Document:

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                                                                    EXHIBIT 10.2

                                    GUARANTEE

TO:   LASALLE BUSINESS CREDIT, A DIVISION OF ABN AMRO BANK N.V., CANADA BRANCH,
      AS LENDER

      under the Loan Agreement (as such term is hereinafter defined).

1.    For valuable consideration, the undersigned and each of them (if more than
      one) hereby jointly and severally unconditionally guarantees and promises
      to pay to LASALLE BUSINESS CREDIT, A DIVISION OF ABN AMRO BANK N.V.,
      CANADA BRANCH, as lender (the "Lender"), the full and prompt payment when
      due (whether at stated maturity, by required prepayment, declaration,
      acceleration, demand or otherwise) and performance of all indebtedness,
      liabilities and other obligations of Steelbank Inc., as borrower (the
      "Borrower"), party to the Loan Agreement dated as of the date hereof by
      and among the Borrower and the Lender, as the same may be amended,
      supplemented, revised, restated or replaced from time to time (the "Loan
      Agreement"), whether arising out of or in connection with this Guarantee,
      any Other Agreements or otherwise, including all unpaid principal of the
      Loans, all Letters of Credit, all interest accrued thereon, all unpaid
      Hedging Liabilities, all fees due under the Loan Agreement and all other
      amounts payable by the Borrower to any undersigned person thereunder or in
      connection therewith and any and all attorneys' fees, court costs, and
      collection charges incurred in endeavouring to collect or enforce any of
      the foregoing against the Borrower, the undersigned, or any other person
      liable thereon (whether or not suit be brought). The terms "indebtedness,"
      "liabilities" and "obligations" are used herein in their most
      comprehensive sense and include any and all advances, debts, obligations
      and liabilities, now existing or hereafter arising, whether voluntary or
      involuntary and whether due or not due, absolute or contingent, liquidated
      or unliquidated, determined or undetermined, and whether recovery upon
      such indebtedness, liabilities and obligations may be or hereafter become
      unenforceable or shall be an allowed or disallowed claim under applicable
      law, or whether recovery of such indebtedness may be or hereafter become
      barred by any statute of limitations.

      Capitalized terms not otherwise defined herein shall have the meaning
      ascribed to them in the Loan Agreement.

2.    The liability of the undersigned under this Guarantee shall be unlimited.
      Regardless of whether or not any proposed guarantor or any other person or
      persons has or have executed or shall execute this Guarantee or is or are
      or shall become in any other way responsible to the Lender for the
      indebtedness or any part thereof whether under this Guarantee or otherwise
      shall cease to be so liable, this shall be a continuing Guarantee relating
      to any indebtedness, including that arising under successive transactions
      which shall either continue the indebtedness or from time to time renew it
      after it has been satisfied and shall secure the ultimate repayment of all
      monies owing from the Borrower to the Lender and shall be binding as a
      continuing security on the undersigned. Notwithstanding the discontinuance
      of this Guarantee by any other person or persons that shall execute this
      Guarantee or is or are or shall become in any other way responsible to the
      Lender for the indebtedness or any part thereof whether under this
      Guarantee or otherwise, it shall remain continuing as to the other or
      others and the undersigned, and

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      this Guarantee shall, as to the other or others and the undersigned,
      remain in force and cover all indebtedness of the Borrower inclusive of
      those incurred or arising down to the expiration of three (3) months after
      notice of discontinuance thereof shall be given in accordance with
      paragraph 10 hereof. Any payment by the undersigned shall not reduce the
      maximum obligation of the undersigned hereunder.

3.    The obligations hereunder are joint and several, and independent of the
      obligations of the Borrower, and a separate action or actions may be
      brought and prosecuted against the undersigned whether action is brought
      against the Borrower or whether the Borrower be joined in any such action
      or actions; and the undersigned waive(s) the benefit of any statute of
      limitations affecting its/their liability hereunder.

4.    The undersigned authorizes the Lender, without notice or demand and
      without affecting its/their liability hereunder, from time to time, either
      before or after revocation hereof, to:

      (a)   renew, compromise, extend, accelerate or otherwise change the time
            for payment of, or otherwise change the terms of the indebtedness or
            any part thereof, including increase or decrease of the rate of
            interest thereon;

      (b)   accept partial payments on the indebtedness;

      (c)   receive and hold security for the payment of this Guarantee or the
            indebtedness guaranteed, and exchange, enforce, waive, release, fail
            to perfect, sell upon the occurrence and during the continuance of
            an Event of Default, or otherwise dispose of upon the occurrence and
            during the continuance of an Event of Default any such security;

      (d)   settle, release, compromise, collect or otherwise liquidate the
            indebtedness and any security or collateral therefore in any manner;

      (e)   apply such security and direct the order or manner of sale thereof
            as the Lender in its discretion may determine; and

      (f)   release or substitute any guarantors.

5.    The undersigned hereby agrees that, except as hereinafter provided, its
      obligations under this Guarantee shall be unconditional, irrespective of
      (i) the validity or enforceability of the indebtedness or any part
      thereof, or of any promissory note or other document evidencing all or any
      part of the indebtedness, (ii) the absence of any attempt to collect the
      indebtedness from the Borrower or any other guarantor or other action to
      enforce the same, (iii) the waiver or consent by the Lender with respect
      to any provision of any instrument evidencing the indebtedness, or any
      part thereof, or any other agreement heretofore, now or hereafter executed
      by the Borrower and delivered to the Lender, (iv) failure by the Lender to
      take any steps to perfect and maintain its security interest in, or to
      preserve its rights to, any security or collateral for the indebtedness,
      (v) the institution of any proceeding under Chapter 11 of Title 11 of the
      United States Code (11 U.S.C.ss.101 et seq.), as amended (the "Bankruptcy
      Code"), or any similar proceeding, by or against the Borrower, or the
      Lender's election in any such proceeding of the application of Section
      1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a
      security

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      interest by the Borrower as debtor-in-possession, under Section 364 of the
      Bankruptcy Code, (vii) the disallowance, under Section 502 of the
      Bankruptcy Code, of all or any portion of the Lender's claim(s) for
      repayment of the indebtedness, or (viii) any other circumstance which
      might otherwise constitute a legal or equitable discharge or defense of a
      guarantor.

      The Lender shall have the exclusive right to determine the time and manner
      of application of any payments or credits, whether received from the
      Borrower or any other source, and such determination shall be binding on
      the undersigned, absent manifest error. All such payments and credits may
      be applied, reversed and reapplied, in whole or in part, to any of the
      indebtedness as the Lender shall determine in its sole discretion without
      affecting the validity or enforceability of this Guarantee.

6.    The undersigned waives any right to require the Lender to:

      (a)   proceed against the Borrower or any other person;

      (b)   proceed against or exhaust any security held from the Borrower or
            any other person; or

      (c)   pursue any other remedy in the Lender's power whatsoever.

      The undersigned waives any defense arising by reason of any disability or
      other defense of the Borrower, or the cessation from any cause whatsoever
      of the liability of the Borrower, or any claim that the undersigned's
      obligations exceed or are more burdensome than those of the Borrower, the
      undersigned waives, until all the indebtedness and the Liabilities shall
      be satisfied in full, any right of subrogation, reimbursement,
      indemnification, and contribution (contractual, statutory or otherwise),
      arising from the existence or performance of this Guarantee and,
      notwithstanding the foregoing, the undersigned waives, forever, any right
      to enforce any remedy which the Lender now has or may hereafter have
      against the Borrower in connection with the Liabilities, and waive(s) any
      benefit of, and any right to participate in, any security now or hereafter
      held by the Lender. The Lender may foreclose, either by judicial
      foreclosure or by exercise of power of sale, or realize any deed of trust
      or other security securing the indebtedness, and, even though the
      foreclosure or other realization may destroy or diminish the undersigned's
      rights against the Borrower or may result in security being sold at an
      under value, the undersigned shall be liable to the Lender for any part of
      the indebtedness remaining unpaid after the foreclosure or other
      realization. The undersigned waives all diligence, presentments, demands
      for performance, notices of nonperformance, protests, notices of protest,
      notices of dishonour, filing of claims in the event of receivership or
      bankruptcy of the Borrower, and notices of acceptance of this Guarantee
      and of the existence, creation, or incurring of new or additional
      indebtedness.

7.    The undersigned acknowledges and agrees that it shall have the sole
      responsibility for obtaining from the Borrower such information concerning
      the Borrower's financial conditions or business operations as the
      undersigned may require, and that the Lender does not have any duty at any
      time to disclose to the undersigned any information relating to the
      business operations or financial conditions of the Borrower.

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8.    To secure all of the undersigned's obligations hereunder, the undersigned
      assigns and grants to the Lender a security interest in all now owned or
      hereafter acquired moneys, securities and other property of the
      undersigned now or hereafter in the possession of the Lender, and all
      deposit accounts of the undersigned maintained with the Lender (or
      otherwise), and all proceeds thereof. Upon default or breach of the
      undersigned's obligations to the Lender, the Lender may apply any deposit
      account to reduce the indebtedness, and may realize upon any collateral as
      provided by law and in any security agreements between the Lender and the
      undersigned.

9.    Until all the indebtedness shall be satisfied in full and the Liabilities
      shall be terminated, any obligations of the Borrower to the undersigned,
      now or hereafter existing, including but not limited to any obligations to
      the undersigned as subrogee of the Lender or resulting from the
      undersigned's performance under this Guarantee, are hereby assigned to the
      Lender and postponed and subordinated to the indebtedness. Any such
      obligations of the Borrower to the undersigned received by the undersigned
      shall be received in trust for the Lender and the proceeds thereof shall
      forthwith be paid over to the Lender on account of the indebtedness of the
      Borrower to the Lender, but without reducing or affecting in any manner
      the liability of the undersigned under the provisions of this Guarantee.
      This assignment and postponement is independent of and severable from this
      Guarantee and shall remain in full force and effect whether or not the
      undersigned is liable for any amount under this Guarantee. Notwithstanding
      anything contained herein, the Lender and the undersigned are parties to a
      subordination agreement in respect of the Borrower, and any conflict
      between this Guarantee and such subordination agreement shall be resolved
      in favour of the subordination agreement.

10.   This Guarantee may be revoked at any time by the undersigned in respect to
      future transactions, unless there is a continuing consideration as to such
      transactions which the undersigned does not renounce. Such revocation
      shall be effective upon the expiration of three (3) months after actual
      receipt by the Lender at Suite 1500, Maritime Life Tower, 79 Wellington
      St. West, Toronto, Ontario M5K 1G8, Attention: Aaron Turner: URGENT (or
      such address as the Lender may communicate to the Guarantor) of written
      notice of revocation. Revocation shall not affect the undersigned's
      obligations or the Lender's rights with respect to transactions which
      precede the expiration of the three (3) month period following the
      Lender's receipt of such notice, regardless of whether or not the
      indebtedness related to such transactions, before or after revocation, has
      been renewed, compromised, extended, accelerated, or otherwise changed as
      to any of its terms, including time for payment or increase or decrease of
      the rate of interest thereon, and regardless of any other act or omission
      of the Lender authorized hereunder. If this Guarantee is revoked, returned
      or cancelled, and subsequently any previous payment or transfer of any
      interest in property by the Borrower to the Lender are rescinded or must
      be returned by the Lender to the Borrower, this Guarantee shall be
      reinstated with respect to any such payment or transfer, regardless of any
      such prior revocation, return, or cancellation.

11.   Where the Borrower becomes bankrupt or makes an assignment for the benefit
      of creditors or if any circumstances arise necessitating the Lender to
      file a claim against the Borrower and/or to value its securities, the
      Lender shall be entitled to place such valuation on its securities as the
      Lender may in its absolute discretion see fit and the

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      filing of such claim and the valuing of securities shall not in any way
      prejudice or restrict the claim of the Lender against the undersigned and
      in no way discharges the undersigned or from its liability hereunder to
      the Lender, either in whole or in part and until all indebtedness of the
      Borrower to the Lender has been fully paid, the Lender shall have the
      right to include in its claim the amount of all sums paid by any of the
      undersigned to the Lender under this Guarantee and to prove and rank for
      and receive dividends in respect of such claim, any and all rights to
      prove and rank for such sums paid for by the undersigned and receive the
      full amount of all dividends in respect thereto are hereby assigned and
      transferred to the Lender by the undersigned.

12.   The undersigned shall make payment to the Lender of the amount of its
      liability to the Lender to the extent then due, forthwith after demand
      therefor is made in writing and such demand shall be deemed to have been
      effectually made (a) upon personal delivery thereof, including, but not
      limited to, delivery by overnight mail courier service, (b) four (4) days
      after it shall have been mailed by Canada Post mail, first class,
      certified or registered, with postage prepaid, or (c) in the case of
      notice by facsimile transmission, when properly transmitted, in each case
      addressed to the party to be notified as follows:

                  If to the Lender:

                  Lasalle Business Credit, A Division of ABN AMRO Bank N.V.,
                  Canada Branch
                  Suite 1500, Maritime Life Tower
                  79 Wellington St. West,
                  Toronto, ON  M5K 1G8

                  Attention:        Mr. Aaron Turner
                  Fax:              (416) 367-7943

                  If to any undersigned person:

                  Tarpon Industries, Inc.
                  2420 Wills Street
                  Maryville, MI  48048

                  Attention: Jim House, Senior Vice President and Chief
                  Financial Officer
                  Fax: (810) 364-4347

            or to such other address as each party may designate for itself by
            like notice. Failure or delay in delivering copies of any notice,
            demand, request, consent, approval, declaration or other
            communication to the persons designated above to receive copies
            shall not adversely affect the effectiveness of such notice, demand,
            request, consent, approval, declaration or other communication.

13.   In paragraphs 13 to 16, the following terms shall have the following
      meanings:

      (a)   "Excluded Taxes" means taxes, levies, imposts, deductions, charges
            or withholdings, including interest, penalties or additions thereto,
            and all related liabilities, imposed on or measured by net income or
            net profits of the Lender,

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            capital taxes or franchise taxes imposed pursuant to the laws of
            Canada or by the jurisdiction under the laws of which the Lender is
            organized, in which the Lender is resident for tax purposes or in
            which the principal office or applicable lending office of the
            Lender is located or in which it is otherwise deemed to be engaged
            in a trade or business for tax purposes or any subdivision thereof
            or therein, and any branch profits taxes or any similar tax imposed
            by any jurisdiction on the Lender;

      (b)   "Governmental Authority" means any nation or government, any state,
            province, municipality, region or other political subdivision
            thereof, any central bank (or similar monetary or regulatory
            authority) thereof, any entity exercising executive, legislative,
            judicial, regulatory, or administrative functions of or pertaining
            to government, any corporation or other entity owned or controlled,
            through stock or capital ownership or otherwise, by any of the
            foregoing and any department, agency, board, commission, tribunal,
            committee or instrumentality of any of the foregoing;

      (c)   "Indemnified Taxes" means all Taxes other than Excluded Taxes;

      (d)   "Other Taxes" means any present or future transfer, mortgage, stamp
            or documentary taxes or any other excise or property taxes, charges,
            financial institutions duties, debits taxes or similar levies
            imposed by Canada, or any province or territory thereof, the United
            States or any other jurisdiction that arise from any payment under
            this Guarantee or from the execution, delivery, enforcement or
            registration of, or otherwise with respect to, the Guarantee;

      (e)   "Tax" or "Taxes" means any and all current or future taxes, levies,
            imposts, duties, deductions, charges or withholdings imposed by any
            Governmental Authority.

14.   Gross-Up for Withholding Tax. All payments to the Lender (or any successor
      or assignee thereof) by the undersigned under this Guarantee shall be made
      free and clear of and without deduction or withholding for any and all
      Indemnified Taxes, unless required by law. If the undersigned shall be
      required by law or the interpretation thereof by the relevant Governmental
      Authority to deduct or withhold any such Indemnified Taxes from or in
      respect of any sum payable under this Guarantee, (i) the amount payable
      shall be increased by such additional amount as may be necessary so that
      after making all required deductions or withholdings (including, without
      limitation, deductions or withholdings applicable to additional amounts
      paid under this paragraph 13), the Lender receives a net amount equal to
      the full amount it would have received if no deduction or withholding had
      been made; (ii) the undersigned shall make such required deductions or
      withholdings; (iii) the undersigned shall immediately pay the full amount
      deducted or withheld to the relevant Governmental Authority in accordance
      with applicable law; and (iv) the undersigned shall deliver to the Lender,
      as soon as practicable after it has made such payment to the applicable
      Governmental Authority (x) a copy of any receipt issued by such
      Governmental Authority evidencing the payment of all amounts required to
      be deducted or withheld from the sum payable hereunder or (y) if such a
      receipt is not available from such Governmental Authority, notice of the
      payment of such amount deducted or withheld.

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15.   Other Taxes. The undersigned agrees to immediately pay any and all Other
      Taxes which arise from any payment made by the undersigned under this
      Guarantee or the execution, delivery or registration of, or otherwise,
      with respect to this Guarantee.

16.   Indemnity. The undersigned shall indemnify and hold harmless the Lender
      for the full amount of Indemnified Taxes or Other Taxes imposed on or paid
      by the Lender and any liability (including penalties, interest and
      expenses payable or incurred in connection therewith) arising from or with
      respect to such Indemnified Taxes or Other Taxes, whether or not they were
      correctly or legally asserted. In addition, the undersigned shall
      indemnify the Lender for any Taxes (including Excluded Taxes) imposed by
      any jurisdiction on or with respect to any increased amount payable by the
      undersigned under paragraph 13 or paragraph 16 or any payment by the
      undersigned under paragraph 14 or this paragraph 15. Payment under this
      indemnification shall be made within 30 days from the date the Lender
      makes written demand for it, and the amounts have been fully and finally
      settled. A certificate containing reasonable detail as to the amount of
      such Taxes submitted to the undersigned by the Lender shall be conclusive
      evidence, absent manifest error, of the amount due from the undersigned to
      the Lender.

      The undersigned shall furnish to the Lender the original or a certified
      copy of a receipt, if available, or other reasonably acceptable document
      to the Lender evidencing payment of Taxes made by it within 30 days after
      the date of any such payment..

17.   Authorized Foreign Banks. In addition to the provisions of paragraph 13
      hereof, in the event that the undersigned is or becomes a resident of
      Canada for purposes of the Income Tax Act (Canada) (the "ITA"), then in
      respect of amounts paid or credited by the undersigned to or for the
      benefit of a particular lender that is an "authorized foreign bank" for
      purposes of the ITA, the obligations under this paragraph 16 to pay an
      additional amount shall apply where the particular lender is liable for
      Tax under Part XIII of the ITA in respect of such payment, even if the
      undersigned is not required under the ITA to deduct or withhold an amount
      in respect of Taxes on such payment and paragraph 13 hereof shall apply,
      mutatis mutandis, as if the undersigned was required to withhold an amount
      in respect of such Taxes. The notification provisions of paragraph 11
      hereof shall apply when the relevant person becomes aware of the liability
      of the Lender for tax under Part XIII of the ITA.

18.   Survival. Without prejudice to the survival of any other agreement
      contained herein, the agreements and obligations contained in paragraphs
      13 to 16 shall survive the payment in full of principal, interest, fees
      and any other amounts payable hereunder and the termination of this
      Guarantee.

19.   If any provision of this Guarantee is determined in any proceeding in a
      court of competent jurisdiction to be void or to be wholly or partly
      unenforceable, that provision shall for the purposes of such proceeding,
      be severed from this Guarantee at the Lender's option and shall be treated
      as not forming a part hereof and all the remaining provisions of this
      Guarantee shall remain in full force and be unaffected thereby.

20.   The undersigned consents and agrees that the Lender shall be under no
      obligation to marshal any assets in favor of the undersigned or against or
      in payment of any or all of the indebtedness. The undersigned further
      agrees that, to the extent that the undersigned

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      makes a payment or payments to the Lender, or the Lender receives any
      proceeds of collateral, which payment or payments or any part thereof are
      subsequently invalidated, declared to be fraudulent or preferential, set
      aside and/or required to be repaid to undersigned, its estate, trustee,
      receiver or any other party, including, without limitation, the
      undersigned, under any bankruptcy law, state or federal law, common law or
      equitable theory, then to the extent of such payment or repayment, the
      indebtedness or the part thereof which has been paid, reduced or satisfied
      by such amount and the undersigned's obligations hereunder with respect to
      such portion of the indebtedness, shall be reinstated and continued in
      full force and effect as of the date such initial payment, reduction or
      satisfaction occurred.

21.   Notwithstanding any contrary provision of this Guarantee, it is intended
      that neither this Guarantee nor any liens or security interests securing
      this Guarantee constitute a Fraudulent Conveyance (as defined below).
      Consequently, the undersigned agrees that if this Guarantee or any liens
      or security interests securing this Guarantee would, but for the
      application of this sentence, constitute a Fraudulent Conveyance, this
      Guarantee and each such lien and security interest shall be valid and
      enforceable only to the maximum extent that would not cause this Guarantee
      or such lien or security interest to constitute a Fraudulent Conveyance,
      and this Guarantee shall automatically, if permitted under applicable law,
      be deemed to have been amended accordingly at all relevant times. For
      purposes hereof, a "Fraudulent Conveyance" means a fraudulent conveyance
      under Section 548 of the Bankruptcy Code or a fraudulent conveyance or
      fraudulent transfer under any applicable fraudulent conveyance or
      fraudulent transfer law or similar law of any state or other governmental
      unit as in effect from time to time.

22.   This Guarantee shall not be subject to or affected by any promise or
      condition affecting or limiting the liability of the undersigned except as
      expressly set forth herein and no statement, representation, agreement or
      promise on the part of the Lender or any officer, employee or agent
      thereof, unless contained herein, forms any part of this contract or has
      induced the making thereof or shall be deemed in any way to affect the
      liability of the undersigned hereunder.

23.   There are no representations, collateral agreements or conditions with
      respect to this Guarantee and agreement affecting the liability of the
      undersigned hereunder other than contained herein.

24.   This Guarantee and agreement shall extend to and enure to the benefit of
      the Lender and its successors and assigns, and shall extend to and be
      binding upon the undersigned and its or their respective successors and
      permitted assigns.

25.   It is not necessary for the Lender to inquire into the powers of the
      Borrower or the undersigned or of the officers, directors, partners, or
      agents acting or purporting to act on their behalf, and any indebtedness
      made or created in reliance upon the professed exercise of such powers
      shall be guaranteed hereunder.

26.   The Lender may, without notice to the undersigned and without affecting
      the undersigned's obligations hereunder, assign the indebtedness and this
      Guarantee, in whole or in part. Subject to the confidentiality provisions
      in Section 20(i) of the Loan Agreement, the undersigned agrees that the
      Lender may disclose to any assignee or

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      purchaser, or any prospective assignee or purchaser, of all or part of the
      indebtedness any and all information in the Lender's possession concerning
      the undersigned, this Guarantee, and any security for this Guarantee.

27.   If for the purpose of obtaining judgment in any court or for the purpose
      of determining, pursuant to the obligations of the undersigned, the
      amounts owing hereunder, it is necessary to convert an amount due
      hereunder in the currency in which it is due (the "Original Currency")
      into another currency (the "Second Currency"), the rate of exchange
      applied shall be that at which, in accordance with normal banking
      procedures, the Lender could purchase, in the Toronto foreign exchange
      market, the Original Currency with the Second Currency on the date two (2)
      Business Days preceding that on which judgment is given or any other
      payment is due hereunder. The undersigned agrees that its obligation in
      respect of any Original Currency due from it to the Lender hereunder
      shall, notwithstanding any judgment or payment in such other currency, be
      discharged only to the extent that, on the Business Day following the date
      the Lender receives payment of any sum so adjudged or owing to be due
      hereunder in the Second Currency the Lender may, in accordance with normal
      banking procedures, purchase, in the Toronto foreign exchange market the
      Original Currency with the amount of the Second Currency so paid; and if
      the amount of the Original Currency so purchased or could have been so
      purchased is less than the amount originally due in the Original Currency,
      the undersigned agrees as a separate obligation and notwithstanding any
      such payment or judgment to indemnify the Lender against such loss. The
      term "rate of exchange" in this paragraph 27 means the spot rate at which
      the Lender, in accordance with normal practices is able on the relevant
      date to purchase the Original Currency with the Second Currency and
      includes any premium and costs of exchange payable in connection with such
      purchase.

28.   All words used herein in the plural shall be deemed to have been used in
      the singular where the context and construction so require.

29.   This Guarantee shall be governed by and construed in accordance with the
      laws of the Province of Ontario.

30.   The Guarantor and the Lender irrevocably consent and submit to the
      non-exclusive jurisdiction of the Courts in the Province of Ontario in
      connection with the resolution of any disputes relating to this Guarantee.
      The Guarantor irrevocably waives any objection based on venue or forum non
      conveniens with respect to any action instituted therein arising under
      this Guarantee.

31.   The Guarantor and the Lender each hereby waive any right to trial by jury
      of any claim, demand, action or cause of action arising under this
      Guarantee or in respect of this the Guarantor and Lender each hereby
      agrees that any such claim, demand, action or cause of action shall be
      decided by court trial without a jury and that borrower or lender may file
      an original counterpart of this Guarantee with any court as written
      evidence of the consent of the parties to the waiver of their right to a
      trial by jury.

32.   The undersigned and each of them acknowledges receipt of an executed copy
      of this Guarantee.

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The parties acknowledge that they have required that this agreement and all
related documents be prepared in English.

Les parties reconnaissent avoir exige que la presente convention et tous les
documents connexes soient rediges en anglais.

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      Executed under seal as of this 17th day of February, 2005.

                                                  TARPON INDUSTRIES, INC.
                                                  Per:  /s/ J. PETER FARQUHAR
                                                       ------------------------
                                                  Name: J. PETER FARQUHAR
                                                  Title: CEO

                                      -11-<PAGE>

                                                                    EXHIBIT 10.3

                           GENERAL SECURITY AGREEMENT

TO:               LASALLE BUSINESS CREDIT,
                  A DIVISION OF ABN AMRO BANK N.V., CANADA BRANCH
                  15th Floor, Maritime Life Tower
                  Toronto-Dominion Centre
                  79 Wellington Street West
                  Toronto, Ontario
                  M5K 1G8

                  (hereinafter the "Lender")

GRANTED BY:       STEELBANK INC.
                  5349 Maingate Drive
                  Mississauga, Ontario
                  L4W 1G6

                  (hereinafter the "Debtor")

1.    GRANT OF SECURITY INTEREST

1.1   SECURITY INTEREST

      As general and continuing security for (a) the payment of principal and
interest and all other moneys from time to time owing by the Debtor to the
Lender, including, without limitation under the Loan Agreement (as hereinafter
defined), and (b) the payment and performance of all other indebtedness and
obligations of the Debtor to the Lender under the Loan Agreement (as hereinafter
defined) or any other instruments or documents of security which may now or in
the future be granted by the Debtor to the Lender (all of the foregoing being
herein collectively called the "Obligations") the Debtor, IN CONSIDERATION OF
THE OBLIGATIONS and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby bargains, assigns and
transfers to the Lender, and grants to the Lender a continuing security interest
in, all the property, assets and undertakings of the Debtor of whatsoever nature
and kind, now owned or hereafter-acquired by or on behalf of the Debtor,
wherever located (the "Collateral") including, without limitation:

      (a)   Accounts Receivable and Contracts

            All debts, book debts, accounts, claims, demands, moneys and choses
            in action whatsoever including, without limitation, claims against
            the Crown and claims under insurance policies, which are now owned
            by or are due, owing or accruing due to the Debtor or which may
            hereafter be owned by or become due, owing or accruing due to the
            Debtor together with all contracts, securities, bills, notes, lien
            notes, judgments, chattel mortgages, mortgages and all other rights,
            benefits and documents now or hereafter taken, vested in or held by
            the Debtor in respect of or as security for the same and the full
            benefit and advantage thereof, and all rights of action or claims
            which the Debtor now has or may at any time hereafter have

<PAGE>

            against any person or persons, firm or Debtor in respect thereof
            (all of the foregoing being herein collectively called the "Accounts
            Receivable");

      (b)   Inventory

            All inventory of whatever kind now or hereafter owned by the Debtor
            or in which the Debtor now or hereinafter has an interest or right
            of any kind, and all accessions thereto and products thereof,
            including, without limitation, all goods, merchandise, raw
            materials, goods in process, finished goods, packaging and packing
            material and other tangible personal property now or hereafter held
            for sale, lease, rental or resale or that are to be furnished or
            have been furnished under a contract of service or that are to be
            used or consumed in the business of the Debtor (all of the foregoing
            being herein collectively called the "Inventory");

      (c)   Equipment

            All goods now or hereafter owned by the Debtor which are not
            inventory or consumer goods as defined in the Personal Property
            Security Act (Ontario) ("PPSA") including, without limitation, all
            fixtures, equipment, machinery, tools, furniture, vehicles and other
            tangible personal property (all of the foregoing being herein
            collectively called the "Equipment");

      (d)   Chattel Paper, Instruments, Securities, etc.

            All chattel paper, instruments, warehouse receipts, bills of lading
            and other documents of title, whether negotiable or non-negotiable,
            shares, stock, warrants, bonds, debentures, debenture stock or other
            securities, now or hereafter owned by the Debtor;

      (e)   Intangibles

            All intangibles now or hereafter owned by the Debtor including,
            without limitation, all contractual rights, goodwill, patents, trade
            marks, trade names, copyrights, industrial designs and other
            industrial or intellectual property or rights therein, including
            those more particularly set out in Schedule "A" hereto;

      (f)   Books and Accounts, etc.

            With respect to the personal property described in Paragraphs (a) to
            (e) inclusive, all books, accounts, invoices, deeds, documents,
            writings, letters, papers, security certificates and other records
            in any form evidencing or relating thereto and all contracts,
            securities, instruments and other rights and benefits in respect
            thereof;

      (g)   Other Property

            The uncalled capital, money, rights, bills of exchange, negotiable
            and non-negotiable instruments, judgments and securities not
            otherwise described in Paragraphs (a) to (f) inclusive;

                                      -2-
<PAGE>

      (h)   Replacements, etc.

            With respect to the personal property described in Paragraphs (a) to
            (g) inclusive, all substitutions and replacements thereof,
            increases, additions and accessions thereto and any interest of the
            Debtor therein; and

      (i)   Proceeds

            With respect to the personal property described in Paragraphs (a) to
            (h) inclusive, personal property in any form or fixtures derived
            directly or indirectly from any dealing with such property or that
            indemnifies or compensates for such property destroyed or damaged
            and proceeds of proceeds and whether or not of the same type, class
            or kind as the original collateral.

1.2   DEFINITIONS AND INTERPRETATION

      In this Security Agreement:

      (a)   Terms used herein and defined in the PPSA shall have the same
            meanings as in the PPSA unless the context otherwise requires;

      (b)   Terms not otherwise defined herein or in the PPSA shall have the
            meaning ascribed to them in the Loan Agreement;

      (c)   Any reference to "Collateral" shall, unless the context otherwise
            requires, refer to "Collateral or any part thereof";

      (d)   The grant of the security interest herein provided for shall
            include, without limitation, a fixed mortgage, hypothecation,
            pledge, charge and assignment of the Collateral in favour of the
            Lender;

      (e)   "Loan Agreement" shall mean the Loan Agreement by and among the
            Lender and the Debtor dated as of the date hereof, as the same may
            be amended, supplemented, revised, replaced or restated from time to
            time;

      (f)   The term "security interest" shall include, without limitation, a
            fixed mortgage, hypothecation, pledge, charge and assignment;

      (g)   The term "purchase money security interest" shall mean a purchase
            money security interest granted by the Debtor under the PPSA to
            secure all or any part of the indebtedness incurred by the Debtor in
            connection with the acquisition of property (not in excess of the
            acquisition price of such property) or any extension or renewal or
            replacement of such indebtedness provided that the principal amount
            of such indebtedness is not increased; and

      (h)   The term "encumbrance" shall include, without limitation, a security
            interest, lien, hypothec, claim, charge, deemed trust or encumbrance
            of any kind whatsoever.

                                      -3-
<PAGE>

1.3   LEASES

      The last day of the term of any lease, oral or written, or any agreement
therefor, now held or hereafter acquired by the Debtor, shall be excepted from
the security interest hereby granted and shall not form part of the Collateral,
but the Debtor shall stand possessed of such one day remaining, upon trust to
assign and dispose of the same as the Lender or any assignee of such lease or
agreement shall direct. If any such lease or agreement therefor contains a
provision which provides in effect that such lease or agreement may not be
assigned, sub-leased, charged or encumbered without the leave, license, consent
or approval of the lessor, the application of the security interest created
hereby to any such lease or agreement shall be conditional upon such leave,
license, consent or approval having been obtained.

1.4   DEBTOR REMAINS LIABLE

      Notwithstanding anything herein to the contrary:

      (a)   the Debtor shall remain liable under the contracts and agreements
            included in the Collateral to the extent set forth therein to
            perform all its duties and obligations thereunder to the same extent
            as if this Security Agreement had not been executed;

      (b)   the exercise by the Lender of any of the rights or remedies
            hereunder shall not release the Debtor from any of its duties or
            obligations under the contracts and agreements included in the
            Collateral; and

      (c)   the Lender shall not have any obligation or liability under the
            contracts and agreements included in the Collateral by reason of
            this Security Agreement, nor shall the Lender be obligated to
            perform any of the obligations or duties of the Debtor thereunder or
            to take any action to collect or enforce any claim for payment
            assigned hereunder.

2.    REPRESENTATIONS AND WARRANTIES

2.1   LOAN AGREEMENT

      The Debtor has reviewed the representations and warranties made by it
under the Loan Agreement and represents and warrants to and in favour of the
Lender acknowledging that the Lender is relying thereon on the date hereof and
on the date of each borrowing of a loan or issuance of a letter of credit, the
truth and accuracy of each such representation and warranty, and where any act
or thing is to be done by it or not permitted to be done by it or to occur under
the Loan Agreement, the Debtor agrees to do or not to do or not to allow to
occur any such act or thing.

2.2   SURVIVAL

      All representations and warranties of the Debtor made herein or in any
certificate or other document delivered by or on behalf of the Debtor to the
Lender are material, shall be deemed to have been relied upon by the Lender
notwithstanding any investigation heretofore or hereafter

                                      -4-
<PAGE>

made by or on behalf of the Lender, shall survive the execution and delivery of
this Security Agreement and shall continue in full force and effect without time
limit.

3.    COVENANTS OF THE DEBTOR

      The Debtor covenants and agrees with the Lender that so long as there
shall remain any Obligations of or affecting any party to this Security
Agreement:

3.1   PAYMENT

      The Debtor will pay duly and punctually all sums of money due by it to the
Lender under this Security Agreement and the Loan Agreement at the times and
places and in the manner provided for herein and therein and under any other
agreements forming part of the Obligations.

3.2   LOAN AGREEMENT

      The Debtor shall duly observe and perform or cause to be observed or
performed each of its covenants and obligations provided for in the Loan
Agreement and in any of the instruments or documents of security granted by the
Debtor to the Lender in connection therewith.

3.3   NOTICE REGARDING CHANGE OF ADDRESS, ETC.

      The Debtor shall notify the Lender in writing:

      (a)   At least twenty (20) days prior to any change of name of the Debtor;

      (b)   At least twenty (20) days prior to any transfer of the Debtor's
            interest in any part of the Collateral except sales of Inventory in
            the ordinary course of the Debtor's business or as otherwise
            expressly permitted hereunder;

      (c)   Promptly upon becoming aware, and in any event within two (2)
            Business Days, of any significant loss of or damage to Collateral;

      (d)   At least twenty (20) days prior to any change in the location(s) of
            the Collateral and any records relating thereto; and

      (e)   Forthwith upon becoming aware of the existence of any condition or
            event which could cause or which, with the passage of time or
            notice, or both, constitute a Default (as such term is hereinafter
            defined) give the Lender notice thereof specifying the nature and
            duration thereof and the action being taken or proposed to be taken
            with respect thereto, provided that written notice shall be
            delivered to the Lender within two (2) Business Days thereafter.

4.    COLLECTION OF PROCEEDS

4.1   PAYMENTS RECEIVED IN TRUST

      Upon the occurrence and during the continuance of an Event of Default, as
defined in the Loan Agreement, the Debtor shall:

                                      -5-
<PAGE>

      (a)   Collect and enforce payment of all Accounts Receivable (except as
            provided for in Section 4.2) and shall dispose of and receive
            payment for all Inventory which is ordinarily disposed of in the
            Debtor's business;

      (b)   Receive and hold in trust for the Lender, all payments on or
            instruments received in respect of the Collateral, all rights by way
            of suretyship or guarantee which the Debtor now has or may hereafter
            acquire to enforce payment of Collateral and all rights in the
            nature of a security interest whereby the Debtor may satisfy any
            Collateral out of property, and all non-cash proceeds of any such
            collection, disposition or realization of any of the Collateral
            shall be subject to the security interest hereby created;

      (c)   Endorse to the Lender and forthwith deliver to it all such payments
            and instruments in the form received by the Debtor; and

      (d)   Forthwith deliver to the Lender all property in the Debtor's
            possession or hereafter coming into its possession through
            enforcement of any such rights.

4.2   ACCOUNT DEBTOR

      The Lender may at any time, after the occurrence of an Event of Default
which is continuing, notify an account debtor or debtor under any Account
Receivable of the assignment of the Account Receivable to the Lender and
instruct such person to make payment to the Lender in respect of any of the
Accounts Receivable and the Lender may hold all amounts acquired or received
from any such account debtors or debtors, together with income on such amounts,
as part of the Collateral and as security for the Obligations.

5.    DEFAULT

5.1   DEFAULT

      Without in any way limiting the demand nature of the Obligations or any of
them, if any, the Obligations secured hereby shall become immediately due and
payable and the security interests hereby constituted shall become enforceable
in each and every of the following events (herein called a "Default"):

      (a)   if the Debtor fails to make any payment of any of the Obligations
            when due; and

      (b)   if an Event of Default under the Loan Agreement shall occur.

5.2   DEMAND NATURE OF OBLIGATIONS

      The Debtor agrees that the provision of defaults in Section 5.1 shall not
derogate from any demand nature of the Obligations as provided in the Loan
Agreement as at any time without restriction, whether or not the Debtor has
complied with the provisions of this Security Agreement or any other agreement
or instrument between it and the Lender. The Debtor agrees that upon the
occurrence of a Default under Section 5.1, the security interests hereby
constituted shall become enforceable and the Lender shall be entitled to
exercise and enforce any or all of the remedies herein provided or which may
otherwise be available to the Lender by statute at law

                                      -6-
<PAGE>

or in equity and all amounts secured hereby shall immediately be paid to the
Lender by the Debtor.

6.    REMEDIES ON DEFAULT

      If the security interests hereby constituted becomes enforceable, the
Lender shall have, in addition to any other rights, remedies and powers which it
may have in the Loan Agreement, at law, in equity or under the PPSA, the
following rights, remedies and powers:

6.1   POWER OF ENTRY

      The Debtor shall forthwith upon demand assemble and deliver to the Lender
possession of all of the Collateral at such place as may be specified by the
Lender. The Lender may take such steps as it considers necessary or desirable to
obtain possession of all or any part of the Collateral and, to that end, the
Debtor agrees that the Lender, its servants or agents or Receiver may, at any
time, during the day or night, enter upon lands and premises where the
Collateral may be found for the purpose of taking possession of and/or removing
the Collateral or any part thereof. In the event of the Lender taking possession
of the Collateral, or any part thereof, the Lender shall have the right to
maintain the same upon the premises on which the Collateral may then be situate.
The Lender may, in a reasonable manner, take such action or do such things as to
render any Equipment unusable, provided that the Lender shall not cause
deliberate damage to such Equipment in so doing.

6.2   POWER OF SALE

      The Lender may sell, lease or otherwise dispose of all or any part of the
Collateral, as a whole or in separate parcels, by public auction, private tender
or by private contract, with or without notice, except as otherwise required by
applicable law, with or without advertising and without any other formality, all
of which are hereby waived by the Debtor. Such sale, lease or disposition shall
be on such terms and conditions as to credit and otherwise and as to upset or
reserve bid or price as to the Lender, in its sole discretion, may seem
advantageous. If such sale, transfer or disposition is made on credit or part
cash and part credit, the Lender need only credit against the Obligations the
actual cash received at the time of the sale. Any payments made pursuant to any
credit granted at the time of the sale shall be credited against the Obligations
as they are received. The Lender may buy in or rescind or vary any contract for
sale of all or any of the Collateral and may resell without being answerable for
any loss occasioned thereby. Any such sale, lease or disposition may take place
whether or not the Lender has taken possession of the Collateral. The Lender
may, before any such sale, lease or disposition, perform any commercially
reasonable repair, processing or preparation for disposition and the amount so
paid or expended shall be deemed advanced to the Debtor by the Lender, shall
become part of the Obligations, shall bear interest at the highest rate per
annum charged by the Lender on the Obligations or any part thereof and shall be
secured by this Security Agreement.

6.3   VALIDITY OF SALE

      No person dealing with the Lender or its servants or agents shall be
concerned to inquire whether the security hereby constituted has become
enforceable, whether the powers which the Lender is purporting to exercise have
become exercisable, whether any money remains due on the security of the
Collateral, as to the necessity or expedience of the stipulations and conditions

                                      -7-
<PAGE>

subject to which any sale, lease or disposition shall be made, otherwise as to
the propriety or regularity of any sale or any other dealing by the Lender with
the Collateral or to see to the application of any money paid to the Lender. In
the absence of fraud on the part of such persons, such dealings shall be deemed,
so far as regards the safety and protection of such person, to be within the
powers hereby conferred and to be valid and effective accordingly.

6.4   RECEIVER-MANAGER

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

6.5   CARRYING ON BUSINESS

      The Lender may carry on, or concur in the carrying on of, all or any part
of the business or undertaking of the Debtor, and may, to the exclusion of all
others, including the Debtor, enter upon, occupy and use all or any of the
premises, buildings, plant and undertaking of or occupied or used by the Debtor
and may use all or any of the tools, machinery, equipment and intangibles of the
Debtor for such time as the Lender sees fit, free of charge, to carry on the
business of the Debtor and, if applicable, to manufacture or complete the
manufacture of any Inventory and to pack and ship the finished product.
Notwithstanding the foregoing, if any such premises are subject to a landlord
waiver, the Lender shall exercise its rights in accordance therewith.

6.6   DEALING WITH COLLATERAL

      The Lender may seize, collect, realize, dispose of, enforce, release to
third parties or otherwise deal with the Collateral or any part thereof in such
manner, upon such terms and conditions and at such time or times as may seem to
it advisable, all of which without notice to the Debtor except as otherwise
required by any applicable law. The Lender may demand, sue for and receive any
Accounts Receivable with or without notice to the Debtor, give such receipts,
discharges and extensions of time and make such compromises in respect of any
Accounts Receivable which may, in the Lender's absolute discretion, seem bad or
doubtful. The Lender may charge on its own behalf and pay to others, sums for
costs and expenses incurred including, without limitation, legal fees and
expenses on a solicitor and his own client scale and Receivers' and accounting
fees, in or in connection with seizing, collecting, realizing, disposing,
enforcing or otherwise dealing with the Collateral and in connection with the
protection and enforcement

                                      -8-
<PAGE>

of the rights of the Lender hereunder including, without limitation, in
connection with advice with respect to any of the foregoing. The amount of such
sums shall be deemed advanced to the Debtor by the Lender, shall become part of
the Obligations, shall bear interest at the highest rate per annum charged by
the Lender on the Obligations or any part thereof and shall be secured by this
Security Agreement.

6.7   PAY ENCUMBRANCES

      The Lender may pay any amounts owing in respect of any encumbrance that
exist or is threatened against the Collateral. In addition, the Lender may
borrow money required for the maintenance, preservation or protection of the
Collateral or for the carrying on of the business or undertaking of the Debtor
and may grant further security interests in the Collateral in priority to the
security interest created hereby as security for the money so borrowed. In every
such case the amounts so paid or borrowed together with costs, charges and
expenses incurred in connection therewith shall be deemed to have been advanced
to the Debtor by the Lender, shall become part of the Obligations, shall bear
interest at the highest rate per annum charged by the Lender on the Obligations
or any part thereof and shall be secured by this Security Agreement.

6.8   APPLICATION OF PAYMENTS AGAINST OBLIGATIONS

      Any and all payments made in respect of the Obligations from time to time
and moneys realized on the Collateral may be applied to such part or parts of
the Obligations as the Lender may see fit, the whole in accordance with the
provisions of the Loan Agreement. The Lender shall, at all times and from time
to time, have the right to change any appropriation as it may see fit in
accordance with the provisions of the Loan Agreement.

6.9   SET-OFF

      The Obligations will be paid by the Debtor without regard to any equities
between the Debtor and the Lender or any right of set-off or cross-claim. Any
indebtedness owing by the Lender to the Debtor may be set off and applied by the
Lender against the Obligations at any time after the occurrence of an Event of
Default and during the continuation thereof, without demand upon or notice to
anyone.

6.10  DEFICIENCY

      If the proceeds of the realization of the Collateral are insufficient to
repay the Lender all moneys due to it, the Debtor shall forthwith pay or cause
to be paid to the Lender such deficiency.

6.11  LENDER NOT LIABLE

      The Lender shall not be liable or accountable for any failure to seize,
collect, realize, dispose of, enforce or otherwise deal with the Collateral,
shall not be bound to institute proceedings for any such purposes or for the
purpose of preserving any rights of the Lender, the Debtor or any other person,
firm or Debtor in respect of the Collateral and shall not be liable or
responsible for any loss, cost or damage whatsoever which may arise in respect
of any such failure including, without limitation, resulting from the negligence
of the Lender or any of its

                                      -9-
<PAGE>

officers, servants, agents, solicitors, attorneys, Receivers or otherwise other
than its or their gross negligence or wilful misconduct. Neither the Lender nor
its officers, servants, Lenders or Receivers shall be liable by reason of any
entry into possession of the Collateral or any part thereof, to account as a
mortgagee in possession, for anything except actual receipts, for any loss on
realization, for any act or omission for which a mortgagee in possession might
be liable, for any negligence in the carrying on or occupation of the business
or undertaking of the Debtor as provided in Section 6.5 or for any loss, cost,
damage or expense whatsoever which may arise in respect of any such actions,
omissions or negligence other than its or their gross negligence or wilful
misconduct.

6.12  EXTENSIONS OF TIME

      The Lender may grant renewals, extensions of time and other indulgences,
take and give up securities, accept compositions, grant releases and discharges,
perfect or fail to perfect any securities, release any part of the Collateral to
third parties and otherwise deal or fail to deal with the Debtor, Subsidiaries
of the Debtor, Guarantors, sureties and others and with the Collateral and other
securities as the Lender may see fit, all without prejudice to the liability of
the Debtor to the Lender or the Lender's rights and powers under this Security
Agreement.

6.13  RIGHTS IN ADDITION

      The rights and powers conferred by this Article 6 are in supplement of and
in addition to and not in substitution for any other rights or powers the Lender
may have from time to time under this Security Agreement or under applicable
law. The Lender may proceed by way of any action, suit, remedy or other
proceeding at law or in equity and no such remedy for the enforcement of the
rights of the Lender shall be exclusive of or dependent on any other such
remedy. Any one or more of such remedies may from time to time be exercised
separately or in combination.

7.    GENERAL

7.1   SECURITY IN ADDITION

      The security hereby constituted is not in substitution for any other
security for the Obligations or for any other agreement between the parties
creating a security interest in all or part of the Collateral, whether
heretofore or hereafter made, and such security and such agreements shall be
deemed to be continued and not affected hereby unless expressly provided to the
contrary in writing and signed by the Lender and the Debtor. The taking of any
action or proceedings or refraining from so doing, or any other dealing with any
other security for the Obligations or any part thereof, shall not release or
affect the security interest created by this Security Agreement and the taking
of the security interest hereby created or any proceedings hereunder for the
realization of the security interest hereby created shall not release or affect
any other security held by the Lender for the repayment of or performance of the
Obligations.

7.2   WAIVER

      Any waiver of a breach by the Debtor of any of the terms or provisions of
this Security Agreement or of a Default under Section 5.1 must be in writing to
be effective against and bind

                                      -10-
<PAGE>

the Lender. No such waiver by the Lender shall extend to or be taken in any
manner to affect any subsequent breach or Default or the rights of the Lender
arising therefrom.

7.3   FURTHER ASSURANCES

      The Debtor shall at all times do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged or delivered all and singular every
such further acts, deeds, conveyances, instruments, transfers, assignments,
security agreements and assurances as the Lender may reasonably require in order
to give effect to the provisions and purposes of this Security Agreement
including, without limitation, in respect of the Lender's enforcement of the
security and its realization on the Collateral, and for the better granting,
transferring, assigning, charging, setting over, assuring, confirming and/or
perfecting the security interest of the Lender in the Collateral pursuant to
this Security Agreement. The Debtor hereby constitutes and appoints any officer
of the Lender at its above address, or any Receiver appointed by the Court or
the Lender as provided herein, the true and lawful attorney of the Debtor
irrevocably with full power of substitution to do, make and execute after the
occurrence and continuance of an Event of Default and during the continuation
thereof all such assignments, documents, acts, matters or things with the right
to use the name of the Debtor whenever and wherever it may be deemed necessary
or expedient. The Debtor hereby authorizes the Lender to file such proofs of
claim and other documents as may be necessary or advisable in order to prove its
claim in any Bankruptcy, proposed winding-up or other proceeding relating to the
Debtor.

      Without limiting the generality of the foregoing, the Debtor:

      (a)   shall, upon the request of the Lender, mark conspicuously each
            chattel paper evidencing or relating to an Account Receivable and
            each related contract and, at the request of the Lender, each of its
            records pertaining to the Collateral with a legend, in form and
            substance satisfactory to the Lender, indicating that such chattel
            paper, related contract or Collateral is subject to the security
            interests granted hereby;

      (b)   shall, if any Accounts Receivable shall be evidenced by a promissory
            note or other instrument or chattel paper, deliver and pledge to the
            Lender hereunder such note, instrument or chattel paper duly
            endorsed and accompanied by duly executed instruments of transfer or
            assignment, all in form and substance satisfactory to the Lender;

      (c)   shall execute and file such financing or continuation statements, or
            amendments, thereto, and such other instruments or notices, as may
            be necessary or desirable, or as the Lender may request, in order to
            perfect and preserve the security interests granted or purported to
            be granted hereby;

      (d)   hereby authorizes the Lender to file one or more financing or
            continuation statements, and amendments thereto, relative to all or
            any part of the Collateral without the signature of the Debtor,
            where permitted by law; and

      (e)   shall furnish to the Lender from time to time statements and
            schedules further identifying and describing the Collateral and such
            other reports in connection with

                                      -11-
<PAGE>

            the Collateral as the Lender may request in its reasonable
            discretion, all in reasonable detail.

7.4   NO MERGER

      Neither the taking of any judgment nor the exercise of any power of
seizure or sale shall operate to extinguish the liability of the Debtor to make
payment of or satisfy the Obligations. The acceptance of any payment or
alternate security shall not constitute or create any novation and the taking of
a judgment or judgments under any of the covenants herein contained shall not
operate as a merger of such covenants.

7.5   NOTICES

      Any notice required to be given to the Debtor or the Lender may be
delivered to such party or a responsible officer thereof or may be sent by
prepaid registered mail addressed to the appropriate party at the address above
shown, or such further or other address as such party may notify to the other in
writing from time to time, and if so given the notice shall be deemed to have
been given either on the day of delivery or the day when it is deemed or
otherwise considered to have been received for the purposes of the PPSA.

7.6   CONTINUING SECURITY INTEREST AND DISCHARGE

      This Security Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until payment and
performance in full of the Obligations and the termination of the Loan
Agreement, notwithstanding any dealing between the Lender and the Debtor in
respect of the Obligations or any release, exchange, non-perfection, amendment,
waiver, consent or departure from or in respect of any or all of the terms or
provision of any security held for the Obligations.

      If the Debtor or any guarantor pays to the Lender the Obligations secured
by this Security Agreement, then the Lender shall at the request and at the
expense of the Debtor: (i) release and discharge the security interest created
hereby, and (ii) in connection therewith, execute and deliver to the Debtor such
deeds and other instruments as the Debtor shall require in its sole discretion,
acting in good faith.

7.7   GOVERNING LAW

      This Security Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.

7.8   SECURITY INTEREST EFFECTIVE IMMEDIATELY

      Neither the execution or registration of this Security Agreement nor any
partial advances by the Lender shall bind the Lender to advance any other
amounts to the Debtor. The parties intend the security interest created hereby
to attach and take effect forthwith upon execution of this Security Agreement by
the Debtor and the Debtor acknowledges that value has been given and that the
Debtor has rights in the Collateral.

                                      -12-
<PAGE>

7.9   NO COLLATERAL WARRANTIES

      There is no representation, warranty or collateral agreement affecting
this Security Agreement or the Collateral, other than as expressed herein in
writing or in the Loan Agreement and the Other Agreements.

7.10  JOINT AND SEVERAL LIABILITY

      If more than one person executes this Security Agreement as debtor, their
obligations under this Security Agreement shall be joint and several.

7.11  PROVISIONS REASONABLE

      The Debtor expressly acknowledges and agrees that the provisions of this
Security Agreement and, in particular, those respecting remedies and powers of
the Lender against the Debtor, its business and the Collateral upon default, are
commercially reasonable and not manifestly unreasonable.

7.12  NUMBER AND GENDER

      In this Security Agreement, words importing the singular number include
the plural and vice-versa and words importing gender include all genders.

7.13  INVALIDITY

      In the event that any term or provision of this Security Agreement shall,
to any extent, be invalid or unenforceable, the remaining terms and provisions
of this Security Agreement shall be unaffected thereby and shall be valid and
enforceable to the fullest extent permitted by law.

7.14  INDEMNITY AND EXPENSES

      (a)   Subject to the limitations set forth in this Agreement, the Debtor
            agrees to indemnify and save harmless the Lender from and against
            any and all claims, losses and liabilities arising out of or
            resulting out of or resulting from this Security Agreement
            (including, without limitation, enforcement of this Security
            Agreement), except claims, losses or liabilities resulting from the
            Lender's gross negligence or wilful misconduct.

      (b)   The Debtor will upon demand pay to the Lender the amount of any and
            all expenses, including the fees and disbursements of its counsel
            and of any experts and agents, which the Lender may incur in
            connection with (i) the administration of this Security Agreement,
            (ii) the custody, preservation, use or operation of, or the sale of,
            collection from, or other realization upon, any of the Collateral,
            (iii) the exercise or enforcement of any of the rights or remedies
            of the Lender hereunder or (iv) the failure by the Debtor to perform
            or observe any of the provisions hereunder.

                                      -13-
<PAGE>

      7.15  JUDGMENT CURRENCY

      If for the purpose of obtaining judgment in any court it is necessary to
convert an amount due hereunder in the currency in which it is due (the
"Original Currency") into another currency (the "Second Currency"), the rate of
exchange applied shall be that at which, in accordance with normal banking
procedures, the Lender could purchase, in the Toronto foreign exchange market,
the Original Currency with the Second Currency on the date two (2) Business Days
preceding that on which judgment is given. The Debtor agrees that its obligation
in respect of any Original Currency due from it to the Lender hereunder shall,
notwithstanding any judgment or payment in such other currency, be discharged
only to the extent that, on the Business Day following the date the Lender
receives payment of any sum so adjudged to be due hereunder in the Second
Currency the Lender may, in accordance with normal banking procedures, purchase,
in the Toronto foreign exchange market the Original Currency with the amount of
the Second Currency so paid; and if the amount of the Original Currency so
purchased or could have been so purchased is less than the amount originally due
in the Original Currency, the Debtor agrees as a separate obligation and
notwithstanding any such payment or judgment to indemnify the Lender against
such loss. The term "rate of exchange" in this section means the spot rate at
which the Lender in accordance with normal practices is able on the relevant
date to purchase the Original Currency with the Second Currency and includes any
premium and costs of exchange payable in connection with such purchase.

7.16  PRECEDENCE

      In the event that any provisions of this Security Agreement contradict and
are otherwise incapable of being construed in conjunction with the provisions of
the Loan Agreement, the provisions of the Loan Agreement shall take precedence
over those contained in this Security Agreement and, in particular, if any act
of the Debtor is expressly permitted under the Loan Agreement but is prohibited
under this Security Agreement, any such act shall be deemed to be permitted
under this Security Agreement.

7.17  SECTIONS AND HEADINGS

      The division of this Security Agreement into sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation hereof.

7.18  RECEIPT OF COPY

      The Debtor acknowledges receipt of an executed copy of this Security
Agreement.

7.19  BINDING EFFECT

      All rights of the Lender hereunder shall enure to the benefit of its
successors and assigns and all obligations of the Debtor hereunder shall bind
the Debtor and his heirs, executors, administrators, legal personal
representatives, successors and assigns.

                                      -14-
<PAGE>

      IN WITNESS WHEREOF the Debtor has duly executed this Security Agreement
and is dated as of the day of , 2005.

                                            STEELBANK INC.
                                            Per: /s/ Richard E. Clark
                                                 ------------------------------
                                            Name: RICHARD E. CLARK
                                            Title: ASSISTANT SECRETARY

                                      -15-

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