InterTAN, Inc. - Page 14

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                    Royal Bank account] in repayment of a loan.                       
               3.   InterTAN’s enclosed cheque [dated June 30, 1993]                  
                    in the amount of US$20,000,000.00 is to be depos-                 
                    ited into account number 302-8529-6 in combination                
                    for the issuance of InterTAN Canada Ltd. preferred                
               4.   The enclosed cheque [dated June 29, 1993] in the                  
                    amount of [US]$20,000,000.00 drawn on account                     
                    number 302-8529-6 is to then be deposited in                      
                    InterTAN’s account number 302-0402-4 in payment                   
                    for the redemption of 200,000 InterTAN Canada Ltd.                
                    preferred shares.                                                 
               On June 30, 1993, pursuant to the June 30, 1993 letter, the            
          following actions occurred:                                                 
               1.  A check dated June 29, 1993, drawn upon ITC’s Royal Bank           
          account and payable to petitioner in the amount of $20 million,             
          was presented to Royal Bank.  Pursuant to the June 30, 1993                 
          letter, Royal Bank deposited that check into petitioner’s Royal             
          Bank account.  Royal Bank honored that check, which resulted in             
          an overdraft of $19,379,772.65 in ITC’s Royal Bank account (ITC’s           
          overdraft) as of the close of business on June 30, 1993.  Royal             
          Bank permitted ITC’s overdraft because:  (1) Pursuant to the                
          guarantee and assignment agreement, all indebtedness and liabili-           
          ties of ITC to petitioner were assigned to Royal Bank (assign-              
          ment) and were postponed to any debt and liabilities of ITC to              
          Royal Bank, including any funds advanced under any line of credit           
          by Royal Bank to ITC (postponement), and petitioner was required            
          to hold in trust for and pay to Royal Bank any money that it                
          received from ITC; (2) petitioner and ITC made a commitment to              

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