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                                                                    EXHIBIT 10.1


                             FORBEARANCE AGREEMENT



         THIS AGREEMENT made the 11th day of August, 1997.


BETWEEN:
                           LAURENTIAN BANK OF CANADA

                                HEREINAFTER CALLED THE SECURED PARTY OR THE BANK

                                     -AND-

                           STRIKER PAPER CANADA, INC.


                                                 HEREINAFTER CALLED THE CUSTOMER


WHEREAS the Customer is indebted to the Secured Party in the amounts
acknowledged below;

AND WHEREAS the Secured Party has demanded payment and delivered a Notice of
Intention pursuant to the Bankruptcy and Insolvency Act;

AND WHEREAS the Secured Party has agreed with the Customer to forbear in the
enforcement of its demands and in the realization of its security in accordance
with the conditions & understandings herein contained;

NOW THEREFORE in consideration of the mutual acknowledgements covenants and
agreements herein contained, the parties do agree as follows;

THE DEBT

1.     The Customer acknowledges and agrees that it owed the sum of
       $1,722.646.48, as of July 15, 1997, made up as follows;

         (I) STRIKER PAPER CANADA, INC.

                 TERM LOAN 1:
                 Balance owing as at July 15, 1997 is:



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                                      -2 -

                   Principal:                 $400,000.04
                   Interest to July 15, 1997  $  8,406.33
                                              -----------
                   Total Owing  ..............$408,406.37
                                              ===========
                   (per diem interest rate $        )





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         (ii)    STRIKER PAPER CANADA, INC.

                 TERM LOAN 2:
                 Balance owing as at July 15, 1997 IS:

                 Principal:                    $799,999.96
                 Interest to July 15, 1997     $ 12,149.12
                                               -----------
                 Total owing ..................$812,149.08
                                               -----------
                 (per diem interest rate $116.58)


         (iii) Striker Canada, Inc.

                 LINE OF CREDIT:
                 Balance owing as at July 15, 1997 is:

                 Principal:                    $500,606.48
                 Interest to July 15, 1997     $  1,484.55
                                               -----------
                 Total Owing...................$ 50,091.03
                                               -----------
                 (per diem INTEREST RATE $100.32)

2.     The Customer acknowledges that costs and interest continue to accrue at
       the respective per diem rates and interest rates indicated for each of
       the said Loans, and in accordance with the Customers loan and banking
       arrangements with the Secured Party.

3.     The Customer agrees to pay the Secured Party's legal fees and
       disbursements associated with this Forbearance Agreement and all matters
       arising therefrom including any default hereunder, on a solicitor and
       client basis.  The Customer also agrees to pay the Secured Party's
       consulting fees to date and in the future.  All of these shall be added
       to and become part of the Debt, and shall be secured by the Security.

4.     All of the liabilities, obligations and indebtedness referred to herein
       or created by this agreement, and any obligations arising after the date
       of this agreement, (including but not limited to interest), are
       sometimes collectively referred to herein as the "Debt" or
       "Indebtedness".


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THE SECURITY

5.     The Secured Party's Security, sometimes collectively referred to herein
       as the "Security" includes, without limitation;

       i.        General Security Agreement given by Striker Paper Canada,
       Inc., in favour of Laurentian Bank of Canada, being duly registered
       under the provisions of the Personal Property Security Act on June 21,
       1995 as number 950621 0854 1295 0294, which was assigned to Laurentian
       Bank of Canada on April 11, 1996, by Financing Change Statement
       registered under the provisions of the Personal Property Security Act as
       number 960411 1536 0043 1439.

       ii.     Specific Security Agreement given by Striker Paper Canada,
       Inc., in favour of Laurentian Bank of Canada, being duly registered
       under the provisions of the Personal Property Security Act on June 21,
       1995 as number 950621 0852 1295 0293, which was assigned to Laurentian
       Bank of Canada on April 11, 1996, by Financing Change Statement
       registered under the provisions of the Personal Property Security Act
       as number 960411 1536 0043 1438.
       
       iii.    Debenture given by Striker Paper Canada, Inc., in favour of
       Laurentian Bank of Canada, being duly registered in the Land Registry
       Office for the Registry Division of Niagara South (No. 59) as
       instrument number 691946 and registered under the provisions of the
       Personal Property Security Act on June 21, 1995 as number 95O621 0857
       1295 0295, which was assigned to Laurentian Bank of Canada on April
       11, 1996, by Financing Change Statement registered under the
       provisions of the Personal Property Security Act as number 960411 1536
       0043 1440.
       
       
       iv.     Guarantee from Striker industries, Inc., dated July 13, 1995.
       
       v.      Hypothecation of Specific Securities from Striker industries,
       Inc., dated July 13, 1995.

       vi.     Hypothecation OF Specific Securities from Striker Paper Canada,
       Inc., dated July 13, 1995.

       vii.    Guarantee from Ontario Development Corporation, dated August 17,
       1995.

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       viii.   Any other security for the Debt now held or hereafter taken by
       the Secured Party.

STATUS, INCLUDING INCIDENCES OF DEFAULT

6.     Demand for payment of the Loans from the Customer were made by the
       Secured Party in writing dated on July 15, 1997, the receipt of which is
       hereby acknowledged by the Customer.

7 .    Notice of Intention to Enforce Security pursuant to s. 244(1) of the
       Bankruptcy and Insolvency Act dated July 25, 1997, was sent by the
       Secured Party, the receipt of which is hereby acknowledged by the
       Customer.

8.     All of the Indebtedness referred to in the demands remain outstanding
       and unsatisfied.

ACKNOWLEDGEMENTS AND AGREEMENTS

9.     The Customer acknowledges and agrees, and THE Bank concurs with the
       Customer;

       (a)       that all of the Security and an Offer to Finance, dated May
                 16, 1995 (accepted by the Company on May 23, 1995) is valid and
                 subsisting and binding in accordance with the terms contained 
                 therein;

       (b)       that the within recitals are true and correct;

10.    The Customer agrees to do the following, (on an ongoing basis where
       appropriate to the context);

       (a)       to pay the sum of $124,000.00 by August 11, 1997, to be
                 applied on account of arrears of payments on the Loans,

       (b)       to pay the sum of $176,000.00 by August 29, 1997 as a
                 prepayment of the regular monthly payments, up to the payments
                 due on February 1, 1998.

       (c)       to co-operate fully with anyone engaged by the Secured Party
                 to inspect its assets and property and/or to provide 
                 valuations and/or appraisals of the properties;
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       (d)       not to sell, mortgage or otherwise dispose of any substantial
                 asset by any single transaction or series of without notifying
                 and obtaining approval from the Secured Party.

       (e)       to make all of the payments to the City Of Thorold on account
                 of property taxes, in accordance with a Memorandum of
                 Agreement dated May 16, 1997, and to forthwith provide
                 evidence to the Secured Party after each of the payments.

11.    Default by the Customer in this agreement is defined as;

       (a)       any breach by the Customer of any Of the terms of this
                 agreement, or

       (b)       breach of the terms, or default, of any of the Security, or

       (c)       any act of bankruptcy, within the meaning of the Bankruptcy
                 and Insolvency Act, or

       (d)       entry of a final judgment against the Customer by any other
                 creditor or claimant for an amount exceeding $25,000.00, or a
                 number of such judgments exceeding in the aggregate
                 $100,000.00 (provided also that the Customer covenant and
                 agree to notify the Bank forthwith should they be served with
                 any legal process indicating commencement of proceedings), or

       (e)       the commencement of any sale proceedings or realizations on
                 account of the Customer default in any mortgage or security
                 affecting the lands or assets covered by the Security.

12.    The Customer warrants, and the Bank concurs with Customer, that it is
       aware of only the following breaches of the security and its loan and
       banking agreements with the Bank, save and except as follows;
       
       (a)     non-payment of scheduled loan installments,
       
       (b)     non receipt of financial statements
       
       (c)     non-payment OF taxes,
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       (d)     failing to maintain Working Capital, Current Ratio, Tangible
               Net Worth, Interest Coverage and Cash Flow as required by the
               Offer to Finance from the Bank dated May 16, 1995.

13.    The Secured Party agrees to forbear until September 1, 2000 from
       taking any further action to enforce its demands or the Security, on
       condition that the Customer;

       (a)     resumes regular monthly payments on the loan accounts from and
               after March 1, 1998.

       (b)     is not in default as defined in this Agreement, the Security
               or the Offer to Finance, due to an event occurring subsequent
               to the date hereof,

       (c)     provides current unaudited monthly financial statements by
               September 15, 1997 and thereafter continues to provide current
               financial statements and financial information as required by
               its present agreements and arrangements with the Bank or as
               may be required by the Bank form time to time,

       (d)     honours all of the other conditions and requirements of its
               arrangements with the Bank, to be performed subsequent to the
               date hereof, excepting only those which have been specifically
               waived by this agreement and excepting the breaches mentioned
               in paragraph #12(d), with respect to which the Bank by this
               agreement waives strict compliance.

14.    The Customer agrees that if it is default, then the Secured Party may
       immediately proceed to enforce the Security and exercise any other
       remedies the Secured Party may have by agreement or in law.



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15.      The Customer further covenant and agree that:

         (a)     upon written request from the Secured Party, to provide all
                 such documentation and information as may be reasonably
                 necessary to permit the secured Party to evaluate the
                 Customers position or to enforce this Forbearance Agreement
                 and the Security;

         (b)     to execute all such further documentation as may be necessary
                 to evidence and give effect to the terms of this Forbearance
                 Agreement.

16.      The customer acknowledges and agrees that this Forbearance Agreement
         and the terms and provisions contained herein, shall in no way affect
         any of the Customer's continuing obligations to the Secured Party
         which may have arisen from any other loans not specifically referred
         to herein.

17.      This Agreement shall enure to the benefit of and be binding upon the
         heirs, executors, administrators, committees, curators, successors,
         assigns, receivers, trustees in bankruptcy, liquidators and any other
         legal representatives of the parties hereto.  Any reference to a
         person herein shall include their heirs, executors and administrators.

18.      The parties hereto agree that the execution and delivery of the within
         Agreement and delivery of all notices and communications hereunder,
         may be made by facsimile machine, addressed to the parties hereto at
         the address specified herein.

19.      Words importing the singular number only include the plural and vice
         versa and words importing gender shall include all genders and words
         importing person including individuals, partnerships, corporations,
         trusts, unincorporated associations, joint ventures, government
         agencies and other entities.

20.      If any provision of this Agreement or portion thereof, or the
         application thereof to any person or circumstances shall, to any
         extent, be invalid or unenforceable, the remainder of this Agreement
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         or the application of such provision or portion thereof to any other
         persons or circumstances shall not be affected thereby and each
         provision OF this Agreement shall be valid and enforceable to the
         fullest extent permitted by law.

21.      This Forbearance Agreement constitutes the entire agreement between
         the parties relating to the Bank's forbearance and contains all of the
         representations, undertakings and agreements of the respective
         parties.  There are no other verbal representations, undertakings or
         agreements regarding the forbearance except as contained herein.  No
         modification or alteration of the Agreement shall be binding unless
         executed in writing by the parties hereto.

22.      Ontario Development Corporation has joined in this agreement to
         evidence its consent to the arrangements and to acknowledge that this
         Forbearance Agreement will not affect its guarantee of the Customer's
         Debt to the Bank, nor otherwise affect its commitments to any of the
         Parties.

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

       IN WITNESS WHEREOF the parties hereto have duly executed and delivered
this Agreement on the day and year first above written.

SIGNED, SEALED AND DELIVERED    )    Striker Canada, Inc.
                                )
         in the presence of     )     per:_________________________
                                )
                                )
                                )     Striker Industries, Inc.
                                )
                                )
                                )     per:_________________________
                                )
                                )     I HAVE AUTHORITY TO BIND THE CORPORATION.
                                )
                                )     Laurentian Bank of Canada
                                )
                                )     Per:__________________________



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                              )     
                              )       Per:__________________________
                              )       
                              )            
                              )            
                              )       Ontario Development Corporation
                              )       
                              )            
                              )            
                              )       Per:___________________________