Tarpon Industries and Laurus Master Fund Ltd. Enter Into Conditional Agreement to Amend Terms of Secured Convertible Note
March 06 2007 - 11:14AM
Business Wire
Tarpon Industries Inc., (AMEX:TPO) today announced that the company
has entered into a conditional letter of agreement with Laurus
Master Fund Ltd. (Laurus) to amend the terms of the Secured
Convertible Term Note of $6 million issued by Tarpon to Laurus on
December 15, 2005. The agreement is subject to prior written
approval by Tarpon�s existing senior lender, LaSalle Bank, of
certain future payments by Tarpon of principal and interest to
Laurus from the proceeds of a series of anticipated near-term
equity raises. This approval is under discussion between Tarpon and
LaSalle. In consideration of these payments, Laurus has agreed to
(1) extend the maturity date of the note to three years from the
date of the closing of the final equity offering (2) reset the
amortization schedule to five years, with a lump sum to be paid
upon maturity; (3) amend the default interest rate of the note to
12%; (4) reset the amount of stock that they can own to 9.9% of the
outstanding shares of Tarpon and (5) convert a portion of the
principal due under the note into Tarpon equity. Subject to
receiving payments by Tarpon from the equity offerings, Laurus has
also agreed that all monthly amortizations specified in the note
shall be suspended until the outside date of the final equity
closing. In addition, upon the finalization of the payments related
to equity offerings anticipated to be closed by the end of March
2007, Laurus has agreed to waive existing defaults .. James W.
Bradshaw, Tarpon Chairman and CEO noted, �We are very pleased that
our lender/partner Laurus has the confidence in our company such
that we have been able to coordinate with them an attractive
restructuring of our Laurus debt obligations. We plan to make every
effort to continue our operational progress and justify the
confidence shown by them and our shareholders.� Tarpon Industries,
Inc. Tarpon Industries, Inc., through its wholly owned subsidiaries
within the United States and Canada, manufactures and sells
structural and mechanical steel tubing and engineered steel storage
rack systems. The company's mission is to become a larger and more
significant manufacturer and distributor of structural and
mechanical steel tubing, engineered steel storage rack systems and
related products. For more information, please visit Tarpon's
website at http://www.tarponind.com. Forward-Looking Statements
Certain statements made by Tarpon in this presentation and other
periodic oral and written statements, including filings with the
Securities and Exchange Commission, are "forward-looking"
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, as well as
statements which address operating performance, events or
developments that we believe or expect to occur in the future,
including those that discuss strategies, goals, outlook or other
non-historical matters, or which relate to future sales or earnings
expectations, cost savings, awarded sales, volume growth, earnings
or a general belief in our expectations of future operating
results, are forward-looking statements. The forward-looking
statements are made on the basis of management's assumptions and
estimations. As a result, there can be no guarantee or assurance
that these assumptions and expectations will in fact occur. The
forward-looking statements are subject to risks and uncertainties
that may cause actual results to materially differ from those
contained in the statements. Some, but not all of the risks,
include our ability to obtain future sales, our ability to
successfully integrate acquisitions, changes in worldwide economic
and political conditions, including adverse effects from terrorism
or related hostilities including increased costs, reduced
production or other factors, costs related to legal and
administrative matters, our ability to realize cost savings
expected, inefficiencies related to production that are greater
than anticipated, changes in technology and technological risks,
foreign currency fluctuations, increased fuel costs, increased
steel costs as it relates to our selling price, work stoppages and
strikes at our facilities and those of our customers, the presence
of downturns in customer markets where the company's goods and
services are sold, financial and business downturns of our
customers or vendors, and other factors, uncertainties, challenges,
and risks detailed in Tarpon's public filings with the Securities
and Exchange Commission. Tarpon does not intend or undertake any
obligation to update any forward-looking statements.
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