EXHIBIT 2.4
AMENDING AGREEMENT
This amending agreement (the "AGREEMENT") dated May 5,2004 among ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, the "VENDORS"), BST
Acquisition Ltd. (the "PURCHASER") and Tarpon Industries, Inc. (the
"PRINCIPAL").
WHEREAS the Vendors, the Purchaser and the Principal are parties to a
share purchase agreement dated April 2, 2004 (the "PURCHASE AGREEMENT") pursuant
to which the Vendors have agreed to sell to the Purchaser and the Purchaser has
agreed to purchase from the Vendors all of the issued and outstanding shares in
the capital of Steelbank Inc. ("STEELBANK");
AND WHEREAS the parties hereto now wish to amend the terms of the Purchase
Agreement in the manner set forth herein;
NOW THEREFORE in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each party, the parties hereto do hereby agree as follows:
SECTION 1 DEFINED TERMS.
Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings specified in the Purchase Agreement.
SECTION 2 AMENDMENT TO SECTION 1.1 OF THE PURCHASE AGREEMENT.
The definition of "Closing Date" in Section 1.1 of the Purchase Agreement
is amended by deleting reference to "April 30, 2004" and replacing it with "May
31, 2004", such that the definition of "Closing Date" in Section 1.1 of the
Purchase Agreement will now read as follows:
"Closing Date" means May 31, 2004 or such earlier or later date as the
Parties may agree in writing.
SECTION 3 AMENDMENT TO SECTION 2.3(b) OF THE PURCHASE AGREEMENT.
Section 2.3(b) of the Purchase Agreement is amended by deleting the last
sentence of Section 2.3(b) in its entirety, such that Section 2.3(b) of the
Purchase Agreement will now read as follows:
(b) An amount equal to $800,000 of the Share Purchase Price shall be
paid pursuant to a promissory note in substantially the form set
forth in Schedule D to this Agreement ("NOTE A") issued to Vendors
at Closing. Note A shall provide for the payment of interest on the
unpaid balance at 8% per annum, and shall have a maturity date of
December 10, 2004 (the "MATURITY DATE"). In accordance with the
terms of Note A, beginning July 1, 2004, Purchaser shall pay to
Vendors blended payments of principal and interest in the amount of
$15,000 per month under Note A (such payment to be applied first
against accrued interest outstanding with the balance to be applied
in reduction of principal) until the earlier of the Maturity Date or
the date of the
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first sale pursuant to the Principal's initial public offering (the
"IPO"), at which time all interest and unpaid principal shall be
paid in full. The Purchaser's obligations under Note A, Note B and
the Purchaser's covenant to deliver common shares of the Principal
pursuant to Section 2.3(d) shall be fully and unconditionally
guaranteed by the Corporation in substantially the form of guarantee
set forth in Schedule "G" (the "GUARANTEE") and in support of such
guarantee, the Corporation shall provide the Vendors with a general
security agreement over all of the assets of the Corporation in
substantially the form of general security agreement set forth in
Schedule H to this Agreement (the "GSA"). In addition to the GSA,
the Purchaser's obligations under Note A, each Note B and its
covenant to deliver common shares of the Principal pursuant to
Section 2.3(d) shall be secured by a share pledge of all of the
Purchased Shares from the Purchaser in favour of the Vendors in
substantially the form of share pledge agreement set forth in
Schedule "I" (the "SHARE PLEDGE").
SECTION 4 AMENDMENT TO SECTION 2.3(d) OF THE PURCHASE AGREEMENT.
Section 2.3(d) of the Purchase Agreement is amended by deleting Section
2.3(d) in its entirety and replacing it with the following:
(d) On the earlier of the Maturity Date or the date of the first sale
pursuant to the IPO, an amount equal to $375,000 of the Share
Purchase Price shall be paid to the Vendors, which amount will be
satisfied, as elected in the sole discretion of the Purchaser, in
the form of (i) common shares in the capital of the Principal,
provided that such common shares have the attributes set out in
Schedule J, or (ii) cash by certified cheque or wire transfer of
immediately available funds to or to the order of the Vendors. The
attributes of such common shares, inclusive of any hold period
restrictions are set out in Schedule J. In the event that shares are
to be issued to the Vendors, the amount of shares to be issued to
the Vendors shall be equal to $375,000 divided by the initial
offering price of the shares of common stock of Principal sold in
the IPO and shall be issued upon closing of the IPO.
SECTION 5 AMENDMENT TO SECTION 2.3 OF THE PURCHASE AGREEMENT.
Section 2.3 of the Purchase Agreement is amended by inserting the
following as Section 2.3(e) of the Purchase Agreement:
(e) The Guarantee, the GSA and the Share Pledge (collectively, the
"VENDORS' SECURITY) shall be subordinate to any and all security
(collectively, the "SENIOR LENDERS' SECURITY" and, together with the
credit agreement and all related loan documents, the "SENIOR
LENDERS' LOAN AND SECURITY DOCUMENTS") taken by the Corporation's
and/or the Principal's primary lenders (the "SENIOR LENDERS"). In
the event of realization by one or more of the Vendors under any of
the Vendors' Security and the Corporation and/or the Principal is in
then in default under the Senior Lenders' Loan and Security
Documents, and written notice thereof has been provided to the
Vendors, any and all payments to the Vendors under Note A, any of
the
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Notes B and in respect of BST's covenant to deliver common shares of
the Principal (or equivalent funds in lieu thereof) pursuant to
Section 2.3(d) shall (i) be postponed and subordinated to the
indefeasible repayment in full of all amounts owing to the Senior
Lenders under the Senior Lenders' Loan and Security Documents before
the Vendors are entitled to receive any payment on account of
amounts owing to the Vendors under Note A, any of the Notes B and in
respect of BST's covenant to deliver common shares of the Principal
(or equivalent funds in lieu thereof) pursuant to Section 2.3(d),
and (ii) rank pari passu, both as to ranking of security and
repayment of amounts owing, with the Principal's other junior
secured noteholders to the extent such noteholders then have
recourse to the assets of the Corporation. From time to time, the
Vendors shall, upon request of the Corporation or the Principal (at
the cost of the Corporation or the Principal (including all
reasonably incurred legal costs on a solicitor-and-client basis))
execute, acknowledge and deliver such further instruments and
documents in confirmation of the subordination and ranking
contemplated hereunder as may reasonably be requested by the
Corporation's or the Principal's Senior Lenders. BST and the
Purchaser acknowledge, covenant and agree that notwithstanding the
foregoing provisions of this paragraph (e)(the "SUBORDINATION
PROVISIONS"), any failure whatsoever by BST at any time to (i) pay
any monies owing to the Vendors under Note A or any of Notes B, as
and when due, pursuant to the terms thereof (and without regard to
the Subordination Provisions) or (ii) deliver to the Vendors common
shares in the capital of the Principal (or $375,000.00 in lieu
thereof) pursuant to the provisions of Section 2.3(d) hereof, as and
when due (and without regard to the Subordination Provisions) shall
constitute a default by BST thereunder for all purposes.
SECTION 6 AMENDMENT TO SECTION 6.1 AND SECTION 6.2 OF THE PURCHASE AGREEMENT
(1) Section 6.1(h)(v) of the Purchase Agreement is amended by deleting Section
6.1(h)(v) in its entirety and replacing it with the following:
(v) an acknowledgement and covenant to pay duly executed by each
Vendor and the Purchaser, substantially in the form set forth
in Schedule 6.1(h)(v);
(2) Section 6.2(c)(v) of the Purchase Agreement is amended by deleting Section
6.2(c)(v) in its entirety.
SECTION 7 AMENDMENT TO SECTION 8.3(1)(b) OF THE PURCHASE AGREEMENT.
Section 8.3(1)(b) of the Purchase Agreement is amended by deleting the
reference to "April 30, 2004" and replacing it with "May 25, 2004", such that
Section 8.3(1)(b) of the Purchase Agreement will now read as follows:
(b) by the Vendors or the Purchaser, if the Closing shall not have
occurred by May 25, 2004, provided, however, that the right to
terminate this Agreement
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under this Section 8.3(1)(b) shall not be available to any Party
whose failure to fulfil any covenant or obligation under this
Agreement shall have been the cause of, or shall have resulted in,
the failure of the Closing to occur by May 25, 2004;
SECTION 8 WAIVER OF SECTION 5.9(2) OF THE PURCHASE AGREEMENT AND CONFIRMATION OF
SCHEDULES.
(1) Notwithstanding (i) Section 5.9(2) of the Purchase Agreement, which
provision requires that the parties use commercially reasonable efforts to
prepare and settle the contents and form of the schedules to the Purchase
Agreement on or prior to April 16, 2004, or (ii) the subsequent agreement
of the parties to extend such date to April 23, 2004, each of the parties
hereto hereby irrevocably waives Section 5.9(2) of the Purchase Agreement
and the obligations of the parties thereunder.
(2) Each of the parties hereby approves the contents and form of each of the
schedules attached hereto (which schedules conform with the numbering
designations set forth in the Purchase Agreement), and irrevocably
confirms that the attached schedules constitute all of the schedules to
the Purchase Agreement and form an integral part of it.
SECTION 9 CONFIRMATION.
From and following the date hereof, each reference in the Purchase
Agreement to "this Agreement" and each reference to the Purchase Agreement in
any and all other agreements, documents and instruments delivered by the
Vendors, the Purchaser, the Principal or any other Person shall mean and be a
reference to the Purchase Agreement as amended by this Agreement. Except as
otherwise expressly amended hereby, the Purchase Agreement shall remain in full
force and effect in accordance with its terms and this Agreement and the
Purchase Agreement shall be read as one and the same instrument.
SECTION 10 NO WAIVER.
The execution, delivery and effectiveness of this Agreement shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of the parties hereto under the Purchase Agreement.
SECTION 11 GOVERNING LAW.
This Agreement shall be governed by the laws of the Province of Ontario
and the federal laws of Canada applicable therein.
SECTION 12 CONFLICT OR INCONSISTENCY.
In the event there is any conflict or inconsistency between the provisions
of this Agreement and any of the provisions of the Purchase Agreement, the
provisions of this Agreement shall prevail.
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SECTION 13 COUNTERPARTS.
This Agreement may be executed in any number of counterparts (including
counterparts by facsimile), each of which when so executed shall be deemed to be
an original and the counterparts together shall constitute one and the same
agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
BST ACQUISITIONS LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name:
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Witness ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Witness ▇▇▇▇ ▇▇▇▇▇▇▇
TARPON INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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