<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED AND RESTATED
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 26)*
Intek Diversified Corporation
_______________________________________________________________________________
(Name of Issuer)
Common Stock, par value $.01 per share
_______________________________________________________________________________
(Title of Class of Securities)
458134 10 3
______________________________
(CUSIP Number)
Edmund Hough
Chief Executive Officer
Intek Diversified Corporation
970 West 190th Street, Suite 720
Torrance, California 90502
(310) 366-7335
_______________________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 14, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement of
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 3d-(a) for other parties to whom copies are to be sent.
______________
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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_____________________ ____________________
CUSIP NO. 458134 10 3 13D PAGE 2 OF PAGES
_______________________________________________________________________________
1 NAME OF REPORTING PERSONS
S.S. OF I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Simmonds Capital Limited
_______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
_______________________________________________________________________________
3 SEC USE ONLY
_______________________________________________________________________________
4 SOURCE OF FUNDS*
wc; oo
_______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
_______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canada
_______________________________________________________________________________
7 SOLE VOTING POWER
4,465,850
NUMBER OF
SHARES ______________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH --
REPORTING
PERSON WITH ______________________________________________
9 SOLE DISPOSITIVE POWER
4,465,850
______________________________________________
10 SHARED DISPOSITIVE POWER
--
_______________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,465,850
_______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
_______________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.2%
_______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 458134 10 3
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SCHEDULE 13D
The Schedule 13D filed on March 7, 1994 (the "Schedule 13D") and amended on
March 29, 1994 ("Amendment No. 1"), on July 22, 1994 ("Amendment No. 2"), on
September 23, 1994 ("Amendment No. 3"), on April 10, 1995 ("Amendment No.
4"),on May 10, 1995 ("Amendment No. 5"), on June 5, 1995 ("Amendment No. 6"),
on June 9, 1995 ("Amendment No. 7"), on June 26, 1995 ("Amendment No. 8"), on
July 10, 1995 ("Amendment No. 9"), on August 9, 1995 ("Amendment No. 10"), on
November 27, 1995 ("Amendment No. 11"), on March 18, 1996 ("Amendment No. 12"),
On April 8, 1996 ("Amendment No. 13"), on April 16, 1996 ("Amendment No. 14"),
on April 23, 1996 ("Amendment No. 15"), on June 10, 1996 ("Amendment No. 16"),
on June 27, 1996 ("Amendment No. 17"), on July 12, 1996 ("Amendment No. 18"),
on September 30, 1996 ("Amendment No. 19"), on October 15, 1996 ("Amendment No.
20"), on November 6 , 1996 ("Amendment No. 21"), as restated and amended on
November 30 , 1996 ("Amendment No. 22"), as amended on December 27, 1996
("Amendment No. 23"), as amended on January 21, 1997 ("Amendment No. 24"), as
amended on February 11, 1997 ("Amendment No. 25") on behalf of Simmonds Capital
Limited ("SCL") is hereby further amended as follows:
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
-------------------------------------------------
The second sentence of Item 3 of the Schedule 13D is amended by deleting the
sentence entirely and inserting the following:
After the exercise of a portion of the options to purchase 1,566,666 shares of
Common stock as described in subparagraph (g) of this Item 3, and the
disposition of 2,500,000 shares as described in Item 5 subparagraphs (c), (h),
(j), (k), (m), (n), (o), (q), (r), and (s) and the acquisition of 110,000
shares as described in subparagraphs (t) and (u) of Item 5 of this Schedule
13D, SCL is the beneficial owner of 4,465,850 shares of Common Stock
(inclusive of 233,334 unexercised options). SCL, and/or its wholly-owned
subsidiary Midland International Corp., acquired shares of Common stock as
follows:
Item 3 of the Schedule 13D is further amended by inserting new subparagraphs
(q) and (r) as follows:
(q) On each of February 5, 1997 and February 6, 1997, purchased 10,000
shares of Common Stock on the open market at a price of $3.75 per share, for
cash from SCL's working capital for an aggregate purchase price of $75,000.
(r) On February 7, 1997, purchased 10,000 and 3,000 shares of Common Stock
on the open market at prices of $4.00 and $3.75 per share respectively, for
cash from SCL's working capital for an aggregate purchase price of $52,375.
Item 4. PURPOSE OF THE TRANSACTION
--------------------------
Item 4 of the Schedule 13D is amended by inserting the following immediately
prior to the last paragraph thereof:
On each of February 5, 1997 and February 6, 1997, purchased 10,000 shares of
Common Stock on the open market at a price of $3.75 per share, for cash from
SCL's working capital for an aggregate purchase price of $75,000.
On February 7, 1997, purchased 10,000 and 3,000 shares of Common Stock on the
open market at prices of $4.00 and $3.75 per share respectively, for cash from
SCL's working capital for an aggregate purchase price of $52,375
Item 5. INTEREST IN SECURITIES OF THE ISSUER
------------------------------------
The first sentence of Item 5 of the Schedule 13D is amended by deleting the
reference therein to "6,465,883" and inserting in its stead "6,499,183".
Item 5 is further amended by deleting subparagraph (u) and inserting the
following new subparagraph (u):
(u) On each of January 30, 1997, January 31, 1997, February 3, 1997,
February 4, 1997 February 4, 1997, February 5, 1997, February 6, 1997 and
February 7, 1997 SCL acquired 10,000, 10,000, 14,400, 5,000, 3,300, 10,000,
10,000 and 37,700 shares respectively of common stock in open market
transactions thereby increasing SCL's beneficial ownership of Common Stock to
4,465,850 or 11.2%.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
-------------------------------------------------------------
RESPECT TO SECURITIES OF THE ISSUER.
------------------------------------
The eighth paragraph of Item 6 of the schedule 13D is amended by deleting it in
its entirety and inserting immediately prior to the last paragraph:
On February 7, 1997, SCL issued a debenture in favor of Octagon Limited
("Octagon") in the principal amount of $2,500,000 ( the "Amended Debenture", a
copy of which is attached hereto as Exhibit GG and which replaces Exhibit O,
the "Debenture"). The Amended Debenture is due on September 15, 2000 and bears
interest at the rate per annum of the sum of the London Interbank Offer Rate
plus 2.5 %. Octagon has the option at any time, exercisable on five days
notice, to require payment of the principal amount and all accrued and unpaid
interest, by transfer to Octagon the number of Intek common shares equal to the
amount to be repaid divided by $3.25, rounded to the next whole number. In the
event that this option is exercised, the principal amount to be repaid would
represent 769,231 Intek common shares.
Page 3 of 4 Pages
CUSIP NO. 458134 10 3
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth herein is true, complete and correct.
SIMMONDS CAPITAL LIMITED
February 14, 1997
(Date)
/s/ David C. O'Kell
_______________________________________________________
(Signature)
David C. O'Kell, Executive Vice President and Secretary
_______________________________________________________
(Name/Title)
<PAGE> 5
Exhibit GG
AMENDED AND RESTATED DEBENTURE
1. Simmonds Capital Limited (a successor to Simmonds Communications Ltd.)
(hereinafter called the "Company") for value received, hereby acknowledges
itself indebted and promises to pay to Octagon Limited (hereinafter called the
"Holder") on the 15th day of September, 2000, the sum of TWO MILLION, FIVE
HUNDRED THOUSAND DOLLARS (US$2,500,000) in lawful money of the United States of
America (the "Principal Amount") and to pay interest thereon from the date
hereof at the rate per annum (the "Interest Rate") of the sum of the London
Interbank Offer Rate (determined in advance by the Holder on the date hereof
and thereafter quarterly on the first London Banking Day of February, May,
August and November of each year) plus two and a half percent (2.5%) per annum
payable monthly in arrears on the last Business Day of each month as well after
as before maturity, default and judgment, in like money and to pay interest on
overdue interest at the said rate.
2. (a) As security for the payment of the Obligations, the Company hereby
grants a security interest in and pledges the Collateral to and in
favour of the Holder (the said security interest and pledge of the
Collateral being hereinafter referred to as the "Security Interest").
The Holder shall have no rights in the Collateral other than the
Security Interest and its rights hereunder.
(b) The Security Interest shall extend to the Proceeds.
(c) The Company acknowledges and agrees that the Security
Interest is intended to attach to the Collateral upon the date
hereof.
(d) The Company has delivered to the Holder a certificate representing
769,231 shares (the "Intek Shares") of common stock of Intek
Diversified Corporation duly endorsed for transfer which shall be held
by the Holder in accordance with the terms of this Debenture. The
Company hereby irrevocably directs the Holder to deliver such
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certificate to Mees Pierson ICS Limited upon payment by the Company
of the Obligations (unless the obligation of the Company to repay
the Principal Amount is satisfied in the manner contemplated by
section 5(a)).
(e) All Collateral shall be freely transferable by delivery
(subject to any restrictions on transfer under United States
securities laws) or shall be accompanied by any and all
endorsements, powers of attorney or instruments necessary to permit
the transfer, disposition and, if applicable, the re-registration of
the Collateral as may be required as a result of the Holder
exercising its remedies under section 3 hereof.
(f) Unless and until an Event of Default shall have occurred and
be continuing, the Company shall be entitled to receive all
interest, dividends or other like payments or distributions (whether
in cash, security (as such term is defined in subsection 1(1) of the
Act) or other property) at any time payable on or with respect to
the Collateral and, unless and until an Event of Default shall have
occurred and be continuing, all such interest, dividends or other
like payments or distributions at any time payable to the Company on
or with respect to the Collateral received by the Holder shall
forthwith be paid or delivered by the Holder to the Company or as it
may direct, free and clear of the Security Interest.
(g) Unless and until an Event of Default shall have occurred and
be continuing, the Company shall be entitled to vote the Collateral
and to give consents, waivers, notices and ratifications, and to
take other action in respect of the Collateral, provided, however,
that no vote shall be cast or consent, waiver, notice or
ratification given or action taken which would impair the Collateral
or be inconsistent with or violate any provision of this Debenture.
(h) It is understood and agreed that the Holder, at any time and
from time to time when an Event of Default shall have occurred and
be continuing, may enforce any and all
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of the rights of the Company with respect to the Collateral,
including those rights described in paragraph (g) of this section
2.
3. (a) Each of the following events is herein sometimes referred to as an
"Event of Default";
(i) if default is made in the payment of the Principal Amount when
the same becomes due under the provisions hereof; or
(ii) if default is made in the payment of any interest due
hereunder and such default shall have continued for a period
of five Business Days; or
(iii) if a decree or order of a court having jurisdiction is entered
adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization or winding-up of the Company under the
Bankruptcy and Insolvency Act (Canada) or any other
bankruptcy, insolvency or analogous laws, or issuing process
of execution against any substantial part of the property of
the Company or any Significant Subsidiary, or appointing a
receiver, or ordering the winding-up or liquidation of the
affairs, of the Company or any Significant Subsidiary; or
(iv) if a resolution is passed for the winding-up or liquidation of
the Company or any Significant Subsidiary (unless in respect
of a winding-up or liquidation of any Significant Subsidiary,
the proceeds of such winding-up or liquidation are disbursed
to the direct shareholders of such Significant Subsidiary) or
if the Company or any Significant Subsidiary institutes
proceedings to be adjudicated a bankrupt or insolvent, or
consents to the institution of bankruptcy or insolvency
proceedings against it or makes a general assignment for the
benefit of its creditors or a proposal under the Bankruptcy
<PAGE> 8
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and Insolvency Act (Canada) or analogous laws, or consents to
the filing of a petition for any such proceedings or for the
appointment of a receiver of, or of any substantial part of,
its property, or admits in writing its inability to pay its
debts generally as they become due or takes action in
furtherance of any of the aforesaid purposes; or
(v) if any event of default or any event which, with the passage of
time or the giving of notice or both, would constitute an event
of default, as defined in the indentures or instruments under
which the Company or any of its Significant Subsidiaries has at
the date hereof or shall hereafter have outstanding
indebtedness for borrowed money (which indebtedness, in
accordance with generally accepted accounting principles, would
be classified as a liability on a consolidated balance sheet)
in an aggregate amount equal to or greater than U.S.
$3,000,000, shall have occurred and be continuing, and the
trustees or holders of such indebtedness have accelerated the
maturity of such indebtedness; or
(vi) if the Company breaches any of its covenants hereunder, other
than its covenant set forth in paragraph (b) of section 5, and
such breach is not cured within 30 days of the Holder giving
notice thereof to the Company; or
(vii) if the Company breaches its covenant set forth in paragraph (b)
of section 5.
(b) In case any Event of Default has occurred and is continuing,
the Security Interest shall immediately become enforceable and the
Holder may, forthwith or at any time thereafter (and, except in the
case of an Event of Default referred to in subparagraph (a)(vii) of
section 3, in the event that the Holder shall proceed under any of
subparagraphs (ii) to (viii) inclusive of this paragraph (b) upon
five Business Days'
<PAGE> 9
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notice to the Company), except in the event such Event of Default
shall have been cured prior to any action by the Holder under this
paragraph (b) or except as provided by applicable law or this
Debenture, take any one or more of the following actions:
(ii) declare any or all of the Obligations to be immediately due and
payable by giving notice in writing thereof to the Company and,
in such event, such Obligations shall be forthwith due and
owing by the Company to the Holder;
(iii) commence legal action to enforce payment of the Obligations;
(iv) subject to any applicable law, dispose of the Collateral by
private sale, public sale or otherwise upon such terms and
conditions as the Holder may determine; provided that the
Holder may apply and allocate any proceeds arising from the
realization of the Collateral to the Obligations in such manner
as the Holder, in its absolute discretion, shall deem
appropriate;
(v) elect to retain the Collateral or any portion thereof
irrevocably in full and final satisfaction of the Obligations
by giving written notice of such election to the Company;
(vi) exercise any or all of the rights and privileges attaching to
any of the Collateral as if the Holder were the absolute owner
thereof;
<PAGE> 10
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(vii) file such proofs of claims or other documents as may be
necessary or desirable to have its claim lodged in any
bankruptcy, winding-up, liquidation, arrangement, dissolution
or other proceedings (voluntary or otherwise) relating to the
Company;
(viii) where the Collateral has been disposed of by the Holder as
provided herein, commence legal action against the Company for
the difference, if any, between (i) any damages suffered by the
Holder or its assigns resulting directly or indirectly from the
violation by the Company of this Debenture (including, without
limitation, the Obligations); and (ii) the proceeds received by
the Holder on a disposition of the Collateral or Proceeds
(hereinafter referred to as the "Deficiency"); or
(ix) take any other action, suit, remedy or proceeding authorized or
permitted by this Debenture or by law or equity.
(c) The Company shall pay to the Holder on demand all costs and
expenses of the Holder (including legal fees) incurred in exercising
its rights hereunder other than under section 5 hereof, which costs
and expenses shall form part of the Obligations, and shall be paid
by the Company to the Holder forthwith after demand therefor shall
have been made by the Holder to the Company together with interest
from and including the date of demand or, if the Holder has taken
steps to exercise its rights under paragraph (b) of this section 3,
from and including the date upon which the cost or expense is
incurred, at the Interest Rate payable before and after demand,
maturity, default and judgment, with interest on amounts in default
at the same rate. All such interest shall be payable on demand,
shall be determined daily and shall be compounded monthly in arrears
on the last day of each month. Payment of such interest shall be
secured by the Security Interest.
(d) Where the Collateral has been disposed of by the Holder, the
Deficiency shall be paid by the Company to the Holder forthwith
after demand therefor shall have been made by the Holder to the
Company together with interest from and including the date upon
which the Deficiency arises at the Interest Rate payable before and
after demand, maturity, default and judgment, with interest on
amounts in default at the
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same rate. All such interest shall be payable on demand, shall be
determined daily and shall be compounded monthly in arrears on the
last day of each month. Payment of the Deficiency together with
such interest shall be secured by the Security Interest.
(e) The Holder shall not be under any obligation, or be liable or
accountable for any failure, to enforce payment or performance of
the Obligations or to exercise any of its rights and remedies
hereunder and shall not be under any obligation to institute
proceedings for any of such purposes.
(f) At any time before the Holder has disposed of the Collateral
as provided for herein or before the Holder has elected, in the
manner set out in paragraph (b)(iv) of this section 3, to retain all
or part of the Collateral irrevocably, the Company may redeem the
Collateral by satisfying all of its obligations and liabilities
under this Debenture.
(g) The Company irrevocably constitutes and appoints the Holder
and its directors and officers holding office from time to time as
the true and lawful attorneys of the Company with full power of
substitution in the name of the Company to do any and all such acts
or things or execute and deliver all such agreements, documents and
instruments as the Holder, in its sole discretion, considers
necessary or desirable to carry out the provisions and purposes of
this Debenture or to exercise its rights and remedies hereunder,
including, without in any way limiting the generality of the
foregoing: (i) transferring any or all of the Collateral into the
name of the Holder or to any person who acquires the same pursuant
to the provisions of paragraph (b) of this section 3; (ii)
endorsing, negotiating or redeeming any Collateral; (iii) exercising
any voting rights associated with the Collateral and executing any
proxies or similar instruments in furtherance thereof; and (iv)
realizing or collecting any Proceeds or any dividends, principal,
interest or other payments on the Collateral or in respect thereof.
The Company hereby ratifies and agrees to ratify all acts of any
such attorney taken or done in accordance with this paragraph (g).
This power of attorney
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-8-
being coupled with an interest shall not be revoked or terminated
by any act or thing and shall remain in full force and effect until
this Debenture has been terminated.
(h) The Company will, from time to time at the request of the
Holder, make and do all such acts and things and execute and deliver
all such instruments, agreements and documents as the Holder shall
reasonably request by notice in writing given to the Holder in order
to create, preserve, perfect, validate or otherwise protect the
Security Interest, to enable the Holder to exercise and enforce any
of its rights and remedies hereunder and generally to carry out the
provisions and purposes of this Debenture.
4. The Company hereby covenants and agrees with the Holder that until all
monies owing hereunder are paid in full it will take or cause to be taken all
such steps and actions to ensure that an Event of Default shall not occur.
5. (a) The Holder shall have the option exercisable on five days' written
notice given by the Holder to the Company, to require the repayment of
all (but not less than all) of the Principal Amount, together with all
accrued but unpaid interest thereon, (collectively, the "Repayment
Amount") by the transfer to the Holder of such number of common shares
of Intek equal to the Repayment Amount divided by U.S. $3.25, rounded
up to the next whole number (the "Repayment Shares").
(b) The Company covenants and agrees that the Repayment Shares (or any
securities to which the Holder may become entitled to pursuant to
paragraph (c) of this section 5 following a Capital Reorganization (as
defined below)) shall upon the exercise by the Holder of its option
pursuant to paragraph (a) of this section 5: (i) have been registered
under the United States Securities Act of 1933 (the "1933 Act"), or
(ii) shall otherwise be "unrestricted" (subject to any applicable 40
day restricted period pursuant to Regulation S made under the 1933 Act
("Regulation S")) for the purposes of the 1933 Act and no legend or
restriction on transfer shall
<PAGE> 13
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be required to be applied to the Repayment Shares, and the holder
shall have received an opinion of counsel satisfactory to it, acting
reasonably, to such effect.
(c) If there occurs after the date hereof a reclassification of
the outstanding common shares of Intek (including a subdivision or
consolidation thereof) or a change or exchange of common shares of
Intek into or for other shares or into or for other securities or
any other capital reorganization, or a consolidation, amalgamation
or merger of Intek with or into any other corporation or other
entity, or a transfer of the undertaking or assets of Intek as an
entirety to another corporation or entity in which the holders of
common shares of Intek are entitled to receive shares, other
securities or other property (any of which events is hereinafter
referred to as a "Capital Reorganization"), and after the effective
date of such Capital Reorganization the Holder exercises its right
pursuant to paragraph (a) of this section 5 to have the Principal
Amount prepaid, such right will consist of the right to receive
payment of all (but not less than all) of the Principal Amount and
any accrued but unpaid interest thereon by the transfer to the
Holder of the aggregate number of common shares of Intek, other
securities or other property which the Holder would have been
entitled to receive as a result of such Capital Reorganization if,
immediately prior to such Capital Reorganization being effected, the
Holder had been the registered holder of the Repayment Shares.
(d) On the happening of each and every Capital Reorganization,
the applicable provisions of this Debenture shall be deemed to be
amended accordingly, including, without limitation, the definition
of Repayment Shares which shall be amended such that it includes all
shares, other securities and other property received on the most
recent Capital Reorganization as a result of being the registered
holder of the Repayment Shares as well as any shares, other
securities or other property constituting part of the Repayment
Shares which were not changed, exchanged or otherwise affected by
the most recent Capital Reorganization.
<PAGE> 14
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(e) Notwithstanding any provision hereof, the Repayment Shares or
other securities or other property received on a Capital
Reorganization and transferred to the Holder pursuant to this
section 5 shall prior to such transfer be beneficially owned by the
Company free and clear of all liens, claims, charges or encumbrances
whatsoever and the Repayment Shares, or such other securities or
other property shall be registered under applicable United States
federal securities law and regulations or otherwise freely tradeable
in the United States. The Holder represents and warrants in
connection therewith, and acknowledges that the Company is relying
on such representation and warranty in entering into this Debenture,
that it is not a "U.S. Person" as defined in Rule 901(o) of
Regulation S and covenants that, prior to the expiration of the
forty day period beginning with the date of the exercise of the
option provided for in section 5(a), it will not transfer any of the
Repayment Shares received on the exercise of that option to or for
the account or benefit of any "U.S. Person" as defined in Rule
901(o) of Regulation S.
6. (a) Notwithstanding any provision contained herein, the Company shall not
be obliged to make any payments of interest or other amounts payable
to the Holder hereunder in excess of the amount or rate which would
be prohibited by applicable law or would result in the receipt by the
Holder of interest at a criminal rate (as such terms are construed
under the Criminal Code (Canada)).
(b) For the purposes of this Debenture, whenever any interest is
calculated on the basis of a period of time other than a calendar
year, the annual rate of interest to which each rate of interest
determined pursuant to such calculation is equivalent for the
purposes of the Interest Act (Canada) is such rate as so determined
multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by the number of
days used in the basis for such determination. The Company shall
not be required to make any payment of interest hereunder or any
<PAGE> 15
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portion thereof to the extent that such payment or such portion
thereof would be made in violation of any provision of the Interest
Act (Canada).
7. Subject to section 5 hereof, payments of the Principal Amount and interest
thereon and any other amount payable hereunder shall be made in lawful money of
the United States of America by wire transfer of immediately available funds to
the account of the Holder at Chase Manhatten Bank, Building F, Chase Metrotec
Centre, New York, New York 11245 U.S.A for the account of Mees Pierson NV,
London a/c 0011624426 for the favour of Mees Pierson ICS Ltd. a/c 20005461,
swift code chasuss33, or to such other account or in such other manner as shall
have been designated by the Holder by written notice to the Company.
8. If the date on which any payment is required to be made pursuant to the
provisions of this Debenture occurs on a day which is not a Business Day, such
payment shall be due and payable on the immediately succeeding Business Day.
9. Subject to sections 3 and 5 hereof, no prepayment of the Principal Amount
may be made.
10. Upon the satisfaction of the Obligations, the Holder shall at its own
expense deliver to the Company possession of all Collateral and make and do all
such acts and things and execute and deliver all such instruments, agreements
and documents as the Company shall consider reasonably necessary or desirable
to discharge the Security Interest, to release and discharge the Collateral
therefrom and to record such release and discharge in all appropriate offices
of public record.
11. At any time and from time to time upon the Holder receiving:
<PAGE> 16
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(a) an Officer's Certificate requesting that additional property
(the "Additional Collateral") specifically enumerated therein be
subject to the Security Interest and stating that:
(i) the Company has a good and valid title to and
interest in the Additional Collateral free and clear of any
lien, charges, pledges and encumbrances whatsoever and that
the pledge and delivery of the Additional Collateral pursuant
hereto will create a valid first pledge and perfected security
interest in the Additional Collateral, subject to no prior
pledge, lien, mortgage, hypothecation, security interest,
charge or encumbrance;
(ii) the Company has the right and lawful authority to
cause the Additional Collateral to be subject to the Security
Interest; and
(iii) all requirements imposed by the terms of this
Debenture to make the Additional Collateral subject to the
Security Interest have been fulfilled in accordance with the
terms of this Debenture;
such Additional Collateral shall immediately form part of the Collateral
and become subject to the Security Interest.
12. At any time and from time to time, provided that no Event of Default under
this Debenture has occurred and is continuing, upon receiving:
(a) an Officer's Certificate dated the date of delivery thereof:
(i) requesting that the items of Collateral
specifically enumerated therein (the "Released Collateral") be
released from the Security Interest;
<PAGE> 17
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(ii) stating that no Default or Event of Default has
occurred and is continuing; and
(iii) specifying the aggregate Market Value of the
Collateral, excluding the Released Collateral, on such date;
and
(b) an Appraiser's Certificate, dated of even date with the
Officer's Certificate referred to in paragraph (a) of this section
14, verifying the aggregate Market Value of the Collateral,
excluding the Released Collateral, on such date as specified in the
Officer's Certificate referred to in paragraph (a) of this section
14;
the Holder shall, provided that the aggregate Market Value of the Collateral,
excluding the Released Collateral, specified in such certificate and as
verified in the Appraiser's Certificate, is not less Canadian $3,000,000, at
the expense of the Company, promptly release the Released Collateral from the
Security Interest and deliver the certificates representing the same to the
Company and cancel and discharge the Security Interest insofar as it relates to
the Released Collateral and execute and deliver to the Company such deeds or
other instruments as may be required to so cancel and discharge the Security
Interest and to release to the Company in transferable form the Released
Collateral free and clear from the security constituted hereby.
13. In this Debenture and any amendments hereto, the following terms shall have
the following meanings, respectively:
(a) "ACT" means the Personal Property Security Act (Ontario), as
now in effect, or any legislation that may be substituted therefor,
and as the same may from time to time hereafter be amended;
(b) "ADDITIONAL COLLATERAL" has the meaning ascribed thereto in
section 11 hereof;
<PAGE> 18
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(c) "APPRAISER'S CERTIFICATE" means a certificate signed by an
Independent Appraiser in a form satisfactory to the Holder (acting
reasonably), together with detailed working papers in support of the
conclusion set out in such certificate;
(d) "BUSINESS DAY" means a day of the year other than a Saturday,
a Sunday or a day observed as a statutory holiday in Ontario;
(e) "COLLATERAL" means the Intek Shares and any securities issued
on the exercise, conversion or exchange thereof or upon a Capital
Reorganization or any other security or property derived therefrom
and any other securities or instruments deposited or delivered by
the Company with or to the Holder hereunder;
(f) "DEFAULT" means an event which with the passage of time or
the giving of notice or both would constitute an Event of Default;
(g) "EVENT OF DEFAULT" has the meaning ascribed thereto in
section 3 hereof;
(h) "INDEPENDENT APPRAISER" means an independent member of the
Investment Dealers Association of Canada selected by the Company;
(i) "LONDON BANKING DAY" means a day which is both a Business Day
and a day on which banks are open for business in London, England
and on which dealings in United States dollar deposits are
transacted in the London interbank market;
(j) "LONDON INTERBANK OFFER RATE" means (a) for the period from
and including the date hereof to, but excluding, May 1, the rate of
5.56250% per annum (calculated on the basis of a 360-day year) and,
(b) with respect to any other determination of such rate to be made
by the Holder on any day, the rate (for deposits in United States
Dollars and calculated on the basis of a 360-day year) quoted by
Bloomberg
<PAGE> 19
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Financial Markets service as being the British Bankers' Association
rate for a period of approximately three months (or a rate quoted
by a similar successor organization or successor service acceptable
to the Holder, acting reasonably) as of 11:00 a.m., London time, on
such day;
(k) "MARKET VALUE" means:
(i) with respect to any security on any date, the
simple average of the following prices for the thirty
consecutive Business Days immediately preceding such date:
(I) if such security is listed on NASDAQ;
(A) the closing price of the security for each day that
there has been trading; (B) the simple average of the
bid and ask prices for each day on which there was no
trading; or (C) if there is no closing price or bid and
ask price on the thirty preceding Business Days, the
fair market value thereof as determined by an
Appraiser's Certificate; or
(II) if such security is not listed on
NASDAQ, but quotations with respect thereto are publicly
reported, the Market Value thereof shall be determined
by applying the provisions of subparagraph (I) above
mutatis mutandis; and
(ii) with respect to all other Collateral, the Market
Value shall be the fair market value thereof in Canadian
dollars as determined by an Appraiser's Certificate;
For the foregoing purposes "fair market value" means the highest
price available on an open and unrestricted market between informed
prudent parties acting at arm's
<PAGE> 20
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length and under no compulsion to act, expressed in terms of money
or money's worth;
(l) "OBLIGATIONS" means all liabilities and obligations of any
kind or nature now or at any time and from time to time owing by the
Company to the Holder pursuant to or by virtue of this Debenture;
(m) "OFFICER'S CERTIFICATE" means a certificate in writing signed
by any two of the senior officers of the Company one of which must
be the President or Chief Executive Officer of the Company;
(n) "PROCEEDS" means identifiable or traceable personal property
in any form (including money) derived, directly or indirectly, from
any dealing with the Collateral or proceeds therefrom and includes
any payment that indemnifies or compensates for loss or damage to
the Collateral or Proceeds therefrom;
(o) "RELEASED COLLATERAL" has the meaning ascribed thereto in
section 12 hereof;
(p) "SECURITY INTEREST" has the meaning ascribed thereto in
section 2 hereof; and
(q) "SIGNIFICANT SUBSIDIARY" means any subsidiary of the Company
the assets of which represent greater than 20% of the consolidated
assets of the Company and the sales and operating revenues of which
represent greater than 20% of the consolidated sales and operating
revenues of the Company.
14. All communications (including, without limitation, any demand for payment
hereunder) shall be effectively given if (i) delivered by hand, (ii) sent by
electronic or facsimile communication, or (iii) sent by prepaid courier service
addressed to the Company at 5255 Yonge Street, Willowdale, Ontario, M2N 6P4,
Attention: David O'Kell (Facsimile (416) 221-3800) or to the Holder at Octagon
<PAGE> 21
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Limited, 2nd Floor, Pollet House, Lower Pollet, St. Peter Port, Guernsey,
Channel Islands, Attention: Bernard Saunders (Facsimile 011 481 729331), with
a copy to Octagon Capital Canada Corporation, Suite 406, 181 University Avenue,
Toronto, Ontario, M5H 3M7, Attention: Laurence P. Haughton (Facsimile (416)
368-3811).
Any notice so given shall be deemed conclusively to have been given and
received when so delivered by hand or sent by electronic communication or
facsimile or on the second day following the sending thereof by courier. Any
other party may change any particulars of its address for notice to the other
in the manner aforesaid.
15. Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Debenture and, in case of any
such loss, theft or destruction of this Debenture, upon delivery of an
indemnity reasonably satisfactory to the Company in form and amount or, in the
case of any such mutilation, upon surrender of this Debenture for cancellation
at the offices of the Company, the Company at its expense will make and deliver
a new Debenture of like tenor in lieu of such lost, stolen, destroyed or
mutilated Debenture.
16. The Holder may compound, compromise, grant extension, take and give up
securities, accept compositions, grant releases and discharges and otherwise
deal with the Company and others and the Collateral as it sees fit without
prejudice to any of its rights hereunder. The Holder need not see to the
exercise of any option or right in connection with the Collateral and need not
protect or preserve it from, and is hereby released from all responsibility
for, depreciation in or loss of value of the Collateral and the Holder shall be
bound to exercise in the keeping of the Collateral only the same degree of care
as if it were the property of the Holder. No remedy hereby conferred upon or
reserved to the Holder for the realization of the Collateral, enforcement of
rights of the Holder or otherwise is intended to be exclusive of any other
remedy or remedies hereunder or any other security held hereto and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or under any other document or agreement in respect of
the amounts owing by the Company to the Holder. The taking of any action or
proceedings or refraining
<PAGE> 22
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from doing so or any other dealings with any other security for the money
hereby secured, shall not release or affect the security hereunder. This
Debenture and the security hereunder are in addition to and not in substitution
for any other security held by the Holder and shall not operate as a merger of
any debt or suspend the fulfilment of or affect the rights, remedies and powers
of the Holder in respect of the Obligations or any security held by the Holder
for the fulfilment thereof.
17. This Debenture and any covenants and agreements of the Company herein shall
be binding upon and enforceable against the Company and its successors and
assigns and shall enure to the benefit of the Holder and its successors and
assigns provided that the Holder (and any successor and assign of the Holder)
may not assign its rights and obligations hereunder or any beneficial interest
therein to any person, corporation, or other entity (i) which is a resident of
Canada, (ii) which is a U.S. Person (as that term is defined in Rule 902(c) of
the Securities Act of 1993, as amended, of the United States of America), (iii)
whose identity, residency or relationship with Intek would cause the Company
not to be able to comply with section 5 hereof in circumstances where it would
be able to comply with such provision if the Debenture were not so assigned, or
(iv) in circumstances where if such person, corporation or other entity was the
holder of this Debenture, the Company would, upon exercise by the Holder of its
rights under section 5 of this Debenture, be compelled to make filings with
regulatory authorities or take other action at its cost or which would be
detrimental to it unless such person, corporation or other entity or the Holder
fully indemnifies the Company for all such costs and other matters, without the
written consent of the Company.
18. This Debenture shall be governed by and constructed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
19. The Company covenants and agrees that, to the fullest extent permitted by
the law, it shall make all payments hereunder without regard to any defence,
counterclaim or right of set-off available to it other than under this
Debenture and that any permitted assignee of the Holder shall have all of the
Holder's rights and remedies under this Debenture.
<PAGE> 23
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20. This Debenture restates and amends the Debenture in the principal amount of
U.S.$2,500,000 issued by the Company on September 15, 1995 (the "Original
Debenture"). The Original Debenture shall govern the rights and obligations of
the Company and the Holder prior to the date hereof and this Debenture shall
govern such rights and obligations from and after the date hereof.
IN WITNESS WHEREOF the Company caused its corporate seal to be hereunto
affixed and this Amended and Restated Debenture to be duly executed this 7th
day of February, 1997.
SIMMONDS CAPITAL LIMITED
Per:____________________________________
David O'Kell
Executive Vice-President c/s
