmental Laws or to any Environmental
            Proceedings that would render illegal or materially restrict or
            change the present use and operation of the Property. Except as
            disclosed in the Environmental Audit, neither of the Chargor nor, to
            the best of the Chargor's knowledge and belief after due inquiry and
            investigation, any other person or

<PAGE>

                                                                               8

            organization: (i) has used or permitted the use of the Property to
            generate, manufacture, refine, treat, transport, store, handle,
            dispose, transfer, produce or process Hazardous Substances; (ii) has
            been subject to any Environmental Proceeding related to the
            Property; (iii) has caused or permitted the release or discharge of
            any Hazardous Substance on or in the vicinity of the Property; (iv)
            has received or otherwise has knowledge of any Environmental
            Proceedings or of any facts which could give rise to any
            Environmental Proceeding related to the Property; (v) has undertaken
            any remediation or clean-up of any Hazardous Substance on or in the
            vicinity of the Property; or (vi) has defaulted in reporting any
            occurrence or circumstance to any governmental authority in relation
            to the Property which is or was required to be reported pursuant to
            any Environmental Laws.

      (c)   Covenants Regarding Environmental Matters

            The Chargor covenants and agrees it shall: (i) ensure that the
            Property and the Chargor comply with all Environmental Laws at all
            times; (ii) not permit any Hazardous Substance to be located,
            manufactured, stored, spilled, discharged or disposed of at, on or
            under the Property (except in the ordinary course of business of the
            Chargor or any tenant and in compliance with all Environmental Laws)
            nor permit any the activity on or in respect of the Property that
            might result in any Environmental Proceeding affecting the Property,
            the Chargor or the Chargee; (iii) notify the Chargee promptly of any
            threatened or actual Environmental Proceeding; (iv) remediate and
            sure in a timely manner any non-compliance by the Property or the
            Chargor with Environmental Laws, including removal of any Hazardous
            Substances from the Property; (v) maintain all environmental and
            operating documents and records including all permits, licenses,
            certificates, approvals, orders and agreements relating to the
            Property as required by Environmental Laws; (vi) provide the Chargee
            promptly upon request with such information, documents, records,
            permits, licenses, certificate, approvals, orders, agreements,
            environmental audits, reports, assessments and inspections and take
            such other steps (all at the Chargor's expense) as may be required
            by the Chargee to confirm and/or ensure compliance by the Property
            and the Chargor with Environmental Laws, and (vii) execute all
            consents, authorizations and directions necessary to permit any
            inspection of the Property by any governmental authority and to
            permit the release to the Chargee or its representatives of any
            information relating to the Property and the Chargor.

      (d)   Environmental Indemnity

            Without limiting any other provision of this Charge or any document
            collateral hereto, the Chargor and Covenantor shall indemnify and
            pay, protect, defend and save the Chargee, its directors, officers,
            agents and employees harmless form and against all actions,
            proceedings, losses, damages, liabilities, claims, demands,
            judgments, costs, expenses (including legal fees and disbursements
            on a substantial indemnity basis) (collectively "Environmental
            Claims"), imposed on, made against or incurred by the Chargee
            arising from or relating to, directly or indirectly, and whether or
            not disclosed by the Environmental Audit and whether or not caused
            by the Chargor or within its control, (i) any actual or alleged
            breach of Environmental Laws relating to or affecting the Property,
            (ii) the actual or alleged presence, release, discharge or
            disposition of any Hazardous Substance in, on, over, under, from or
            affecting all or part of the Property or surrounding lands,
            including any personal injury or property damage arising therefrom,
            (iii) any actual or threatened Environmental Proceeding affecting
            the Property including any settlement thereof, (iv) any assessment,
            investigation, containment, monitoring, remediation and/or removal
            of all Hazardous Substances from all or part of the Property or
            surrounding areas or otherwise complying with Environmental Laws, or
            (v) any breach by the Chargor of any covenant hereunder or under any
            document collateral hereto or under Applicable Law relating to
            environmental matters. This indemnity shall survive repayment of the
            Charge, foreclosure upon this Charge and any other extinguishing of
            the obligations of the Chargor and Covenantor under this Charge and
            any other exercise by the Chargee of any remedies available to it
            against the Chargor.

22.   SEPARATE BANK ACCOUNT
<PAGE>

                                                                               9

      In the event of a default under the Charge, or if the Chargor seeks
      protection under the Companies Creditors Arrangement Act (Canada) or the
      Bankruptcy and Insolvency Act (Canada), or any other legislation relating
      to insolvent debtors, the Chargor shall establish a separate project bank
      account for the Property into which all revenue from the Properly shall be
      deposited and from which all operating expenses in respect of the Property
      shall be paid.

23.   CONSTRUCTION LIENS

      At the time of any advance there shall have been full and complete
      compliance with all requirements of the Construction Lien Act (Ontario),
      as amended and restated from time to time, and the Chargor shall submit to
      the Chargee, in form and content satisfactory to the Chargee, evidence of
      such compliance. The Chargor agrees that the Chargee shall be entitled to
      withhold from any advance, or pay into court as an advance, such amounts
      as the Chargee, in its sole discretion, considers advisable to protect its
      interests from subordination under the provisions of the said Act, and to
      secure the priority of this Charge over any actual or potential
      construction liens. Nothing in this paragraph shall be construed to make
      the Chargee an "Owner" or "Payer" within the definitions of those terms
      contained in the said Act, nor shall there be, or be deemed to be, any
      obligation by the Chargor to retain any holdback or otherwise or to
      maintain on the Charger's behalf any holdback which may be required to be
      made by the "Owner" or "Payer". Any such obligation shall remain solely
      the Chargor's obligation. The Chargor hereby covenants and agrees to
      comply in all respects with the provisions of the said Act.

      The Chargor further covenants and agrees that all improvements made to the
      Property shall comply in all respects with the provisions of the said Act
      and if a construction lien is filed against all or part of the Property,
      then the Chargor shall within twenty (20) days after receipt of notice
      thereof have the lien vacated or discharged. If the Chargor fails to do
      so, then, at the option of the Chargee, the Principal Amount together with
      accrued Interest secured hereby shall forthwith become due and payable or
      the Chargee shall be entitled to pay into court a sum sufficient to obtain
      an order vacating such lien or to purchase a financial guarantee bond in
      the form prescribed under the said Act. All costs, charges and expenses
      incurred by the Chargee in connection with such payment into court or in
      connection with the purchase of a financial guarantee bond shall be deemed
      to be Costs and added to the Principal Amount and shall be a charge on the
      Property and shall bear interest at the Interest Rate, and shall be
      payable forthwith by the Chargor to the Chargee. If any person that
      performs work, labour or services or that provides materials to or for the
      Property, names the Chargee as a party to any legal proceedings then the
      Chargor agrees to reimburse the Chargee for any and all legal expenses (on
      a substantial indemnity basis) incurred by the Chargee in such legal
      proceedings.

      The Chargor shall provide such additional security, information,
      documentation and assurances as may be required from time to time by the
      Chargee during the currency of this Charge to determine and to establish
      and preserve, in all respects, the priority of this Charge and all
      advances made hereunder over any rights of lien claimants pursuant to the
      provisions of the said Act. It is further agreed that the Chargee shall
      not become a mortgagee in possession by reason only of exercising any of
      the rights given to it under this paragraph or in making any payment to
      preserve, protect or secure the Property.

24.   EXPROPRIATION

      In the event the whole or any part of the Property is expropriated, the
      Chargor agrees all proceeds received from any such expropriation shall be
      paid directly to the Chargee provided that upon the payment of all amounts
      secured by this Charge, the Chargee shall have no further claim to any
      such proceeds.

25.   ADDITIONAL SECURITY

      The Chargor acknowledges a General Assignment of Rents and General
      Security Agreement (collectively the "Additional Security") are or may be
      given as further security to this Charge, which Additional Security is
      being granted by the Chargor to the Chargee and any default under the
      Additional Security shall constitute default under this Charge and any
      default under this Charge shall constitute default under the Additional
      Security and at the option of the Chargee require the entire principal
      secured under this Charge; together with all accrued and unpaid interest
      to become due and payable. Payment under the Additional Security shall

<PAGE>

                                                                              10

      constitute payment under this Charge and payment on account of this Charge
      shall constitute payment under the Additional Security.

      It is agreed the Chargee's rights hereunder shall in no way merge or be
      affected by any proceedings the Chargee may take under the Additional
      Security and the Chargee shall not be required to take proceedings under
      such Additional Security or any part thereof before proceeding under this
      Charge, and conversely, no proceedings under this Charge shall in any way
      affect the rights of the Chargee under such Additional Security and the
      Chargee shall not be required to take proceedings under this Charge before
      proceeding under the Additional Security or any part thereof.

26.   UNDERTAKINGS

      In the event the Chargor defaults with respect to any undertakings
      delivered to the Chargee in consideration of the advance of funds under
      this Charge or with respect to any covenant contained in the terms and
      provisions contained in this Charge or the Additional Security, such
      default will be an event of default under this Charge.

27.   RECEIVERSHIP & DEFAULT

      At the option of the Chargee, it shall constitute a default hereunder if
      the Chargor or the Covenantor shall become insolvent or be the subject of
      any bankruptcy, arrangement with creditors, proposal, amalgamation or any
      transaction or series of transactions which results in a change in control
      of the Chargor or Covenantor, re-organization, or any liquidation,
      winding-up, dissolution, or receivership or without the Chargee's consent,
      seeks continuation under the laws of any other jurisdiction. In the event
      of a default under this Charge, or if the Chargor or Covenantor seek
      relief under The Companies' Creditors Arrangement Act (Ontario) or other
      debtor relief legislation, the Chargor will, if requested by the Chargee
      establish a separate project bank account for the Property.

      Provided and without in any way limiting anything herein contained, in the
      event that:

      (a)   The Chargor makes default in the payment of any principal or
            Interest or any other monies required to be paid by the Chargor
            hereunder;

      (b)   The Chargor fails to observe or perform any other covenant or
            agreement herein contained;

      (c)   Any material representation or warranty made herein or in the
            Commitment Letter by the Chargor or any covenantor is at any time
            while this Charge is outstanding not true;

      (d)   Any construction lien is registered against any part of the Property
            and is not removed within twenty (20) days;

      (e)   An order is made or a resolution passed for the winding up of the
            Chargor, or if a petition is filed for the winding up of the
            Chargor;

      (f)   The Chargor becomes insolvent or makes an unauthorized assignment or
            bulk sale of the Chargor's assets or if a bankruptcy petition is
            filed or presented against the Chargor;

      (g)   Any proceedings with respect to the Chargor are commenced under The
            Companies' Creditors Arrangement Act (Ontario);

      (h)   An execution, sequestration, extent or any other process of any
            court becomes enforceable against the Chargor or if a distress or
            analogous process is levied upon the Property or any part thereof,
            provided such execution, sequestration, extent, process of court,
            distress or analogous process is not in good faith being disputed by
            the Chargor;

      (i)   The Chargor shall permit any sum which has been admitted as due by
            the Chargor or is not disputed to be due by the Chargor and which
            forms, or is capable of being made, a charge upon any of the
            Property in priority to or ranking equally with the charge of this
            Charge to be or remain unpaid;

<PAGE>

                                                                              11

      (j)   The Chargor does not comply with or complete any written undertaken
            delivered to the Chargee with respect to this Charge or any matter
            provided for in the Commitment Letter.

      (k)   Any charge or encumbrance created or issued by the Chargor having
            the nature of a fixed and/or floating charge shall become
            enforceable, whether ranking in priority to, or pari passu with this
            Charge; or,

      (l)   The Chargor ceases to carry on its business or if the Chargor
            commits any act of bankruptcy;

      then, and in any such event, this Charge shall, at the option of the
      Chargee, be deemed to be in default.

      Provided that, and notwithstanding anything herein contained, it is agreed
      that at any time and from time to time when this Charge shall be in
      default, and whether or not the principal has been accelerated, the
      Chargee may, with or without entry into possession of the Property or any
      part thereof, and whether or not there has been such entry, by writing
      under its hand or at its option by application to a court of competent
      jurisdiction, for and during the period of such default, appoint a
      Receiver of the Property or any part thereof and of the rents and profits
      thereof, or of only the rents and profits thereof, and with or without
      security, and may from time to time by similar writing remove any Receiver
      and appoint another and that, in making any such appointment or removal,
      the Chargee shall be deemed to be acting as the agent or attorney for the
      Chargor. Upon the appointment of a receiver, the following provisions
      shall apply:

      (a)   A statutory declaration of the Chargee as to default under this
            Charge shall be conclusive evidence thereof for the purpose of the
            appointment of such Receiver;

      (b)   Every such Receiver shall be the agent or attorney of the Chargor,
            whose appointment is irrevocable by the Chargor, for the collection
            of all rents or other money receivable in respect of the Property or
            any part thereof, and the Chargor covenants and agrees to co-operate
            with and assist the receiver and execute such documentation as the
            receiver shall reasonably require, in order to effect the aforesaid
            purposes;

      (c)   The Chargee may from time to time in writing fix the remuneration of
            the Receiver;

      (d)   The Receiver shall so far as concerns responsibility for the
            Receiver's acts or omissions be deemed the agent or attorney of the
            Chargor and in no event the agent of the Chargee;

      (e)   The appointment of the Receiver by the Chargee shall not incur or
            create any liability on the part of the Chargee to the Receiver in
            any respect, and such appointment or anything which may be done by
            the Receiver or the removal of the Receiver or the termination of
            the receivership shall not have the effect of constituting the
            Chargee a mortgagee in possession in respect of the Property or any
            part thereof;

      (f)   The Receiver shall have power to exercise any of the powers or
            discretions of the Chargee hereunder, and may rent or license for
            use any part of the Property which may become vacant for such term
            and subject to such provisions as the Receiver may deem advisable or
            expedient, and in doing so the Receiver shall act as the attorney or
            agent of the Chargor and shall have the authority to execute under
            seal any lease in the name of and on behalf of the Chargor, and the
            Chargor undertakes to ratify and confirm whatever the Receiver may
            do in connection with the Property;

      (g)   The Receiver shall have power to construct or complete any
            unfinished construction upon the Property so that the Property and
            the buildings thereon so completed shall be a complete structure;

      (h)   The Receiver shall have power to manage, operate, amend, repair,
            alter or extend the Property or any part thereof as it deems
            expedient in the name of the Chargor and to carry on or concur in
            carrying on all or any part of the business of the Chargor;

<PAGE>

                                                                              12

      (i)   The Receiver may borrow or raise money on the security of all or any
            part of the Property in priority to or ranking equal with or
            subordinate to the charge of this Charge for such purpose as may be
            approved by the Chargee;

      (j)   The Receiver shall not be liable to the Chargor to account for money
            or damages other than the money actually received by the Receiver in
            respect of the Property or any part thereof, and out of such money
            so received the Receiver shall, subject to other written directions
            from the Chargee, pay or make reasonable reserves for payment in the
            following order:

            (i)   the Receiver's remuneration and disbursements;

            (ii)  all obligations incurred by the Receiver in connection with
                  the management, including leasing and licensing, operation,
                  amendment, repair, alteration or extension of the Property or
                  any part thereof, and in borrowing or raising money on the
                  security of the Property, or any part thereof;

            (iii) interest, principal and other money which may from time to
                  time be or become charged upon the mortgaged lands and
                  premises in priority to this Charge, and all taxes, insurance
                  premiums and every other proper expenditure made or incurred
                  by the Receiver in respect of the Property or any part
                  thereof;

            (iv)  to the Chargee all amounts due under this Charge and to the
                  extent elected by the Chargee, amounts to become due hereunder
                  for no more than two (2) months;

            (v)   and thereafter any surplus remaining in the hands of the
                  Receiver shall be payable to the Chargor.

      (k)   The Chargee may at any time and from time to time terminate any such
            receivership by notice in writing under its hand to the Chargor and
            to the Receiver; and

      (l)   Save as to surplus money payable to the Chargor, the Chargor
            releases and discharges die Chargee and the Receiver from every
            claim of every nature, whether in damages or otherwise, arising by
            reason of anything done by the Chargee or the Receiver under the
            provisions of this section, unless such claim be the direct and
            proximate result of dishonesty or gross neglect.

28.   CURE PERIOD

      Notwithstanding anything contained in this Charge or the Additional
      Security, the Chargee confirms and acknowledges to the Chargor that in the
      event of a default under any of the covenants or obligations of the
      Chargor in this Charge or the Additional Security, prior to the Chargee
      exercising any of its rights and remedies herein or under the Additional
      Security or as provided at law, it shall provide the Chargor with written
      notice of such default and the opportunity to cure such default in the
      timeframe provided below prior to exercising any rights and remedies
      herein:

      (i)   In the case of a monetary default, five (5) days from receipt of
            written notice by the Chargor of the monetary default; and

      (ii)  In the event of a non-monetary default, twenty (20) days from
            receipt of written notice by the Chargor of the non-monetary default

29.   NOTICE

      Any notice, direction or other instrument required or permitted to be
      given under the provisions of this Charge shall be in writing and may be
      given by delivering same or mailing same or sending same by telegram,
      telex, telecommunication, facsimile or other similar form of
      communication, in each case addressed to the Chargee at the address for
      service indicated under the heading "Chargee" on page of 1 of this Charge
      to which this Schedule is attached, and to the Chargor and covenantor, if
      applicable, at the address for service indicated under the heading
      "Chargor" on page of 1 of this Charge to which this Schedule is attached.
      Any notice, direction or instrument aforesaid, shall if delivered, be
      deemed to have been given or

<PAGE>

                                                                              13

      made on the date it was so delivered; if sent by prepaid registered mail,
      be deemed to have been given or made the fifth day following the day on
      which it was so mailed; and if sent by telegram, telex, telecommunication,
      facsimile or other similar form of communication, be deemed to have been
      given or made on the day it was so sent. Any party may give written notice
      of change of address in the same manner, in which event any such notice
      shall thereafter be given to it as above provided at such changed address.
      In the event of interruption, for any reason, in one or more of the forms
      of communications listed above, the parties shall use a form which is not
      so interrupted with the intent that the form of communication used will
      give the addressee timely notice of the communication.

30.   VALIDITY OF PROVISIONS

      If any provision of this Charge is held to any extent invalid or
      unenforceable, the remainder of this Charge shall not be affected and
      shall remain valid and enforceable.

31.   TIME OF THE ESSENCE

      Time shall be of the essence in all matters relating to this Charge.

32.   INTERPRETATION AND HEADINGS

      Wherever in this Charge the singular or masculine is used, the same shall
      be construed as meaning the plural or the feminine or the neuter where the
      context or the parties hereto so require. The headings do not form part of
      this Charge and have been inserted for convenience of reference only.

33.   MISCELLANEOUS PROVISIONS

      In the event of any discrepancy between the provisions contained in this
      Schedule and the provisions contained in Standard Charge Terms No. 200033,
      the provisions of this Schedule shall prevail.

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