Exhibit 10.9


    
      

    

     

    Exhibit
      10.9

     

     

    
      	 	
	 	
               

              South
                Central Ontario Region

              381
                King St. W. & Francis St., 2nd Fl.

              Kitchener,
                Ontario

              N2G
                1B8

               

              Telephone
                No.: (519) 570-7322

              Fax
                No.: (519) 579-2610

            


    

     

    February
      19, 2007

     

    Franklin
      Covey Canada, Ltd.

    60
      Struck
      Crt

    Cambridge,
      ON  N1R 8L2

     

     

    Attn:
      Mr.
      Mark Pallin,

     

    Dear
      Sir,

     

    We
      are
      pleased to offer the Borrower the following credit facilities (the
      "Facilities"), subject to the following terms and conditions.

     

    
      	
              BORROWER 

               

            	
              (the
                "Borrower")

               

            
	
              LENDER

               

            	
              The
                Toronto-Dominion Bank
                (the "Bank"), through its South Central Ontario Region branch, in
                Kitchener, Ontario.

               

            
	
              CREDIT
                LIMIT

               

               

            	
              1) CDN
                $500,000

              
                2)
                  CDN $895,253 as reduced pursuant to the section headed "Repayment
                  and
                  Reduction of Amount of Credit Facility".

                 

              

            
	TYPE
              OF CREDIT AND
              BORROWING OPTIONS 	
              1)
                Operating
                Loan
                available at the Borrower's option by way of:

                       
                Prime Rate Based Loans in CDN$ ("Prime Based Loans")

               

              
                2)
                  Committed
                  Reducing Term Facility (Single
                  Draw)available
                  at the Borrower's option by way of:

                         
                  Fixed Rate Term Loan in CDN$

                         
                  Floating Rate Term Loan available by way of:

                                   
                  Prime Rate Based Loans in CDN$ ("Prime Based
                  Loans")

              

            
	
               

            	 
	
              PURPOSE 

            	
              1)
                Working Capital

              
                2)
                  Real Estate Financing

              

            
	 	 
	
              TENOR

            	
              1)
                Uncommitted

              2)
                Committed

               

            
	
               

            	 
	
              CONTRACTUAL
                TERM

            	
              1)
                No term

              2)
                March 15, 2009

               

            
	 	 
	
              RATE
                TERM (FIXED
                RATE TERM
                LOAN)

            	
              1)
                No term

              2)
                Fixed rate: 6 month, 1-3 years but never to exceed the Contractual
                Term Maturity Date

                 
                Floating rate: No term 

               

            
	 	 
	
              AMORTIZATION

            	
              2)
                15 years to January 2015

               

            
	 	 
	INTEREST
              RATES AND
              FEES 	
              Advances
                shall bear interest and fees as follows:

               

              1)
                Operating
                Loan:

              Prime
                Based Loans: Prime Rate + 0% per
                annum

              2)
                Committed
                Reducing Term Facility: 

              Fixed
                Rate Term Loans: As determined by the
                Bank, in its sole discretion, for the Rate Term selected bythe Borrower,
                and as set out in the Rate and Payment Terms Notice applicable to
                that
                Fixed Rate Term Loan.

                         
                Floating Rate Term Loans available by way of:

                         
                Prime Based Loans: Prime Rate + 0% per annum

               

              For
                all Facilities, interest payments will be made in accordance with
                Schedule
                "A" attached hereto unless otherwise stated in this Letter or in
                the Rate
                and Payment Terms Notice applicable for a particular drawdown. Information
                on interest rate and fee definitions, interest rate calculations
                and
                payment is set out in the Schedule "A" attached hereto.

            
	 	 
	
              DRAWDOWN 

            	
              1)
                On a revolving basis.

              2)
                Fully drawn. Amounts repaid may not be redrawn.

            
	 	 
	
              BUSINESS
                CREDIT SERVICE 

               

            	
              The
                Borrower will have access to the Operating Loan (Facility 1) via
                Loan
                Account Number 9327791-2752 (the "Loan Account") up to the Credit
                Limit of
                the Operating Loan by withdrawing funds from the Borrower's Current
                Account Number 327791-2752 (the "Current Account"). The Borrower
                agrees
                that each advance from the Loan Account will be in an amount equal to
                $10,000 (the "Transfer Amount") or a multiple thereof. If the Transfer
                Amount is NIL, the Borrower agrees that an advance from the Borrower's
                Loan Account may be in an amount sufficient to cover the debits made
                to
                the Current Account.

               

              The
                Borrower agrees that:

              a)
                all other overdraft privileges which have governed the Borrower's
                Current
                Account are hereby cancelled.

              b)
                all outstanding overdraft amounts under any such other agreements
                are now
                included in indebtedness under this Agreement.

               

              The
                Bank may, but is not required to, automatically advance the Transfer
                Amount or a multiple thereof or any other amount from the Loan Account
                to
                the Current Account in order to cover the debits made to the Current
                Account if the amount in the Current Account is insufficient to cover
                the
                debits. The Bank may, but is not required to, automatically and without
                notice apply the funds in the Current Account in amounts equal to
                the
                Transfer Amount or any multiple thereof or any other amount to repay
                the
                outstanding amount in the Loan Account.

            
	 	 
	
              REPAYMENT
                AND REDUCTION
                OF AMOUNT
                OF CREDIT FACILITY 

            	
              1)
                On demand. If the Bank demands repayment, the Borrower will pay to
                the
                Bank all amounts outstanding under the Operating Loan.

              2)
                All amounts outstanding will be repaid on or before the Contractual
                Term
                Maturity Date. The drawdown will be repaid in equal monthly payments.
                The
                details of repayment and interest rate applicable to such drawdown
                will be set out in the" Rate and Payment Terms Notice" applicable
                to that
                drawdown. Any amounts repaid may not be reborrowed.

            
	 	 
	
              SECURITY

            	
              The
                following security shall be provided, shall, unless otherwise indicated,
                support all present and future indebtedness and liability of the
                Borrower
                and the grantor of the security to the Bank including without limitation
                indebtedness and liability under guarantees, foreign exchange contracts,
                cash management products, and derivative contracts, shall be registered
                in
                first position, and shall be on the Bank's standard form, supported
                by
                resolutions and solicitor's opinion, all acceptable to the
                Bank:

               

              a)
                General Security Agreement ("GSA") representing a first charge on
                all the
                Borrower’s assets and undertakings with SLO and Resolution

              b)
                General Assignment of Fire Insurance.

              c)
                Continuing Collateral Mortgage, representing a first charge, on real
                property located at 60 Struck Court, Cambridge, Ontario, in the principal
                amount of $1,500,000, beneficially owned by and registered in the
                name of
                Franklin Covey Canada, Ltd. 

              d)
                Guarantee of Advances from Franklin Covey Co.

                       Limited
                $1,500,000

               

              All
                persons and entities required to provide a guarantee shall be referred
                to
                herein individually as a "Surety" and/or "Guarantor" and collectively
                as
                the "Guarantors". 

               

              All
                of the above security and guarantees shall be referred to collectively
                in
                this Agreement as "Bank Security". 

            
	 	 
	
              DISBURSEMENT
                CONDITIONS 

            	
              The
                obligation of the Bank to permit any drawdown hereunder is subject
                to the
                Standard Disbursement Conditions contained in Schedule "A" and the
                following additional drawdown conditions:

               

              a)
                Borrower Questionnaire and Site Visit to be completed satisfactory
                to the
                Bank.

              b)
                Accountant Prepared Financial statements for the year ended Aug 31,
                2006
                are to be provided to the bank with no material change from management
                prepared statements.

              c)
                Management prepared interim financial statements for the most recent
                period ended are to be provided to the bank.

              d)
                Borrower to commit to transferring all day-to-day banking to
                TDBFG.

            
	 	 
	
              REPRESENTATIONS
                AND
                WARRANTIES

            	
              All
                representations and warranties shall be deemed to be continually
                repeated
                so long as any amounts remain outstanding and unpaid under this Agreement
                or so long as any commitment under this Agreement remains in effect.
                The
                Borrower makes the Standard Representations and Warranties set out
                in
                Schedule "A".

               

            
	 	 
	
              POSITIVE
                COVENANTS 

            	
              So
                long as any amounts remain outstanding and unpaid under this Agreement
                or
                so long as any commitment under this Agreement remains in effect,
                the
                Borrower will and will ensure that its subsidiaries and each of the
                Guarantors will observe the Standard Positive Covenants set out in
                Schedule "A" and in addition will: 

               

              a)
                provide to the Bank annually, Audited year end financial statements
                for
                Franklin Covey Co. within 120 days of each fiscal year end, 

              b)
                provide to the Bank annually, Accountant Prepared Notice to Reader
                Financial Statements for Franklin Covey Canada, Ltd. , within 120
                days of
                each fiscal year end, 

              c)
                obtain prior approval from the Bank and it's solicitor, for any lease
                or
                easement that would restrict use of the property. Approval not to
                be
                unreasonably withheld.

            
	 	 
	
              NEGATIVE
                COVENANTS 

            	
              So
                long as any amounts remain outstanding and unpaid under this Agreement
                or
                so long as any commitment under this Agreement remains in effect,
                the
                Borrower will and will ensure that its subsidiaries and each of the
                Guarantors will observe the Standard Negative Covenants set out in
                Schedule "A". In addition the Borrower will not and will ensure that
                its
                subsidiaries and each of the Guarantors will not:

               

              a)
                allow the subject property herein to be further
                encumbered.

            
	 	 
	
              REPORTING

            	
              The
                Borrower acknowledges that the financial reporting obligations contained
                herein, including the submission of the financial statements to the
                Bank
                on a timely basis, constitute a material condition precedent to the
                Bank
                providing the credit facilities contemplated herein. Should the Borrower
                fail to fulfill such obligations within the delays set forth herein
                and
                such default is not remedied within 10 days from the date of the
                Bank's
                written notice to the Borrower setting forth the nature of the default,
                then the Borrower shall be deemed to have committed an "Event of
                Default"
                as hereinafter defined.

               

              Notwithstanding
                the foregoing, and without prejudice to and under strict reserve
                thereof,
                of any rights and recourses the Bank may have in the circumstances,
                the
                Bank shall nevertheless have the right to engage, at the Borrower's
                expense, an independent auditor to examine the Borrower's books,
                records
                and physical assets, and perform such tests and analysis and such
                other
                verifications as the Bank may, in its sole discretion, determine
                necessary
                to assess its loan risk and realizable value of the
                Security.

            
	 	 
	
              PERMITTED
                LIENS

            	
              Permitted
                Liens as referred to in Schedule "A" are:

               

              Purchase
                Money Security Interests in equipment which Purchase Money Security
                Interest exists on the date of this Agreement ("Existing PMSIs")
                which are
                known to the Bank and all future Purchase Money Security Interests
                on
                equipment acquired to replace the equipment under Existing PMSIs,
                provided
                that the cost of such replacement equipment may not exceed the cost
                of the
                equipment subject to the Existing Lien by more than 10%.
                

            
	 	 
	
              FINANCIAL
                COVENANTS 

            	
              The
                Borrower agrees at all times to:

               

              a)
                maintain a Debt Service Coverage ratio, of not less than 1.25:1.
                Tested
                Annually. 

               

              The
                Debt
                Service Coverage
                ratio to be calculated as follows:

               

              
                EBITDA
                  - Any Capital Cash Outflows to related company (Dividends, Shareholder
                  loans, etc.) - Capital Expenditures

                
                  Principal
                    + Interest 

                   

                  
                    EBITDA
                      is
                      defined as Earnings Before Interest, Income Taxes, Depreciation,
                      and
                      Amortization.

                  

                

              

            
	 	 
	
              EVENTS
                OF DEFAULT

            	
              The
                Bank may accelerate the payment of principal and interest under any
                committed credit facility hereunder and cancel any undrawn portion
                of any
                committed credit facility hereunder, at any time after the occurrence
                of
                any one of the Standard Events of Default contained in Schedule "A"
                attached hereto.

            
	 	 
	
              ANCILLARY
                FACILITIES

            	As
              at the date of this Agreement, the following uncommitted ancillary
              products are made available. These products may be subject to other
              agreements.
               

              1)
                TD Visa Business cards.

              2)
                Spot Foreign Exchange Facility which allows the Borrower to enter
                into
                US$1,000,000 for settlement on a spot basis.

              3)
                Certain treasury products, such as forward foreign exchange
                transactions.

               

              The
                Borrower agrees that treasury products will be used to hedge its
                risk and
                will not be used for speculative purposes.

               

              The
                paragraph headed "FX CLOSE OUT" as set out in Schedule "A" shall
                apply to
                FX Transactions.

            
	 	 
	
              AVAILABILITY
                OF OPERATING
                LOAN

            	
              The
                Operating Loan is uncommitted, made available at the Bank's discretion,
                and is not automatically available upon satisfaction of the terms
                and
                conditions, conditions precedent, or financial tests set out
                herein.

               

              The
                occurrence of an Event of Default is not a precondition to the Bank's
                right to accelerate repayment and cancel the availability of the
                Operating
                Loan.

            
	 	 
	
              SCHEDULE
                "A" - STANDARD
                TERMS
                

              AND
                CONDITIONS 

            	
              Schedule
                "A" sets out the Standard Terms and Conditions ("Standard Terms and
                Conditions") which apply to these credit facilities. The Standard
                Terms
                and Conditions, including the defined terms set out therein, form
                part of
                this Agreement, unless this letter states specifically that one or
                more of
                the Standard Terms and Conditions do not apply or are
                modified.

            
	 	 
	 	 


    

    
    

    We
      trust you will find these facilities helpful in meeting your ongoing financing
      requirements. We ask that if you wish to accept this offer of financing (which
      includes the Standard Terms and Conditions), please do so by signing and
      returning the attached duplicate copy of this letter to the undersigned. This
      offer will expire if not accepted in writing and received by the Bank on or
      before February
      26, 2007.
       

      Yours
        truly, 

    

     

    THE
      TORONTO-DOMINION BANK

     

     

    
      	
              John
                W. Edwards

              Relationship
                Manager

            	
               

            	
               

            	
              Robert
                Lewis

              Manager
                Commercial Credit

            	
               

            	
               

            


    

      

     

     

    TO
      THE TORONTO-DOMINION BANK:

     

     hereby
      accepts the foregoing offer this
            day
      of                           ,
      2007.

     

    
      	
              Signature

            	
               

            	
              Signature

            
	
              Print
                Name & Position

            	
               

            	
              Print
                Name & Position

            


    

     

    cc.
      Guarantor(s)

     

    
      The
        Bank
        is providing the guarantor(s) with a copy of this letter as a courtesy only.
        The
        delivery of a copy of this letter does not create any obligation of the Bank
        to
        provide the guarantor(s) with notice of any changes to the credit facilities,
        including without limitation, changes to the terms and conditions, increases
        or
        decreases in the amount of the credit facilities, the establishment of new
        credit facilities or otherwise. The Bank may, or may not, at its option,
        provide
        the guarantor(s) with such information, provided that the Bank will provide
        such
        information upon the written request of the guarantor.

    

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    
      SCHEDULE
        A

      STANDARD
        TERMS AND CONDITIONS

       

       

      1.INTEREST
        RATE DEFINITIONS

       

      Prime
        Rate means the rate of interest per annum (based on a 365/366 day year)
        established and reported by the Bank to the Bank of Canada from time to time
        as
        the reference rate of interest for determination of interest rates that the
        Bank
        charges to customers of varying degrees of creditworthiness in Canada for
        Canadian dollar loans made by it in Canada.

       

      The
        Stamping Fee rate per annum for CDN$ B/As is based on a 365/366 day year
        and the
        Stamping Fee is calculated on the Face Amount of each B/A presented to the
        Bank
        for acceptance.  The Stamping Fee rate per annum for US$ B/As is based on a
        360 day year and the Stamping Fee is calculated on the Face Amount of each
        B/A
        presented to the Bank for acceptance. 

       

      LIBOR
        means the rate of interest per annum (based on a 360 day year) as determined
        by
        the Bank (rounded upwards, if necessary to the nearest whole multiple of
        1/16th
        of 1%) at which the Bank may make available United States dollars which are
        obtained by the Bank in the Interbank Euro Currency Market, London, England
        at
        approximately 11:00 a.m. (Toronto time) on the second Business Day before
        the
        first day of, and in an amount similar to, and for the period similar to
        the
        interest period of, such advance. 

       

      USBR
        means the rate of interest per annum (based on a 365/366 day year) established
        by the Bank from time to time as the reference rate of interest for the
        determination of interest rates that the Bank charges to customers of varying
        degrees of creditworthiness for US dollar loans made by it in Canada.


       

      Any
        interest rate based on a period less than a year expressed as an annual rate
        for
        the purposes of the Interest Act (Canada) is equivalent to such determined
        rate
        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 in the period upon
        which
        it was based.

       

      2.
        INTEREST CALCULATION AND PAYMENT   

       

      Interest
        on Prime Based Loans and USBR Loans is calculated daily and payable monthly
        in
        arrears based on the number of days  the subject loan is outstanding unless
        otherwise provided in the Rate and Payment Terms Notice. 

       

      The
        Stamping Fee is calculated based on the amount and the term of the B/A and
        payable upon acceptance by the Bank of the B/A. The net proceeds received
        by the
        Borrower on a B/A advance will be equal to the Face Amount of the B/A discounted
        at the Bank's then prevailing B/A discount rate for CDN$ B/As or US$ B/As as the
        case may be, for the specified term of the B/A less the B/A Stamping
        Fee.

       

      Interest
        on LIBOR Loans is calculated and payable on the earlier of contract maturity
        or
        quarterly in arrears, for the number of days in the LIBOR interest
        period.

       

      L/C
        and
        L/G fees are payable at the time set out in the Letter of Credit Indemnity
        Agreement applicable to the issued L/C or L/G.

       

      Interest
        on Fixed Rate Term Loans is compounded monthly and payable monthly in arrears
        unless otherwise provided in the Rate and Payment Terms Notice.

       

      Interest
        is payable both before and after maturity or demand, default and
        judgment.

       

      Each
        payment under this Agreement shall be applied first in payment of costs and
        expenses, then interest and fees and the balance, if any, shall be applied
        in
        reduction of principal.

       

      For
        loans
        not secured by real property, all overdue amounts of principal and interest
        and
        all amounts outstanding in excess of the Credit Limit shall bear interest
        from
        the date on which the same became due or from when the excess was incurred,
        as
        the case may be, until the date of payment or until the date the excess is
        repaid at 21% per annum, or such lower interest rate if the Bank agrees to
        a
        lower interest rate in writing.  Nothing in this clause shall be deemed to
        authorize the Borrower to incur loans in excess of the Credit
        Limit.

       

      3.
        DRAWDOWN PROVISIONS

       

      Prime
        Based and USBR Loans

      There
        is
        no minimum amount of drawdown by way of Prime Based Loans and USBR Loans,
        except
        as stated in the section of the Agreement titled "Business Credit Services
        Agreement", if that section of the Agreement has not been deleted. The Borrower
        shall provide the Bank with 3 Business Days' notice of a requested Prime
        Based
        Loan or USBR Loan over $1,000,000.

       

      B/As

      The
        Borrower shall advise the Bank of the requested term or maturity date for
        B/As
        issued hereunder.  The Bank shall have the discretion to restrict the term
        or maturity dates of B/As. In no event shall the term of the B/A exceed the
        Contractual Term Maturity Date. The minimum amount of a drawdown by way of
        B/As
        is $1,000,000 and in multiples of $100,000 thereafter. The Borrower shall
        provide the Bank with 3 Business Days' notice of a requested B/A
        drawdown.

       

      The
        Borrower shall pay to the Bank the full amount of the B/A  at the maturity
        date of the B/A.

       

      The
        Borrower appoints the Bank as its attorney to and authorizes the Bank to
        (i)
        complete, sign, endorse, negotiate and deliver B/As on behalf of the Borrower
        in
        handwritten form, or by facsimile or mechanical signature or otherwise, (ii)
        accept such B/As, and (iii) purchase, discount, and/or negotiate
        B/As.

       

      LIBOR

      The
        Borrower shall advise the Bank of the requested LIBOR contract maturity
        period.  The Bank shall have the discretion to restrict the LIBOR contract
        maturity.  In no event shall the term of the LIBOR contract exceed the
        Contractual Term Maturity Date.  The minimum amount of a drawdown by way of
        a LIBOR Loan is $1,000,000, and shall be in multiples of $100,000 thereafter.
        The Borrower will provide the Bank with 3 Business Days' notice of a requested
        LIBOR Loan.

       

      L/C
        and/or L/G

      The
        Bank
        shall have the discretion to restrict the maturity date of L/Gs or
        L/Cs.

       

      B/A
        - Prime Conversion

      The
        Borrower will provide the Bank with at least 3 Business Days' notice of its
        intention either to convert a B/A to a Prime Based Loan or vice versa, failing
        which, the Bank may decline to accept such additional B/As or may charge
        interest on the amount of Prime Based Loans resulting from maturity of B/As
        at
        the rate of 115% of the rate applicable to Prime Based Loans for the 3 Business
        Day period immediately following such maturity.  Thereafter, the rate shall
        revert to the rate applicable to Prime Based Loans.

       

      Notice

      Prior
        to
        each drawdown and at least 10 days prior to each Rate Term Maturity, the
        Borrower will advise the Bank of its selection of drawdown options from 
those made available by the Bank.  The Bank will, after each drawdown,
        other than drawdowns by way of BA, LIBOR Loan or under the operating loan,
        send
        a Rate and Payment Terms Notice to the Borrower. 

       

      4.
        PREPAYMENT

       

      (a)    
        10% Prepayment Option Chosen.  If the Borrower has elected a 10% Prepayment
        Option for a Facility the following shall apply to all Fixed Rate Loans made
        under that Facility.  Each calendar year, ("Year"), the Borrower may prepay
        in one lump sum, once each Year, an amount outstanding under a Fixed Rate
        Term
        Loan not exceeding 10% of the original amount of the Fixed Rate Term Loan
        being
        prepaid, upon payment of all interest accrued to the date of prepayment
        ("Prepayment Date") without paying any prepayment charge, provided that an
        Event
        of Default has not occurred.  This privilege is not cumulative from Year to
        Year. 

       

      (b)    
        10% Prepayment Option Not Chosen or Borrower Prepaying More than 10%. 
During each Year, the Borrower may, provided that an Event of Default has
        not
        occurred:

       

      if
        it has
        not chosen the 10% Prepayment Option, prepay all or any part of the principal
        then outstanding under Fixed Rate Term Loans, or,

      if
        it has
        chosen the 10% Prepayment Option, prepay more than 10% of the original amount
        of
        the Fixed Rate Term Loan being prepaid, in any Year, 

       

      in
        either
        case, upon payment of all interest accrued to the Prepayment Date and prepayment
        charges equal to the greater of:

       

      (a)    
        three months' interest on the amount of the prepayment (and in the case where
        the Borrower has chosen the 10% Prepayment Option, the amount of prepayment
        is
        the amount of prepayment exceeding the 10% limit) using the interest rate
        applicable to the Fixed Rate Term Loan being prepaid; and

       

      (b)    
        the Interest Rate Differential, being the amount by which:

       

      the
        total
        amount of interest on the amount of the prepayment using the interest rate
        applicable to the Fixed Rate Term Loan being prepaid calculated for the period
        of time equal to the Remaining Term, exceeds

      the
        total
        amount of interest on the amount being prepaid using the interest rate
        applicable to a fixed rate term loan that the Bank would make to a borrower
        for
        a comparable facility on the Prepayment Date, calculated for the period of
        time
        from the Prepayment Date until the Rate Term Maturity Date for the Fixed
        Rate
        Term Loan being prepaid ("Remaining Term").

       

      5.
        STANDARD DISBURSEMENT CONDITIONS 

       

      The
        obligation of the Bank to permit any drawdowns hereunder at any time is subject
        to the following conditions precedent:

      a)        
        The Bank shall have received the following documents which shall be in form
        and
        substance satisfactory to the Bank:

                 
        i)          A copy of a duly
        executed resolution of the Board of Directors of the Borrower empowering
        the
        Borrower to enter into this Agreement;  

                 
        ii)          A copy of any
        necessary government approvals authorizing the Borrower to enter into this
        Agreement;

                 
        iii)         All of the Bank Security
        and supporting resolutions and solicitors' letter of opinion required
        hereunder;

                 
        iv)         The Borrower's compliance
        certificate certifying compliance with all terms and conditions hereunder;
        

                 
        v)         all operation of account
        documentation; and

                 
        vi)         For drawdowns under the
        Facility by way of L/C or L/G, the Bank’s standard form Letter of Credit
        Indemnity Agreement

      b)        
        The representations and warranties contained in this Agreement are
        correct.

      c)        
        No event has occurred and is continuing which constitutes an Event of Default
        or
        would constitute an Event of Default, but for the requirement that notice
        be
        given or time elapse or both.

      d)        
        The Bank has received the arrangement fee payable hereunder (if any) and
        the
        Borrower has paid all legal and other expenses incurred by the Bank in
        connection with the Agreement or the Bank Security.

       

      6. 
        STANDARD REPRESENTATIONS AND WARRANTIES

       

      The
        Borrower hereby represents and warrants, which  representations and
        warranties shall be deemed to be continually repeated so long as any amounts
        remain outstanding and unpaid under this Agreement or so long as any commitment
        under this Agreement remains in effect, that:

      a)        
        The Borrower is a duly incorporated corporation, a limited partnership,
        partnership, or sole proprietorship, duly organized, validly existing and
        in
        good standing under the laws of the jurisdiction where the Branch/Centre
        is
        located and each other jurisdiction where the Borrower has property or assets
        or
        carries on business and the Borrower has adequate corporate power and authority
        to carry on its business, own property, borrow monies and enter into agreements
        therefore, execute and deliver the Agreement, the Bank Security, and documents
        required hereunder, and observe and perform the terms and provisions of this
        Agreement.

      b)        
        There are no laws, statutes or regulations applicable to or binding upon
        the
        Borrower and no provisions in its charter documents or in any by-laws,
        resolutions, contracts, agreements, or arrangements which would be contravened,
        breached, violated as a result of the execution, delivery, performance,
        observance, of any terms of this Agreement.

      c)        
        No Event of Default has occurred nor has any event occurred which, with the
        passage of time or the giving of notice, would constitute an Event of Default
        under this Agreement or which would constitute a default under any other
        agreement.

      d)        
        There are no actions, suits or proceedings, including appeals or applications
        for review, or any knowledge of pending actions, suits, or proceedings against
        the Borrower and its subsidiaries, before any court or administrative agency
        which would result in any material adverse change in the property, assets,
        financial condition, business or operations of the Borrower.

      e)        
        All material authorizations, approvals, consents, licenses, exemptions, filings,
        registrations and other requirements of governmental, judicial and public
        bodies
        and authorities required to carry on its business have been or will be obtained
        or effected and are or will be in full force and effect.

      f)         
        The financial statements and forecasts delivered to the Bank fairly present
        the
        present financial position of the Borrower, and have been prepared by the
        Borrower and its auditors in accordance with Canadian  Generally Accepted
        Accounting Principles consistently applied.

      g)        
        All of the remittances required to be made by the Borrower to the federal
        government and all provincial and municipal governments have been made, are
        currently up to date and there are no outstanding arrears.  Without
        limiting the foregoing, all employee source deductions (including income
        taxes,
        Employment Insurance and Canada Pension Plan), sales taxes (both provincial
        and
        federal), corporate income taxes, corporate capital taxes, payroll taxes
        and
        Workers' Compensation dues are currently paid and up to date.

       

      7.
        STANDARD POSITIVE COVENANTS

       

      So
        long
        as any amounts remain outstanding and unpaid under this Agreement or so long
        as
        any commitment under this Agreement remains in effect, the Borrower will,
        and
        will ensure that its subsidiaries and each of the Guarantors will:

      a)        
        Pay all amounts of principal, interest and fees on the dates, times and place
        specified herein, under the Rate and Payment Terms Notice, and under any
        other
        agreement between the Bank and the Borrower.

      b)        
        Advise the Bank of any change in the amount and the terms of any credit
        arrangement made with other lenders or any action taken by another lender
        to
        recover amounts outstanding with such other lender.

      c)        
        Advise promptly after the happening of any event which will result in a material
        adverse change in the financial condition, business, operations, or prospects
        of
        the Borrower or the occurrence of any Event of Default or default under this
        Agreement or under any other agreement for borrowed money.

      d)        
        Do all things necessary to maintain in good standing its corporate existence
        and
        preserve and keep all material agreements, rights, franchises, licenses,
        operations, contracts or other arrangements in full force and
        effect.

      e)        
        Take all necessary actions to ensure that the Bank Security and its obligations
        hereunder will rank ahead of all other indebtedness of and all other security
        granted by the Borrower.

      f)         
        Pay all taxes, assessments and government charges unless such taxes,
        assessments, or charges are being contested in good faith and appropriate
        reserves shall be made with funds set aside in a separate trust
        fund.

      g)        
        Provide the Bank with information and financial data as it may request from
        time
        to time.

      h)        
        Maintain property, plant and equipment in good repair and working
        condition.

      i)         
        Inform the Bank of any actual or probable litigation and furnish the Bank
        with
        copies of details of any litigation or other proceedings, which might affect
        the
        financial condition, business, operations, or prospects of the
        Borrower.

      j)         
        Provide such additional security and documentation as may be required from
        time
        to time by the Bank or its solicitors.

      k)         
        Continue to carry on the business currently being carried on by the Borrower
        its
        subsidiaries and each of the Guarantors at the date hereof.

      l)         
        Maintain adequate insurance on all of its assets, undertakings, and business
        risks.

      m)       
        Permit the Bank or its authorized representatives full and reasonable access
        to
        its premises, business, financial and computer records and allow the duplication
        or extraction of pertinent information therefrom and

      n)        
        Comply with all applicable laws.

       

      8.
        STANDARD NEGATIVE COVENANTS

       

      So
        long
        as any amounts remain outstanding and unpaid under this Agreement or so long
        as
        any commitment under this Agreement remains in effect, the Borrower will
        not and
        will ensure that its subsidiaries and each of the Guarantors will
        not:

       

      a)
                Create, incur, assume, or suffer to
        exist, any mortgage, deed of trust, pledge, lien, security interest, assignment,
        charge, or encumbrance (including without limitation, any conditional sale,
        or
        other title retention agreement, or finance lease) of any nature, upon or
        with
        respect to any of its assets or undertakings, now owned or hereafter acquired,
        except for those Permitted Liens, if any, set out in the Letter. 

      b)        
        Create, incur, assume or suffer to exist any other indebtedness for borrowed
        money (except for indebtedness resulting from Permitted Liens, if any) or
        guarantee or act as surety or agree to indemnify the debts of any other
        Person.

      c)        
        Merge or consolidate with any other Person, or acquire all or substantially
        all
        of the shares, assets or business of any other Person.

      d)        
        Sell, lease, assign, transfer, convey or otherwise dispose of any of its
        now
        owned or hereafter acquired assets (including, without limitation, shares
        of
        stock and indebtedness of subsidiaries, receivables and leasehold interests),
        except for inventory disposed of in the ordinary course of
        business.

      e)
                Terminate or enter into a surrender
        of any lease of any property mortgaged under the Bank Security.

      f)         
        Cease to carry on the business currently being carried on by each of the
        Borrower, its subsidiaries, and the Guarantors at the date hereof.

      g)        
        Permit any change of ownership or change in the capital structure of the
        Borrower.

       

      9.
        ENVIRONMENTAL

       

      The
        Borrower represents and warrants (which representation and warranty shall
        continue throughout the term of this Agreement) that the business of the
        Borrower, its subsidiaries and each of the Guarantors is being operated in
        compliance with applicable laws and regulations respecting the discharge,
        omission, spill or disposal of any hazardous materials and that any and all
        enforcement actions in respect thereto have been clearly conveyed to the
        Bank.

       

      The
        Borrower shall, at the request of the Bank from time to time, and at the
        Borrower's expense, obtain and provide to the Bank an environmental audit
        or
        inspection report of the property from auditors or inspectors acceptable
        to the
        Bank.

       

      The
        Borrower hereby indemnifies the Bank, its officers, directors, employees,
        agents
        and shareholders, and agrees to hold each of them harmless from all loss,
        claims, damages and expenses (including legal and audit expenses) which may
        be
        suffered or incurred in connection with the indebtedness under this Agreement
        or
        in connection with the Bank Security. 

       

      10.
        STANDARD EVENTS OF DEFAULT

       

      The
        Bank
        may accelerate the payment of principal and interest under any committed
        credit
        facility hereunder and cancel any undrawn portion of any committed credit
        facility hereunder, at any time after the occurrence of any one of the following
        Events of Default:

      a)        
        Non-payment of principal outstanding under this Agreement when due or
        non-payment of interest or fees outstanding under this Agreement within 3
        Business Days of when due.

      b)        
        If any representation, warranty or statement made hereunder or made in
        connection with the execution and delivery of this Agreement or the Bank
        Security is false or misleading at any time.

      c)        
        If there is a breach or non-performance or non-observance of any term or
        condition of this Agreement or the Bank Security and, if such default is
        capable
        to being remedied, the default continues unremedied for 5 Business Days after
        the occurrence. 

      d)        
        If the Borrower, any one of its subsidiaries, or, if any of the Guarantors
        makes
        a general assignment for the benefit of creditors, files or presents a petition,
        makes a proposal or commits any act of bankruptcy, or if any action is taken
        for
        the winding up, liquidation or the appointment of a liquidator, trustee in
        bankruptcy, custodian, curator, sequestrator, receiver or any other officer
        with
        similar powers or if a judgment or order shall be entered by any court approving
        a petition for reorganization, arrangement or composition of or in respect
        of
        the Borrower, any of its subsidiaries, or any of the Guarantors or if the
        Borrower, any of its subsidiaries, or any of the Guarantors is insolvent
        or
        declared bankrupt.

      e)
                If there exists a voluntary or
        involuntary suspension of business of the Borrower, any of its subsidiaries,
        or
        any of the Guarantors.

      f)         
        If action is taken by an encumbrancer against the Borrower,  any of its
        subsidiaries, or any of the Guarantors to take possession of property or
        enforce
        proceedings against any assets.

      g)        
        If any final judgment for the payment of monies is made against the Borrower,
        any of its subsidiaries, or any of the Guarantors and it is not discharged
        within 30 days from the imposition of such judgment.

      h)        
        If there exists an event, the effect of which with lapse of time or the giving
        of notice, will constitute an event of default or a default under any other
        agreement for borrowed money in excess the Cross Default Threshold entered
        into
        by the Borrower, any of its subsidiaries, or any of the Guarantors.

      i)         
        If the Bank Security is not enforceable or if any party to the Bank Security
        shall dispute or deny any liability or any of its obligations under the Bank
        Security.

      j)
                 If, in the Bank's
        determination, a material adverse change occurs in the financial condition,
        business operations or prospects of the Borrower, any of the Borrower's
        subsidiaries, or any of the Guarantors.

       

      11.
        ACCELERATION

       

      If
        the
        Bank accelerates the payment of principal and interest hereunder, the Borrower
        shall immediately pay to the Bank all amounts outstanding hereunder, including
        without limitation, the amount of unmatured B/As and LIBOR Loans and the
        amount
        of all drawn and undrawn  L/Gs and  L/Cs.  All cost to the Bank
        of unwinding LIBOR Loans and all loss suffered by the Bank in re-employing
        amounts repaid will be paid by the Borrower.

       

      The
        Bank
        may demand the payment of principal and interest under the Operating Loan
        (and
        any other uncommitted facility) hereunder and cancel any undrawn portion
        of the
        Operating Loan (and any other uncommitted facility) hereunder, at any time
        whether or not an Event of Default has occurred.

       

      12.
        CURRENCY INDEMNITY

       

      US$
        loans
        must be repaid with US$ and CDN$ loans must be repaid with CDN$ and the Borrower
        shall indemnify the Bank for any loss suffered by the Bank if US$ loans are
        repaid with CDN$ or vice versa, whether such payment is made pursuant to
        an
        order of a court or otherwise.

       

      13.
        TAXATION ON PAYMENTS

       

      All
        payments made by the Borrower to the Bank will be made free and clear of
        all
        present and future taxes (excluding the Bank's income taxes), withholdings
        or
        deductions of whatever nature.  If these taxes, withholdings or deductions
        are required by applicable law and are made, the Borrower, shall, as a separate
        and independent obligation, pay to the Bank all additional amounts as shall
        fully indemnify the Bank from any such taxes, withholdings or
        deductions.

       

      14.
        REPRESENTATION

       

      No
        representation or warranty or other statement made by the Bank concerning
        any of
        the credit facilities shall be binding on the Bank unless made by it in writing
        as a specific amendment to this Agreement.

       

      15.
        ADDED COST

       

      If
        the
        introduction of or any change in any present or future law, regulation, treaty,
        official or unofficial directive, or regulatory requirement, (whether or
        not
        having the force of law) or in the interpretation or application thereof,
        relates to:

      i)         
        the imposition or exemption of taxation of payments due to the Bank or on
        reserves or deemed reserves in respect of the undrawn portion of any Facility
        or
        loan made available hereunder; or,

      ii)         
        any reserve, special deposit, regulatory or similar requirement against assets,
        deposits, or loans or other acquisition of funds for loans by the Bank;
        or,

      iii)        
        the amount of capital required or expected to be maintained by the Bank as
        a
        result of the existence of the advances or the commitment made
        hereunder;

       

      and
        the
        result of such occurrence is, in the sole determination of the Bank, to increase
        the cost of the Bank or to reduce the income received or receivable by the
        Bank
        hereunder, the Borrower shall, on demand by the Bank, pay to the Bank that
        amount which the Bank estimates will compensate it for such additional cost
        or
        reduction in income and the Bank's estimate shall be conclusive, absent manifest
        error.

       

      16.
        EXPENSES

       

      The
        Borrower shall pay, within 5 Business Days following notification, all fees
        and
        expenses (including but not limited to all legal fees) incurred by the Bank
        in
        connection with the preparation, registration and ongoing administration
        of this
        Agreement and the Bank Security and with the enforcement of the Bank's rights
        and remedies under this Agreement and the Bank Security whether or not any
        amounts are advanced under the Agreement. These  fees and expenses shall
        include, but not be limited, to all outside counsel fees and expenses and
        all
        in-house legal fees and expenses, if in-house counsel are used, and all outside
        professional advisory fees and expenses. The Borrower shall pay interest
        on
        unpaid amounts due pursuant to this paragraph at the All-In Rate plus 2%
        per
        annum.

       

      17.
        NON WAIVER

       

      Any
        failure by the Bank to object to or take action with respect to a breach
        of this
        Agreement or any Bank Security or upon the occurrence of an Event of Default
        shall not constitute a waiver of the Bank's right to take action at a later
        date
        on that breach. No course of conduct by the Bank will give rise to any
        reasonable expectation which is in any way inconsistent with the terms and
        conditions of this Agreement and the Bank Security or the Bank's rights
        thereunder.

       

      18.
        EVIDENCE OF INDEBTEDNESS

       

      The
        Bank
        shall record on its records the amount of all loans made hereunder, payments
        made in respect thereto, and all other amounts becoming due to the Bank under
        this Agreement.  The Bank's records constitute, in the absence of manifest
        error, conclusive evidence of the indebtedness of the Borrower to the Bank
        pursuant to this Agreement.

       

      The
        Borrower will sign the Bank’s standard form Letter of Credit Indemnity Agreement
        for all L/Cs and  L/Gs issued by the Bank.

       

      With
        respect to chattel mortgages taken as Bank Security, this Agreement is the
        Promissory Note referred to in same chattel mortgage, and the indebtedness
        incurred hereunder is the true indebtedness secured by the chattel
        mortgage.

       

      19.
        ENTIRE AGREEMENTS

       

      This
        Agreement replaces any previous letter agreements dealing specifically with
        terms and conditions of the credit facilities described in the Letter.
        Agreements relating to other credit facilities made available by the Bank
        continue to apply for those other credit facilities.  This Agreement, and
        if applicable, the Letter of Credit Indemnity Agreement, are the entire
        agreements relating to the Facilities described in this Agreement.

       

      20.
        ASSIGNMENT

       

      The
        Bank
        may assign or grant participation in all or part of this Agreement or in
        any
        loan made hereunder without notice to and without the Borrower's consent.
        

       

      The
        Borrower may not assign or transfer all or any part of its rights or obligations
        under this Agreement.  

       

      21.
        RELEASE OF
        INFORMATION        

       
        

      The
        Borrower hereby irrevocably authorizes and directs the Borrower's accountant,
        (the "Accountant") to deliver all financial statements and other financial
        information concerning the Borrower to the Bank and agrees that the Bank
        and the
        Accountant may communicate directly with each other. 

       

      22. 
        FX CLOSE OUT

       

      The
        Borrower hereby acknowledges and agrees that in the event any of the following
        occur: (i) Default by the Borrower under any forward foreign exchange contract
        ("FX Contract"); (ii) Default by the Borrower in payment of monies owing
        by it
        to anyone, including the Bank; (iii) Default in the performance of any other
        obligation of the Borrower under any agreement to which it is subject; or
        (iv)
        the Borrower is adjudged to be or voluntarily becomes bankrupt or insolvent
        or
        admits in writing to its inability to pay its debts as they come due or has
        a
        receiver appointed over its assets, the Bank shall be entitled without advance
        notice to the Borrower to close out and terminate all of the outstanding
        FX
        Contracts entered into hereunder, using normal commercial practices employed
        by
        the Bank, to determine the gain or loss for each terminated FX contract. 
The Bank shall then be entitled to calculate a net termination value for
        all of
        the terminated FX Contracts which shall be the net sum of all the losses
        and
        gains arising from the termination of the FX Contracts which net sum shall
        be
        the "Close Out Value" of the terminated FX Contracts.  The Borrower
        acknowledges that it shall be required to forthwith pay any positive Close
        Out
        Value owing to the Bank and the Bank shall be required to pay ant negative
        Close
        Out Value owing to the Borrower, subject to any rights of set-off to which
        the
        Bank is entitled or subject. 

       

      23.
        SET-OFF

       

      In
        addition to and not in limitation of any rights now or hereafter granted
        under
        applicable law, the Bank may at any time and from time to time without notice
        to
        the Borrower or any other Person, any notice being expressly waived by the
        Borrower, set-off and compensate and apply any and all deposits, general
        or
        special, time or demand, provisional or final, matured or unmatured, in any
        currency, and any other indebtedness or amount payable by the Bank (irrespective
        of the place of payment or booking office of the obligation), to or for the
        credit of or for the Borrower's account, including without limitation, any
        amount owed by the Bank to the Borrower under any FX Contract or other treasury
        or derivative product, against and on account of the indebtedness and liability
        under this Agreement notwithstanding that any of them are contingent or
        unmatured or in a different currency than the indebtedness and liability
        under
        this Agreement. 

       

      When
        applying a deposit or other obligation in a different currency than the
        indebtedness and liability under this Agreement to the indebtedness and
        liability under this Agreement, the Bank will convert the deposit or other
        obligation to the currency of the indebtedness and liability under this
        Agreement using the Bank's noon spot rate of exchange for the conversion
        of such
        currency.

       

      24. 
        USE OF INFORMATION

       

      The
        word
        "Information" means the Borrower's business and credit information and the
        Guarantor's personal, business and credit information.  It includes
        information provided to the Bank by the Borrower and Guarantors, including
        through the products and services the Borrower and Guarantor(s) uses, and
        information obtained from others.

       

      The
        Borrower and the Guarantor agree to the use of its Information as
        follows:

      Use
        of
        Information - The Bank may use Information to establish and serve the Borrower
        as its customer, determine whether any products or services of the TD Bank
        Financial Group are suitable for the Borrower and offer them to the Borrower,
        or
        when required or permitted by law. The Bank may share Information within
        the TD
        Bank Financial Group where permitted by law;  

      Collection
        and Use of Credit Information - THE BANK MAY OBTAIN INFORMATION FROM PARTIES
        OUTSIDE THE TD BANK FINANCIAL GROUP, INCLUDING THROUGH A CREDIT CHECK, AND
        VERIFY INFORMATION WITH THEM.  THE BORROWER AND THE GUARANTOR AUTHORIZE
        THOSE PARTIES TO GIVE THE BANK INFORMATION.  The Bank may disclose
        Information to other lenders and credit bureaus. 

       

      The
        Borrower and the Guarantor may obtain the Bank’s Privacy Code - "Protecting Your
        Privacy" or review its options for refusing or withdrawing this consent,
        including its option not to be contacted about offers of products or services,
        by contacting the Branch or calling the Bank at 1-800-9TD BANK.

       

      25.
        MISCELLANEOUS

       

      i)         
        The Borrower has received a signed copy of this Agreement;

      ii)         
        If more than one Person, firm or corporation signs this Agreement as the
        Borrower, each party is jointly and severally liable hereunder, and the Bank
        may
        require payment of all amounts payable under this Agreement from any one
        of
        them, or a portion from each, but the Bank is released from any of its
        obligations by performing that obligation to any one of them;

      iii)        
        Accounting terms will (to the extent not defined in this Agreement) be
        interpreted in accordance with accounting principles established from time
        to
        time by the Canadian Institute of Chartered Accountants (or any successor)
        consistently applied, and all financial statements and information provided
        to
        the Bank will be prepared in accordance with those principles;

      iv)        
        This Agreement is governed by the law of the Province or Territory where
        the
        Branch/Centre is located.

      v)        
        Unless stated otherwise, all amounts referred to herein are in Canadian
        dollars

       

      26.
        DEFINITIONS

       

      Capitalized
        Terms used in this Agreement shall have the following meanings:

      "All-In
        Rate" means the greater of the Interest Rate that the Borrower pays for
        Prime Based Loans (which for greater certainty includes the percent per annum
        added to the Prime Rate) or the highest fixed rate paid for Fixed Rate Term
        Loans. 

      "Agreement"
        means the agreement between the Bank and the Borrower set out in the Letter
        and
        this Schedule "A" - Standard Terms and Conditions.

      "Business
        Day" means any day (other than a Saturday or Sunday) that the Branch/Centre
        is open for business.

      "Branch/Centre"
        means The Toronto-Dominion Bank branch or banking centre noted on the first
        page
        of the Letter, or such other branch or centre as may from time to time be
        designated by the Bank.

      "Contractual
        Term Maturity Date" means the date set out in the Letter under the heading
        "Contractual Term".

      "Face
        Amount" means, in respect of:

      (i)        
        a B/A, the amount payable to the holder thereof on its maturity;

      (ii)        
        A L/C or L/G, the maximum amount payable to the beneficiary specified therein
        or
        any other Person to whom payments may be required to be made pursuant to
        such
        L/C or L/G.

      "Fixed
        Rate Term Loan" means any drawdown in Canadian dollars under a Credit
        Facility at an interest rate which is fixed for a Rate Term at such rate
        as is
        determined by the Bank as its sole discretion.  

      "Inventory
        Value" means, at any time of determination, the total value (based on the
        lower of cost or market) of the Borrower's inventories that are subject to
        the
        Bank Security (other than (i) those inventories supplied by trade creditors
        who
        at that time have not been fully paid therefore and would have a right to
        repossess all or part of such inventories if the Borrower were then either
        bankrupt or in receivership, (ii) those inventories comprising work in process
        and (iii) those inventories that the Bank may from time to time designate
        in its
        sole discretion) minus the total amount of any claims, liens or encumbrances
        on
        those inventories having or purporting to have priority over the
        Bank.

      "Letter"
        means the letter from the Bank to the Borrower to which this Schedule "A"
        -  Standard Terms and Conditions is attached.

      "Letter
        of Credit" or "L/C" means a documentary letter of credit or similar
        instrument in form and substance satisfactory to the Bank.

      "Letter
        of Guarantee" or "L/G" means a stand-by letter of guarantee or
        similar instrument in form and substance satisfactory to the Bank.

      "Person"
        includes any individual, sole proprietorship, corporation, partnership, joint
        venture, trust, unincorporated association, association, institution, entity,
        party, or government (whether national, federal, provincial, state, municipal,
        city, county, or otherwise and including any instrumentality, division, agency,
        body, or department thereof).

      "Purchase
        Money Security Interest" means a security interest on equipment which is
        granted to a lender or to the seller of such equipment in order to secure
        the
        purchase price of such equipment or a loan to acquire such equipment, provided
        that the amount secured by the security interest does not exceed the cost
        of the
        equipment, the Borrower provides written notice to the Bank prior to the
        creation of the security interest, and the creditor under the security interest
        has, if requested by the Bank, entered into an inter-creditor agreement with
        the
        Bank, in a format acceptable to the Bank.  

       

      "Rate
        Term" means that period of time as selected by the Borrower from the options
        offered to it by the Bank, during which a Fixed Rate Term Loan will bear
        a
        particular interest rate.  If no Rate Term is selected, the Borrower will
        be deemed to have selected a Rate Term of 1 year.

      "Rate
        Term Maturity" means the last day of a Rate Term which day may never exceed
        the Contractual Term Maturity Date.

      "Rate
        and Payment Terms Notice" means the notice sent by the Bank setting out the
        interest rate and payment terms for a particular drawdown.

      "Receivable
        Value" means, at any time of determination, the total value of those of the
        Borrower's trade accounts receivable that are subject to the Bank Security
        other
        than (i) those accounts then outstanding for 90 days, (ii) those accounts
        owing
        by Persons, firms or corporations affiliated with the Borrower, (iii) those
        accounts that the Bank may from time to time designate in its sole discretion,
        (iv) those accounts subject to any claim, liens, or encumbrance having or
        purporting to have priority over the Bank, (v) those accounts which are subject
        to a claim of set-off by the obligor under such account, MINUS the total
        amount
        of all claims, liens, or encumbrances on those receivables having or purporting
        to have priority over the Bank. 

      "Receivables/Inventory
        Summary" means a summary of the Customer's trade account receivables and
        inventories, in form as the Bank may require and certified by a senior
        officer/representative of the Borrower.

      "US$
        Equivalent" means, on any date, the equivalent amount in United States
        Dollars after giving effect to a conversion of a specified amount of 
Canadian Dollars to United States Dollars at the Bank's noon spot rate of
        exchange for Canadian Dollars to United States Dollars established by the
        Bank
        for the day in question.