CANADIAN REVOLVING CREDIT AGREEMENT

Revolving Credit Agreement

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EMS TECHNOLOGIES INC | EMS TECHNOLOGIES CANADA, LTD | BANK OF AMERICA, NATIONAL ASSOCIATION

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Title: CANADIAN REVOLVING CREDIT AGREEMENT
Date: 3/31/2005
Industry: Communications Equipment Law Firm: Bank of America Sector: Technology

CANADIAN REVOLVING CREDIT AGREEMENT, Parties: ems technologies inc , ems technologies canada ltd , bank of america national association

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EXHIBIT 4.8

CANADIAN REVOLVING CREDIT AGREEMENT

DATED AS OF DECEMBER 10, 2004

AMONG

EMS TECHNOLOGIES CANADA, LTD.,

EMS TECHNOLOGIES, INC.,

THE LENDERS FROM TIME TO TIME PARTY HERETO

AND

BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH)

AS CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT

====================================================================

SUNTRUST ROBINSON HUMPHREY

(A DIVISION OF SUNTRUST CAPITAL MARKETS, INC.)

AS LEAD ARRANGER

BANK OF AMERICA, NATIONAL ASSOCIATION

(CANADA BRANCH)

AS SYNDICATION AGENT

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS; CONSTRUCTION....................................................................... 1

Section 1.1 Definitions............................................................................ 1

Section 1.2 Classifications of Loans and Borrowings................................................ 22

Section 1.3 Accounting Terms and Determination..................................................... 22

Section 1.4 Terms Generally; Rules of Interpretation............................................... 23

ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS............................................................ 23

Section 2.1 General Description of Facilities...................................................... 23

Section 2.2 Revolving Loans........................................................................ 24

Section 2.3 Procedure for Revolving Borrowings..................................................... 24

Section 2.4 Swingline Commitment................................................................... 24

Section 2.5 Procedure for Swingline Borrowing; Etc. ............................................... 25

Section 2.6 Funding of Borrowings.................................................................. 26

Section 2.7 Interest Elections; Conversions; Continuations......................................... 27

Section 2.8 Termination of Commitments............................................................. 28

Section 2.9 Repayment of Loans..................................................................... 28

Section 2.10 Evidence of Indebtedness........................................................... 29

Section 2.11 Optional and Mandatory Prepayments................................................. 29

Section 2.12 Interest on Loans.................................................................. 32

Section 2.13 Fees............................................................................... 33

Section 2.14 Effective Date for Adjustment to Applicable Percentage and Applicable Margin....... 34

Section 2.15 Inability to Determine Interest Rates.............................................. 34

Section 2.16 Illegality......................................................................... 35

Section 2.17 Increased Costs.................................................................... 35

Section 2.18 Funding Indemnity.................................................................. 37

Section 2.19 Taxes.............................................................................. 37

Section 2.20 Payments Generally; Pro Rata Treatment; Sharing of Set-offs........................ 39

Section 2.21 Mitigation of Obligations; Replacement of Lenders.................................. 41

Section 2.22 Letters of Credit.................................................................. 41

ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT........................................... 46

Section 3.1 Conditions To Effectiveness............................................................ 46

Section 3.2 Each Credit Event...................................................................... 51

Section 3.3 Delivery of Documents.................................................................. 52

ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................. 52

Section 4.1 Existence; Power....................................................................... 52

Section 4.2 Organizational Power; Authorization.................................................... 53

Section 4.3 Governmental and Third Party Approvals; No Conflicts................................... 53

Section 4.4 Financial Statements................................................................... 53

Section 4.5 Litigation and Environmental Matters................................................... 54

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Section 4.6 Compliance with Laws and Agreements.................................................... 54

Section 4.7 Taxes.................................................................................. 54

Section 4.8 Canadian Welfare and Pension Plans..................................................... 55

Section 4.9 Ownership of Property.................................................................. 55

Section 4.10 Disclosure......................................................................... 56

Section 4.11 Labour Relations................................................................... 56

Section 4.12 Subsidiaries....................................................................... 56

Section 4.13 Solvency........................................................................... 56

Section 4.14 Indebtedness at Closing Date....................................................... 57

Section 4.15 OFAC............................................................................... 57

Section 4.16 Patriot Act........................................................................ 57

Section 4.17 Dormant Companies.................................................................. 57

ARTICLE V AFFIRMATIVE COVENANTS........................................................................... 57

Section 5.1 Financial Statements and Other Information............................................. 57

Section 5.2 Notices of Material Events............................................................. 59

Section 5.3 Existence.............................................................................. 60

Section 5.4 Compliance with Laws, Etc. ............................................................ 60

Section 5.5 Payment of Obligations................................................................. 60

Section 5.6 Books and Records...................................................................... 60

Section 5.7 Visitation, Inspection, Etc. .......................................................... 61

Section 5.8 Maintenance of Properties; Insurance................................................... 61

Section 5.9 Use of Proceeds and Letters of Credit.................................................. 61

Section 5.10 Additional Security................................................................ 61

Section 5.11 Amendment to U.S. Loan Documents................................................... 62

Section 5.12 Additional Real Property; Leased Locations......................................... 62

Section 5.13 Dispute Reserve.................................................................... 63

Section 5.14 Notices in Connection with MacDonald Dettwiler Contract............................ 64

Section 5.15 Further Assurances................................................................. 64

ARTICLE VI FINANCIAL COVENANTS............................................................................ 65

Section 6.1 Leverage Ratio......................................................................... 65

Section 6.2 Fixed Charge Coverage Ratio............................................................ 65

Section 6.3 Minimum Net Worth...................................................................... 65

Section 6.4 Minimum EBITDA......................................................................... 66

ARTICLE VII NEGATIVE COVENANTS............................................................................ 66

Section 7.1 Indebtedness........................................................................... 66

Section 7.2 Negative Pledge........................................................................ 67

Section 7.3 Fundamental Changes.................................................................... 67

Section 7.4 Investments, Loans, Acquisitions, Etc. ................................................ 68

Section 7.5 Restricted Payments.................................................................... 69

Section 7.6 Sale of Assets......................................................................... 69

Section 7.7 Transactions with Affiliates........................................................... 70

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Section 7.8 Restrictive Agreements....................................................................... 70

Section 7.9 Sale and Leaseback Transactions.............................................................. 70

Section 7.10 Hedging Transactions..................................................................... 71

Section 7.11 Amendment to Organizational Documents.................................................... 71

Section 7.12 Accounting Changes; Change of Fiscal Year................................................ 71

Section 7.13 Location of Assets in Other Jurisdictions................................................ 71

ARTICLE VIII EVENTS OF DEFAULT.................................................................................. 72

Section 8.1 Events of Default............................................................................ 72

ARTICLE IX THE CANADIAN ADMINISTRATIVE AGENT AND FUNDING AGENT.................................................. 75

Section 9.1 Appointment of Canadian Administrative Agent................................................. 75

Section 9.2 Nature of Duties of Canadian Administrative Agent and Funding Agent.......................... 76

Section 9.3 Lack of Reliance on the Canadian Administrative Agent or the Funding Agent................... 76

Section 9.4 Certain Rights of the Canadian Administrative Agent and the Funding Agent.................... 77

Section 9.5 Reliance by Canadian Administrative Agent and the Funding Agent.............................. 77

Section 9.6 The Canadian Administrative Agent and the Funding Agent in their Individual Capacities....... 77

Section 9.7 Successor Canadian Administrative Agent and Successor Funding Agent.......................... 78

Section 9.8 Authorization to Execute other Loan Documents................................................ 78

Section 9.9 Acknowledgements Regarding Collateral Documents.............................................. 79

Section 9.10 Deliveries Under U.S. Revolving Credit Agreement......................................... 79

ARTICLE X NOTICES............................................................................................... 79

Section 10.1 Notices.................................................................................. 79

Section 10.2 Waiver; Amendments....................................................................... 82

Section 10.3 Expenses; Indemnification................................................................ 83

Section 10.4 Successors and Assigns................................................................... 85

Section 10.5 Governing Law; Jurisdiction; Consent to Service of Process............................... 88

Section 10.6 Right of Setoff.......................................................................... 88

Section 10.7 Counterparts; Integration................................................................ 89

Section 10.8 Survival................................................................................. 89

Section 10.9 Severability............................................................................. 89

Section 10.10 Interest Rate Limitation................................................................. 90

Section 10.11 Confidentiality.......................................................................... 90

Section 10.12 Waiver of Effect of Corporate Seal....................................................... 91

Section 10.13 Lenders' U.S. Revolving Credit Agreement Obligations..................................... 91

Section 10.14 Judgment Currency........................................................................ 91

Section 10.15 This Agreement to Govern................................................................. 92

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Schedules

Schedule I - Applicable Margin and Applicable Percentage

Schedule II - Real Property

Schedule 4.3 - Excluded Contractual Obligations

Schedule 4.5(a) - Litigation

Schedule 4.5(b) - Environmental Matters

Schedule 4.12 - Subsidiaries and Affiliates

Schedule 4.14 - Indebtedness

Schedule 4.17 - Assets and Liabilities of Dormant Companies

Schedule 7.2 - Existing Liens

Schedule 7.4 - Existing Investments

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Exhibits

Exhibit A - Form of Assignment and Acceptance

Exhibit B-2 - Form of U.S. Pledge Agreement

Exhibit C - Form of Revolving Credit Note

Exhibit D-1A - Form of Canadian Security Agreement

Exhibit D-1B - Form of Deed of Movable Hypothec

Exhibit D-2 - Form of U.S. Security Agreement

Exhibit F - Form of Swingline Note

Exhibit G - Form of U.S. Trademark Security Agreement

Exhibit H - Form of U.S. Patent Security Agreement

Exhibit I - Form of Opinion of Counsel to Loan Parties

Exhibit 2.3 - Form of Notice of Revolving Borrowing

Exhibit 2.5 - Form of Notice of Swingline Borrowing

Exhibit 2.7 Form of Notice of Continuation/Conversion

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CANADIAN REVOLVING CREDIT AGREEMENT

THIS CANADIAN REVOLVING CREDIT AGREEMENT (this "AGREEMENT") is made

and entered into as of December 10, 2004 by and among EMS TECHNOLOGIES CANADA,

LTD., a corporation incorporated under the laws of Canada (the "BORROWER"), EMS

TECHNOLOGIES, INC., a Georgia corporation (the "PARENT"), the several banks and

other financial institutions from time to time party hereto (the "LENDERS") and

BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH) in its capacity as Funding

Agent for the Lenders (the "FUNDING AGENT") and BANK OF AMERICA, NATIONAL

ASSOCIATION (CANADA BRANCH) in its capacity as Canadian Administrative Agent for

the Lenders (the "CANADIAN ADMINISTRATIVE AGENT").

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders establish a

U.S.$30,000,000 revolving credit facility in favour of the Borrower; and

WHEREAS, subject to the terms and conditions of this Agreement, the

Lenders severally, to the extent of their respective Commitments are willing to

establish the requested revolving credit facility for the Borrower;

NOW, THEREFORE, in consideration of the premises and the mutual

covenants herein contained, the Borrower, the Parent, the Lenders, the Funding

Agent and the Canadian Administrative Agent agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

SECTION 1.1 DEFINITIONS

In addition to the other terms defined herein, the following terms used

herein shall have the meanings herein specified (to be equally applicable to

both the singular and plural forms of the terms defined):

"ACQUISITION" shall mean any acquisition, whether by stock or other equity

purchase, asset purchase, merger, amalgamation, consolidation or otherwise of a

Person, of all or substantially all of the assets of a Person or a business line

or division of a Person.

"ADJUSTED LIBOR" shall mean, with respect to each Interest Period for a

Eurodollar Borrowing, the rate per annum obtained by multiplying (a) LIBOR for

such Interest Period by (b) the Statutory Reserve Rate.

"ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each Lender, an

administrative questionnaire in the form provided by the Canadian Administrative

Agent and submitted to the Canadian Administrative Agent duly completed by such

Lender.

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"AFFILIATE" shall mean, as to any Person, any other Person that directly, or

indirectly through one or more intermediaries, Controls, is Controlled by, or is

under common Control with, such Person.

"AGGREGATE REVOLVING COMMITMENTS" shall mean the sum of the Revolving

Commitments of all Lenders at any time outstanding. On the Closing Date, the

Aggregate Revolving Commitments shall equal U.S.$30,000,000.

"APPLICABLE LAW" shall mean, in respect of any Person, property, transaction,

event or other matter, as applicable, all laws, rules, statutes, regulations,

treaties, orders, judgments and decrees and all official directives, rules,

guidelines, orders, policies and other requirements of any Governmental

Authority and shall also include any interpretation of the Law or any part of

the Law by any Person having jurisdiction over it or charged with its

administration or interpretation in each case having the force of law

(collectively the "Law") relating or applicable to such Person, property,

transaction, event or other matter.

"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each Type of

Loan, the "Lending Office" of such Lender (or an Affiliate of such Lender)

designated for such Type of Loan in the Administrative Questionnaire submitted

by such Lender or such other office of such Lender (or an Affiliate of such

Lender) as such Lender may from time to time specify to the Funding Agent and

the Borrower as the office by which its Loans of such Type are to be made and

maintained.

"APPLICABLE MARGIN" shall mean, as of any date, with respect to all Eurodollar

Loans and all Base Rate Loans outstanding on any date, the percentage per annum

determined by reference to the applicable Leverage Ratio in effect on such date

as set forth on Schedule I attached hereto, as adjusted and otherwise determined

from time to time in accordance with Section 2.14.

"APPLICABLE PERCENTAGE" shall mean, at any date, with respect to the commitment

fee or the letter of credit fee, as the case may be, the percentage per annum

determined by reference to the applicable Leverage Ratio in effect on such date

as set forth on Schedule I attached hereto, as adjusted and otherwise determined

from time to time in accordance with Section 2.14.

"APPLICABLE PLEDGE AMOUNT" shall mean, in respect of the amount of capital stock

or other equity interest of any Non-U.S. Subsidiary to be pledged to the U.S.

Collateral Agent, pursuant to the U.S. Pledge Agreement, the lesser of (a) 65%

of all outstanding capital stock or other equity interest of such Non-U.S.

Subsidiary and (b) the total amount of all outstanding capital stock or other

equity interest of such Non-U.S. Subsidiary owned by the Parent and its U.S.

Subsidiaries.

"APPROVED FUND" shall mean any Person (other than a natural Person) that is (or

will be) engaged in making, purchasing, holding or otherwise investing in

commercial loans and similar extensions of credit in the ordinary course of its

business and that is administered or managed by (a) a Lender, (b) an Affiliate

of a Lender or (c) an entity or an Affiliate of an entity that administers or

manages a Lender.

"ASSET DISPOSITION" shall have the meaning assigned to that term in Section 7.6.

"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance entered into

by a Lender and an assignee (with the consent of any party whose consent is

required by Section 10.4(b)) and

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accepted by the Funding Agent, in the form of Exhibit A attached hereto or any

other form approved by the Funding Agent.

"AVAILABILITY PERIOD" shall mean the period from the Closing Date to the

Commitment Termination Date.

"BASE RATE" shall mean the higher of (a) the floating annual rate of interest

established by the Funding Agent from time to time as the reference rate it will

use to determine rates of interest on Canadian Dollar loans to customers in

Canada and designated as its prime rate, as in effect on such day (it being

acknowledged and agreed that such rate may not be the Funding Agent's best or

lowest rate); and (b) the CDOR Rate applicable on such day plus 1%.

"BORROWER" shall have the meaning given such term in the introductory paragraph

hereof.

"BORROWING" shall mean a borrowing consisting of (a) Loans of the same Class and

Type, made, converted or continued on the same date and in the case of

Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a

Swingline Loan.

"BUSINESS DAY" shall mean (a) any day other than a Saturday or Sunday or other

day on which commercial banks in Toronto, Ontario are authorized or required by

law to close and (b) if such day relates to a Borrowing of, a payment or

prepayment of principal or interest on, a conversion of or into, or an Interest

Period for, a Eurodollar Loan or a notice with respect to the foregoing, any day

on which dealings in Canadian Dollars or U.S. Dollars are carried on the London

interbank market.

"CANADIAN ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in

the opening paragraph hereof.

"CANADIAN COLLATERAL" shall mean all property with respect to which any Lien has

been granted (or purported to be granted) by the Borrower pursuant to the

Canadian Security Agreement.

"CANADIAN COLLATERAL AGENT" shall mean Bank of America, National Association

(Canada Branch) in its capacity as "Canadian Collateral Agent" under and as

defined in the Intercreditor Agreement, or any other successor who shall become

Canadian Collateral Agent pursuant to terms of the Intercreditor Agreement.

"CANADIAN DOLLAR(s)" and the sign "CDN. $" shall mean lawful money of Canada.

"CANADIAN DOLLAR EQUIVALENT" of any amount expressed in a currency that is not

Canadian Dollars, means, on any date, the equivalent amount of Canadian Dollars,

after giving effect to a conversion of such amount of such non-Canadian currency

to Canadian Dollars at the buy spot rate quoted for wholesale transactions by

the Funding Agent at approximately 11:00 a.m. on such date of determination in

accordance with its normal practices.

"CANADIAN INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean an intellectual

property security agreement in form and content reasonably satisfactory to the

Canadian Administrative Agent.

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"CANADIAN PENSION PLAN" shall mean any "pension plan" or "plan" that is subject

to the funding requirements of the Pension Benefits Act (Ontario) or applicable

pension benefits legislation in any other Canadian jurisdiction and is

applicable to employees resident in Canada of the Borrower or its Subsidiaries.

"CANADIAN SECURITY AGREEMENTS" shall mean the Canadian Security Agreement in

favour of the Canadian Collateral Agent in substantially the form of Exhibit

D-1A and the Deed of Movable Hypothec (the "Deed of Movable Hypothec") in favour

of the Canadian Collateral Agent in substantially the form of Exhibit D-1B.

"CANADIAN WELFARE PLAN" shall mean any medical, health, hospitalization,

insurance or other employee benefit or welfare plan or arrangement, other than a

Canadian Pension Plan, applicable to employees resident in Canada of the

Borrower or its Subsidiaries, but excludes any statutory plans with which the

Borrower or its Subsidiaries are required to comply, including, without

limitation, the Canada Pension Plan, the Quebec Pension Plan and plans

administered pursuant to applicable provincial health, workers' compensation and

employment insurance legislation.

"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of such

Person to pay rent or other amounts under any lease (or other arrangement

conveying the right to use) real or personal property, or a combination thereof,

which obligations are required to be classified and accounted for as capital

leases on a balance sheet of such Person under GAAP, and the amount of such

obligations shall be the capitalized amount thereof determined in accordance

with GAAP.

"CASUALTY EVENT" shall mean, with respect to any property (including any

interest in property) of the Borrower or any of its Subsidiaries, any loss of,

damage to, or condemnation or other taking of, such property for which the

Borrower or such Subsidiary receives insurance proceeds, proceeds of a

condemnation award or other compensation.

"CDOR RATE" means on any day the annual rate of interest which is the rate

determined as being the arithmetic average of the quotations of all institutions

listed in respect of the "BA 1 Month" Rate for Canadian Dollar denominated

bankers' acceptances displayed and identified as such on the "Reuters Screen

CDOR Page" (as defined in the International Swap Dealer Association, Inc.

definitions, as modified and amended from time to time) as of 10:00 a.m.

Toronto, Ontario local time on such day and, if such day is not a Business Day,

then on the immediately preceding Business Day (as adjusted by the Funding Agent

after 10:00 a.m. Toronto, Ontario local time to reflect any error in a posted

rate of interest or in the posted average annual rate of interest); and if such

rates are not available on the Reuters Screen CDOR Page on any particular day,

then the CDOR Rate on that day shall be calculated as the 30 day rate applicable

to Canadian Dollar denominated bankers' acceptances quoted by the Funding Agent

as of 10:00 a.m. Toronto, Ontario local time on such day; or if such day is not

a Business Day, then as quoted by the Funding Agent on the immediately preceding

Business Day.

"CHANGE IN CONTROL" shall mean the occurrence of one or more of the following

events: (a) any sale, lease, exchange or other transfer (in a single transaction

or a series of related transactions) of all or substantially all of the assets

of the Borrower or the Parent to any Person or "group" (within the meaning of

the Securities Exchange Act of 1934 and the rules of the Securities and Exchange

Commission as in effect on the date hereof) (excluding, for greater certainty,

the sale of Space &

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Technology/Montreal), (b) the acquisition of ownership, directly or indirectly,

beneficially or of record, by any Person or "group" (within the meaning of the

U.S. Securities Exchange Act of 1934 and the rules of the Securities and

Exchange Commission thereunder as in effect on the date hereof) of 30% or more

of the outstanding shares of the voting stock of the Borrower or the Parent; or

of directors of the Borrower or the Parent by Persons who were neither (i)

nominated by the then current board of directors or (ii) appointed by directors

so nominated.

"CHANGE IN LAW" shall mean (a) the adoption of any applicable law, rule or

regulation after the date of this Agreement, (b) any change in any applicable

law, rule or regulation, or any change in the interpretation or application

thereof, by any Governmental Authority after the date of this Agreement, or (c)

compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank

(or for purposes of Section 2.17(b), by such Lender's or the Issuing Bank's

holding company, if applicable) with any request, guideline or directive

(whether or not having the force of law) of any Governmental Authority made or

issued after the date of this Agreement.

"CIBC" shall mean Canadian Imperial Bank of Commerce.

"CLASS", when used in reference to any Loan or Borrowing, refers to whether such

Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline

Loans and when used in reference to any Commitment, refers to whether such

Commitment is a Revolving Commitment or a Swingline Commitment.

"CLOSING DATE" shall mean December 13, 2004.

"CODE" shall mean the Internal Revenue Code of 1986, as amended and in effect

from time to time.

"COLLATERAL" shall mean any property directly or indirectly securing any of the

Obligations or any other obligation of a Person under or in respect of any Loan

Document to which it is a party, and includes without limitation, all

"Collateral" under and as defined in the Security Agreements and all "Pledged

Collateral" and "Collateral" under and as defined under the U.S. Pledge

Agreement and the Canadian Pledge Agreement, respectively.

"COLLATERAL DOCUMENTS" shall mean the Security Agreements, the Pledge

Agreements, each Real Estate Document, the Canadian Intellectual Property

Security Agreement, the U.S. Trademark Security Agreement or the U.S. Patent

Security Agreement, or any or all of the foregoing and any other agreement or

instrument now or hereafter existing pursuant to which Liens are granted to the

U.S. Administrative Agent, the U.S. Collateral Agent, the Funding Agent, the

Canadian Administrative Agent or the Canadian Collateral Agent to secure any of

the Obligations.

"COMMITMENT" shall mean a Revolving Commitment or a Swingline Commitment or any

combination thereof (as the context shall permit or require).

"COMMITMENT TERMINATION DATE" shall mean the earliest of (a) December 9, 2007

and (b) the date on which all amounts outstanding under this Agreement have been

declared or have automatically become due and payable (whether by acceleration

or otherwise).

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"CONSOLIDATED EBITDA" shall mean, for the Consolidated Parties for any period,

an amount equal to the sum of (a) Consolidated Net Income for such period plus

(b) without duplication and only to the extent deducted in determining

Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)

income tax expense, (iii) depreciation and amortization, and (iv) such

"add-backs" or adjustments as are scheduled and approved by the Canadian

Administrative Agent in its sole discretion.

"CONSOLIDATED FIXED CHARGES" shall mean, for the Consolidated Parties for any

Test Period, the sum (without duplication) of: (a) Consolidated Interest Expense

for such Test Period, (b) scheduled principal payments (or the equivalent

thereof) made on or in respect of Consolidated Total Funded Debt during such

Test Period and (c) (i) dividends and other distributions to holders of capital

stock, options, warrants and related instruments of the Borrower and (ii)

payments made with respect to the purchase, redemption, retirement, defeasance

or other acquisition of capital stock, options, warrants and related instruments

of the Parent, made or paid during such Test Period.

"CONSOLIDATED INTEREST EXPENSE" shall mean, for the Consolidated Parties for any

period determined on a consolidated basis in accordance with GAAP, the sum of

(a) total cash interest expense, including without limitation the interest

component of any payments in respect of Capital Lease Obligations capitalized or

expensed during such period (whether or not actually paid during such period)

plus (b) the net amount payable (or minus the net amount receivable) under

Hedging Transactions relating to interest rate hedges during such period

(whether or not actually paid or received during such period).

"CONSOLIDATED NET INCOME" shall mean, for any period, the net income (or loss)

of the Consolidated Parties for such period determined on a consolidated basis

in accordance with GAAP, but excluding therefrom (to the extent otherwise

included therein): (a) any extraordinary gains or losses, (b) any gains

attributable to write-ups of assets, (c) any equity interest of any Consolidated

Party in the unremitted earnings of any Person that is not a Subsidiary, (d) any

income (or loss) of any Person accrued prior to the date such Person becomes a

Subsidiary or is merged into or amalgamated or consolidated with the Parent or

any Subsidiary of the Parent or the date that such Person's assets are acquired

by the Parent or any such Subsidiary and (e) any income of any Subsidiary of the

Parent which is not the Borrower or a Guarantor to the extent the payment of

such income in the form of dividends or other distributions to either the Parent

or any Subsidiary of the Parent is then prohibited, whether on account of

restrictions in such Subsidiary's organizational documents or restrictions in

any agreement, document, contract, deed or other instrument applicable to such

Subsidiary.

"CONSOLIDATED PARTIES" shall mean, at any time, the Parent and each Consolidated

Subsidiary of the Parent.

"CONSOLIDATED SUBSIDIARY" shall mean, at any date, any Person that, in

accordance with GAAP, would or should be consolidated in the Parent's

consolidated financial statements on such date.

"CONSOLIDATED TOTAL FUNDED DEBT" shall mean, at any time, all then outstanding

obligations, liabilities and indebtedness of the Consolidated Parties on a

consolidated basis of the types described in the definition of Indebtedness

(other than clause (j) of the definition thereof), including, without

limitation, all Obligations under the Loan Documents; provided, however, that

Consolidated Total

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Funded Debt shall not included any obligations of the Borrower owing to CIBC

described in clause (n) of the defined term Permitted Encumbrances.

"CONTRACTUAL OBLIGATIONS" shall mean, as to any Person, any provision of any

security issued by such Person or any agreement, instrument or other undertaking

to which such Person is a party or by which such Person or any of its properties

is bound.

"CONTROL" shall mean the power, directly or indirectly, either to (a) vote 5% or

more of securities having ordinary voting power for the election of directors

(or persons performing similar functions) of a Person or (b) direct or cause the

direction of the management and policies of a Person, whether through the

ability to exercise voting power, by contract or otherwise. The terms

"CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have meanings

correlative thereto.

"DEBT ISSUANCE" shall mean the issuance or sale by the Borrower or any of its

Subsidiaries of any debt securities or similar indebtedness, whether in a

private or public offering or otherwise; provided, however, that nothing

contained in this definition shall be deemed or construed to permit any Debt

Issuance that is not otherwise expressly permitted pursuant to the terms hereof.

"DEFAULT" shall mean any condition or event that, with the giving of notice or

the lapse of time or both, would constitute an Event of Default.

"DEFAULT INTEREST" shall have the meaning assigned to that term in Section

2.12(c).

"DEFAULTING LENDER" shall mean any Lender with respect to which a Lender Default

is in effect.

"DORMANT COMPANY" means Netsat 28 Company, LLC, a Delaware limited liability

company.

"ELIGIBLE ASSIGNEE" shall mean (a) a Lender; (b) an Affiliate of a Lender; (c)

an Approved Fund; and (d) any other Person (other than a natural Person)

approved by the Canadian Administrative Agent, and unless an Event of Default

has occurred and is continuing, the Borrower (each such approval not to be

unreasonably withheld or delayed). If the consent of the Borrower to an

assignment or to an Eligible Assignee is required hereunder (including a consent

to an assignment which does not meet the minimum assignment thresholds specified

in Section 10.4(b)), the Borrower shall be deemed to have given its consent five

Business Days after the date notice thereof has actually been delivered by the

assigning Lender (through the Canadian Administrative Agent) to the Borrower,

unless such consent is expressly refused by the Borrower prior to such fifth

Business Day.

"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations, codes, ordinances,

orders, decrees, judgments, injunctions, notices or binding agreements issued,

promulgated or entered into by or with any Governmental Authority, relating in

any way to the environment, preservation or reclamation of natural resources,

the management, Release or threatened Release of any Hazardous Material or to

health and safety matters.

"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent or otherwise

(including any liability for damages, costs of environmental investigation and

remediation, costs of administrative oversight, fines, natural resource damages,

penalties or indemnities), of the Borrower or any Subsidiary directly or

indirectly resulting from or based upon (a) any actual or alleged violation of

any Environmental

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Law, (b) the generation, use, handling, transportation, storage, treatment or

disposal of any Hazardous Materials, (c) any actual or alleged exposure to any

Hazardous Materials, (d) the Release or threatened Release of any Hazardous

Materials or (e) any contract, agreement or other consensual arrangement

pursuant to which liability is assumed or imposed with respect to any of the

foregoing.

"EQUITY OFFERING" means a private or public offering of any capital stock of the

Parent, or any debt security convertible into or exchangeable for capital stock

of the Parent (whether conditionally or unconditionally convertible or

exchangeable or convertible currently or in the future), or any debt security

issued with a warrant or other instrument conferring upon its owner the right to

purchase capital stock of the Parent, in each case pursuant to an effective

registration statement filed with the Securities and Exchange Commission in

accordance with the Securities Act of 1933, as amended. In no event shall an

Equity Offering include any issuances of stock and stock options to employees

and directors of the Parent or its Subsidiaries.

"EURODOLLAR" when used in reference to any Loan or Borrowing, refers to whether

such Loan, or the Loans comprising such Borrowing, bears interest at a rate

determined by reference to the Adjusted LIBOR and the Applicable Margin.

"EVENT OF DEFAULT" shall have the meaning provided in Article VIII.

"EXCHANGE ACT" shall have the meaning provided in the defined term "Change of

Control".

"EXCLUDED TAXES" shall mean with respect to the Canadian Administrative Agent,

the Funding Agent, any Lender, the Issuing Bank or any other recipient of any

payment to be made by or on account of any obligation of the Borrower hereunder,

(a) income or franchise taxes imposed on (or measured by) its net income by the

Government of Canada, or by the jurisdiction under the laws of which such

recipient is organized or in which its principal office is located or, in the

case of any Lender, in which its applicable lending office is located, (b) any

branch profits taxes imposed by the Government of Canada or any similar tax

imposed by any other jurisdiction in which any Lender is located and (c) in the

case of a Foreign Lender, any withholding tax that (i) is imposed on amounts

payable to such Foreign Lender at the time such Foreign Lender becomes a party

to this Agreement or (ii) is imposed on amounts payable to such Foreign Lender

at any time that such Foreign Lender designates a new lending office, other than

taxes that have accrued prior to the designation of such lending office that are

otherwise not Excluded Taxes and (iii) is attributable to such Foreign Lender's

failure to comply with Section 2.19(e). For greater certainty, for purposes of

item (c) above, a withholding tax includes any Tax that a Foreign Lender is

required to pay pursuant to Part XIII of the Income Tax Act (Canada) or any

successor provision thereto.

"EXISTING LENDERS" means each of SunTrust Bank and CIBC.

"FIXED CHARGE COVERAGE RATIO" shall mean, for any Test Period, the ratio of (a)

Consolidated EBITDA for such Test Period minus cash payments for all federal,

state, provincial, local, foreign and other income taxes paid by the Loan

Parties during such Test Period minus all capital expenditures (determined in

accordance with GAAP) for such Test Period to the extent paid in cash to (b)

Consolidated Fixed Charges for such Test Period.

"FOREIGN LENDER" means any Lender that is not organized under the laws of the

jurisdiction in which the Borrower is resident for tax purposes and that is not

otherwise considered or deemed in

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respect of any amount payable to it hereunder or under any Loan Document to be

resident for income tax or withholding tax purposes in the jurisdiction in which

the Borrower is resident for tax purposes by application of the laws of that

jurisdiction. For purposes of this definition Canada and each Province and

Territory thereof shall be deemed to constitute a single jurisdiction and the

United States of America, each State thereof and the district of Columbia shall

be deemed to constitute a single jurisdiction.

"FOREIGN SUBSIDIARY" shall have the meaning assigned to such term in the U.S.

Revolving Credit Agreement.

"FUNDING AGENT" shall have the meaning assigned to such term in the opening

paragraph hereof.

"GAAP" shall mean generally accepted accounting principles in the United States

applied on a consistent basis and subject to the terms of Section 1.3.

"GOVERNMENTAL AUTHORITY" shall mean the government of Canada, any other foreign

country or nation or any political subdivision thereof, whether state,

provincial or local, and any agency, authority, instrumentality, regulatory

body, court, central bank or other entity exercising executive, legislative,

judicial, taxing, regulatory or administrative powers or functions of or

pertaining to government (whether foreign or domestic).

"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any legally binding

obligation, contingent or otherwise, of the guarantor guaranteeing or having the

economic effect of guaranteeing any Indebtedness or other obligation of any

other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or

indirectly and including any obligation, direct or indirect, of the guarantor

(a) to purchase or pay (or advance or supply funds for the purchase or payment

of) such Indebtedness or other obligation or to purchase (or to advance or

supply funds for the purchase of) any security for the payment thereof, (b) to

purchase or lease property, securities or services for the purpose of assuring

the owner of such Indebtedness or other obligation of the payment thereof, (c)

to maintain working capital, equity capital or any other financial statement

condition or liquidity of the primary obligor so as to enable the primary

obligor to pay such Indebtedness or other obligation or (d) as an account party

in respect of any letter of credit or letter of guaranty issued in support of

such Indebtedness or obligation; provided, that the term "Guarantee" shall not

include endorsements for collection or deposits in the ordinary course of

business. The amount of any Guarantee shall be deemed to be an amount equal to

the stated or determinable amount of the primary obligation in respect of which

Guarantee is made or, if not so stated or determinable, the maximum reasonably

anticipated liability in respect thereof (assuming such Person is required to

perform thereunder) as determined by such Person in good faith. The term

"Guarantee" used as a verb has a corresponding meaning.

"GUARANTEE AGREEMENT" shall mean a guarantee agreement, guaranteeing the

Obligations, in form and content reasonably satisfactory to the Canadian

Administrative Agent, made by each Guarantor in favour of the Canadian

Collateral Agent for the benefit of the Lenders.

"GUARANTOR" shall mean the Parent, LXE Inc., EMS Holdings Inc., 990834 Ontario

Inc., and each other Subsidiary of the Parent that from time to time enters into

a Guarantee Agreement including in accordance with the requirement set forth in

Section 5.10.

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- 10 -

"HAZARDOUS MATERIALS" means all explosive or radioactive substances or wastes

and all hazardous or toxic substances, wastes or other pollutants, including

petroleum or petroleum distillates, asbestos or asbestos-containing materials,

polychlorinated biphenyls, radon gas, infectious or medical wastes and all other

substances or wastes of any nature regulated pursuant to any Environmental Law.

"HEDGING OBLIGATIONS" of any Person shall mean any and all obligations of such

Person, whether absolute or contingent and howsoever and whensoever created,

arising, evidenced or acquired under (a) any and all Hedging Transactions, (b)

any and all cancellations, buy backs, reversals, terminations or assignments of

any Hedging Transactions and (c) any and all renewals, extensions and

modifications of any Hedging Transactions and any and all substitutions for any

Hedging Transactions.

"HEDGING TRANSACTION" of any Person shall mean any transaction (including an

agreement with respect thereto) now existing or hereafter entered into by such

Person that is a rate swap, basis swap, forward rate transaction, commodity

swap, interest rate option, foreign exchange transaction, cap transaction, floor

transaction, collateral transaction, forward transaction, currency swap

transaction, cross-currency rate swap transaction, currency option or any other

similar transaction (including any option with respect to any of these

transactions) or any combination thereof, whether linked to one or more interest

rates, foreign currencies, commodity prices, equity prices or other financial

measures.

"INDEBTEDNESS" of any Person shall mean, without duplication: (a) obligations of

such Person for borrowed money, (b) obligations of such Person evidenced by

bonds, debentures, notes or other similar instruments, (c) obligations of such

Person in respect of the deferred purchase price of property or services (other

than trade payables incurred in the ordinary course of business on terms

customary in the trade), (d) obligations of such Person under any conditional

sale or other title retention agreement(s) relating to property acquired by such

Person, (e) Capital Lease Obligations of such Person, (f) obligations,

contingent or otherwise, of such Person in respect of letters of credit,

acceptances or similar extensions of credit, (g) all indebtedness or other

obligations of another Person secured by any Lien on property owned by such

Person, whether or not such indebtedness or obligations have been assumed by

such Person, (h) all obligations of such Person, contingent or otherwise, to

purchase, redeem, retire or otherwise acquire for value any capital stock or

other security of such Person, (i) off-balance sheet liability retained in

connection with asset securitization programs, Synthetic Leases, sale and

leaseback transactions or other similar obligations arising with respect to any

other transaction which is the functional equivalent of or takes the place of

borrowing but which does not constitute a liability on the consolidated balance

sheet of such Person and its Subsidiaries, (j) obligations under any Hedging

Transaction or foreign exchange agreement, and (k) guaranties by such Person of

the type of indebtedness described in clauses (a) through (j) immediately above.

For purposes of determining Indebtedness under clause (j) the obligations of the

Borrower or any Subsidiary in respect to any Hedging Transaction at any time

shall be the maximum aggregate amount (giving effect to any netting agreements)

that the Borrower or such Subsidiary would be required to pay if such Hedging

Transaction were terminated at such time.

"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

"INTERCREDITOR AGREEMENT" shall mean that certain Intercreditor Agreement dated

as of the date hereof by and among SunTrust Bank, (in its capacities as U.S.

Administrative Agent, Issuing Bank under the U.S. Revolving Facility and

Swingline Lender under the U.S. Revolving Facility), Bank of

<PAGE>

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America, National Association (Canada branch) (in its capacities as Canadian

Collateral Agent, Administrative Agent, Issuing Bank and Swingline Lender), the

Lenders, the U.S. Lenders and the other parties thereto.

"INTEREST PERIOD" shall mean (a) with respect to any Eurodollar Borrowing, a

period of one, two, three or six months and (b) with respect to a Swingline

Loan, a period of such duration not to exceed 7 days, as the Borrower may

request and the Swingline Lender may agree in accordance with Section 2.5;

provided, that:

(a) the initial Interest Period for such Borrowing shall commence on the

date of such Borrowing (including the date of any conversion from a

Borrowing of another Type) and each Interest Period occurring

thereafter in respect of such Borrowing shall commence on the day on

which the next preceding Interest Period expires;

(b) if any Interest Period would otherwise end on a day other than a

Business Day, such Interest Period shall be extended to the next

succeeding Business Day, unless, in the case of a Eurodollar

Borrowing, such Business Day falls in another calendar month, in

which case such Interest Period would end on the next preceding

Business Day;

begins on the last Business Day of a calendar month or on a day for

which there is no numerically corresponding day in the calendar

month at the end of such Interest Period shall end on the last

Business Day of such calendar month; and

(d) no Interest Period may extend beyond the Commitment Termination Date

or the Swingline Termination Date, as the case may be.

"INVESTMENT" shall have the meaning given such term in Section 7.4.

"ISSUING BANK" shall mean Bank of America, National Association (Canada branch)

in its capacity as an issuer of Letters of Credit pursuant to Section 2.22, and

its successors and assigns in such capacity.

"JUDGMENT CONVERSION DATE" shall have the meaning given such term in Section

10.14.

"JUDGMENT CURRENCY" shall have the meaning given such term in Section 10.14.

"LC COMMITMENT" shall mean that portion of the Aggregate Revolving Commitments

that may be used by the Borrower for the issuance of Letters of Credit in an

aggregate stated amount not to exceed U.S.$30,000,000.

"LC DISBURSEMENT" shall mean a payment made by the Issuing Bank pursuant to a

Letter of Credit.

"LC DOCUMENTS" shall mean the Letters of Credit and all applications, agreements

and instruments relating to the Letters of Credit.

"LC EXPOSURE" shall mean, at any time, the sum of (a) the aggregate undrawn

amount of all outstanding Letters of Credit at such time, plus (b) the aggregate

amount of all LC Disbursements

<PAGE>

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that have not been reimbursed by or on behalf of the Borrower at such time. The

LC Exposure of any Lender shall be its Pro Rata Share of the total LC Exposure

at such time.

"LENDERS" shall have the meaning assigned to such term in the opening paragraph

of this Agreement and shall include, where appropriate, the Swingline Lender.

"LENDER DEFAULT" shall mean (a) the failure (which has not been cured) of any

Lender to make available its portion of any Borrowing or to fund its portion of

any unreimbursed payment under Section 2.22 or (b) a Lender having notified the

Funding Agent and/or the Borrower that it does not intend to comply with the

obligations under Section 2.2, Section 2.5, and Section 2.22.

"LETTER OF CREDIT" shall mean any standby letter of credit issued pursuant to

Section 2.22 by the Issuing Bank for the account of the Borrower pursuant to the

LC Commitment.

"LEVERAGE RATIO" shall mean, as of any date of determination, the ratio of (a)

Consolidated Total Funded Debt as of such date minus, for any period of

determination from December 31, 2004 through December 31, 2005, all cash and

Permitted Investments held by the Consolidated Parties (excluding (i) any such

cash and/or Permitted Investments subject to any Liens other than in favour of

the Collateral Agent or the Canadian Collateral Agent and (ii) any such cash

and/or Permitted Investments used to satisfy the dispute reserve requirement set

forth in Section 5.13 hereof) plus , any taxes or other costs incurred or to be

incurred by a Foreign Subsidiary in connection with the transfer or repatriation

of such cash and/or Permitted Investments to a Consolidated Party located in the

United States to (b) Consolidated EBITDA for the Test Period; provided, however,

for purposes of Section 2.14 and the defined terms "Applicable Margin" and

"Applicable Percentage", the immediately preceding clause (b) shall be

Consolidated EBITDA for the four fiscal quarters of the Parent ending on or most

recently preceding the date of determination.

"LIBOR" shall mean, for any applicable Interest Period with respect to any

Eurodollar Loan, a rate of interest per annum, calculated on the basis of a 360

day year, equal to:

(a) the simple average (rounded upward, if necessary, to the nearest

whole multiple of 1/100 of one percent) of the rates shown on the

display referred to as the "LIBOR Page" (or any display substituted

therefor) of the Reuters Domestic Money Service with respect to the

banks in the London interbank market named in the display as at

11:00 a.m. (London, England time) on the second Business Day prior

to the first day of the Interest Period, for a deposit period

comparable to the Interest Period; or

(b) if a rate is not determinable pursuant to clause (a) of this

definition at the relevant time, the rate expressed as a rate of

interest per annum on the basis of a year of 360 days, at which

Canadian Dollars are offered by the principal lending office in

London, England of the Funding Agent to prime banks in the London

interbank market at approximately 11:00 a.m. (London, England time)

on the second Business Day prior to the first day of the Interest

Period, in an amount similar to the LIBOR Loan and for a deposit

period comparable to the Interest Period; or

definition at the relevant time, the Base Rate.

<PAGE>

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"LIEN" shall mean any mortgage, pledge, security interest, lien (statutory or

otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,

or other arrangement having the practical effect of the foregoing or any

preference, priority or other security agreement or preferential arrangement of

any kind or nature whatsoever (including any conditional sale or other title

retention agreement and any capital lease having the same economic effect as any

of the foregoing).

"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Notes, the LC

Documents, all Notices of Borrowing, all Notices of Conversion/Continuation, all

Guarantee Agreements, the Collateral Documents required to be entered into

pursuant to the terms hereof, and any and all other instruments, agreements,

documents and writings executed in connection with any of the foregoing.

"LOAN PARTIES" shall mean the Borrower and the Guarantors.

"LOANS" shall mean all Revolving Loans and Swingline Loans in the aggregate or

any of them, as the context shall require.

"MACDONALD DETTWILER" means MacDonald, Dettwiler and Associates Ltd.

"MACDONALD DETTWILER CONTRACT" means RADARSAT-2 Payload Subcontract

#SC29352RC/SC29352RC, as amended between the Borrower and MacDonald Dettwiler

originally entered into on September 1, 1998.

"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act, condition

or occurrence of whatever nature (including any adverse determination in any

litigation, arbitration, or governmental investigation or proceeding), a

material adverse change in, or a material adverse effect on, (a) the business,

operations, condition (financial or otherwise), prospects, assets, income or

liabilities of the Consolidated Parties taken as a whole, (b) the ability of the

Borrower or any Guarantor to perform any of its respective obligations under the

Loan Documents, (c) the rights, remedies or benefits available to the Canadian

Administrative Agent, the Funding Agent, the Canadian Collateral Agent, the

Issuing Bank and/or the Lenders under any of the Loan Documents, (d) the

legality, validity, binding effect or enforceability of any of the Loan

Documents or (e) the attachment, perfection or priority of any Lien of the

Canadian Collateral Agent under the Security Agreements, the Pledge Agreements

or any other Loan Document.

"MATERIAL SUBSIDIARY" shall mean at any time of determination any direct or

indirect Subsidiary of the Parent having: (a) assets in an amount equal to

U.S.$1,000,000 or more; (b) revenues in an amount which equals or exceeds 2.5%

of the total revenues of the Parent and its Subsidiaries on a consolidated basis

for the 12-month period ending on the last day of the most recent fiscal quarter

of the Parent at such time; or (c) revenues in an amount which, together with

the revenues of all other direct or indirect Subsidiaries which are not Material

Subsidiaries, equals or exceeds 10% of the total revenues of the Parent and its

Subsidiaries on a consolidated basis for the 12-month period ending on the last

day of the most recent fiscal quarter of the Parent at such time.

"MOODY'S" shall mean Moody's Investors Service, Inc.

"NET PROCEEDS" shall mean (a) in the case of any Debt Issuance, the aggregate

cash proceeds received by the Borrower and its Subsidiaries less Transaction

Costs, (b) in the case of any Casualty

<PAGE>

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Event, the aggregate cash proceeds of insurance, condemnation awards and other

compensation received by the Borrower and its Subsidiaries in respect of such

Casualty Event less reasonable fees and expenses incurred by the Borrower and

its Subsidiaries in connection therewith, (c) in the case of any Asset

Disposition, the aggregate amount of all cash payments at any time received by

the Borrower and its Subsidiaries in connection with such Asset Disposition less

(i) Transaction Costs, (ii) Indebtedness to the extent the amount thereof is

secured by a Lien on the property that is the subject of such Asset Disposition

and the transferee of (or holder of the Lien on) such property requires that

such Indebtedness be repaid as a condition to such Asset Disposition, and (iii)

any income or transfer taxes paid or reasonably estimated by the Borrower to be

payable by the Borrower and its Subsidiaries as a result of such Asset

Disposition and (d) in the case of any Equity Offering, the aggregate cash

proceeds received by the Borrower and its Subsidiaries less Transaction Costs.

"NET WORTH" shall mean, as of any date, the total shareholders' equity of the

Consolidated Parties that would be reflected on the Borrower's consolidated

balance sheet as of such date prepared in accordance with GAAP.

"NON-DEFAULTING LENDER" shall mean and include each Lender other than a

Defaulting Lender.

"NON-U.S. SUBSIDIARY" shall mean any direct or indirect Subsidiary of the Parent

that is organized under the laws of a jurisdiction other than United States of

America or any political subdivision thereof.

"NOTES" shall mean, collectively, the Revolving Credit Notes and the Swingline

Note.

"NOTICES OF BORROWING" shall mean, collectively, the Notices of Revolving

Borrowing and the Notices of Swingline Borrowing.

"NOTICE OF CONVERSION/CONTINUATION" shall mean the notice given by the Borrower

to the Funding Agent in respect of the conversion or continuation of an

outstanding Borrowing as provided in Section 2.10(b) hereof.

"NOTICE OF REVOLVING BORROWING" shall have the meaning as set forth in Section

2.3.

"NOTICE OF SWINGLINE BORROWING" shall have the meaning as set forth in Section

2.5.

"OBLIGATIONS" shall mean all amounts owing by the Borrower or the Guarantors to

the Canadian Administrative Agent, the Funding Agent, the Canadian Collateral

Agent, the Issuing Bank or any Lender (including the Swingline Lender) pursuant

to or in connection with this Agreement or any other Loan Document, including

without limitation, all principal, interest (including any interest accruing

after the filing of any petition in bankruptcy or the commencement of any

insolvency, reorganization or like proceeding relating to the Borrower, whether

or not a claim for post-filing or post-petition interest is allowed in such

proceeding), all reimbursement obligations, fees, expenses, indemnification and

reimbursement payments, costs and expenses (including all actual and reasonable

fees and expenses of counsel to the Canadian Administrative Agent, the Funding

Agent, the Canadian Collateral Agent and any Lender (including the Swingline

Lender) incurred pursuant to this Agreement or any other Loan Document), whether

direct or indirect, absolute or contingent, liquidated or unliquidated, now

existing or hereafter arising hereunder or thereunder, and all

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Hedging Obligations owed to the Canadian Administrative Agent, the Funding

Agent, any Lender or any of their Affiliates incurred in compliance with Section

7.10 and all obligations and liabilities incurred in connection with collecting

and enforcing the foregoing, together with all renewals, extensions,

modifications or refinancings thereof.

"OTHER TAXES" shall mean any and all present or future stamp or documentary

taxes or any other excise or property taxes, charges or similar levies arising

from any payment made hereunder or from the execution, delivery or enforcement

of, or otherwise with respect to, this Agreement or any other Loan Document.

"PARENT" shall mean EMS Technologies, Inc.

"PARTICIPANT" shall have the meaning set forth in Section 10.4(d).

"PAYMENT OFFICE" shall mean the office of the Funding Agent located at 200 Front

Street West, Suite 2700, Toronto, Ontario, or such other location as to which

the Funding Agent shall have given written notice to the Borrower and the other

Lenders.

"PAYOFF LETTER" means a letter, in form and substance reasonably satisfactory to

the Canadian Administrative Agent, from all Existing Lenders, notifying the

Canadian Administrative Agent and the Borrower of the amount necessary to repay

in full all of the obligations of the Borrower and its Subsidiaries to the

Existing Lenders and committing to terminate and release any and all Liens, if

any, existing in favour of the Existing Lenders in the properties and assets of

the Borrower or any Subsidiary.

"PERMITTED ENCUMBRANCES" shall mean:

(a) Liens imposed by law for taxes, rates, assessments or other charges

of Governmental Authorities not yet due or which are being contested

in good faith by appropriate proceedings and with respect to which

adequate reserves are being maintained in accordance with GAAP;

(b) inchoate or statutory Liens of landlords and Liens of carriers,

warehousemen, mechanics, materialmen, craftsmen, builders,

contractors, architects, engineers, subcontractors, and other Liens

imposed by law created in the ordinary course of business for

amounts not yet due or which are being contested in good faith by

appropriate proceedings and with respect to which adequate reserves

are being maintained in accordance with GAAP;

compliance with workers' compensation, unemployment insurance,

employment insurance and other social security laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,

statutory obligations, surety and appeal bonds, performance bonds

and other obligations of a like nature, in each case in the ordinary

course of business and Liens resulting therefrom;

<PAGE>

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(e) judgment and attachment liens not giving rise to an Event of Default

or Liens created by or existing from any litigation or legal

proceeding that are currently being contested in good faith by

appropriate proceedings and with respect to which adequate reserves

are being maintained in accordance with GAAP; and

(f) servitudes, easements, zoning restrictions, rights-of-way and

similar encumbrances on real property imposed by law or arising in

the ordinary course of business that do not secure any monetary

obligations and do not materially detract from the value of the

affected property or materially interfere with the ordinary conduct

of business of the Borrower and its Subsidiaries taken as a whole;

(g) title defects or irregularities which are of a minor nature and

which do not materially reduce the value of the affected asset or

materially interfere with the use of such asset;

(h) the reservations, limitations, provisos and conditions, if any,

expressed in any original grant from the Crown of any real property

or any interest therein which do not materially reduce the value of

the affected asset or materially interfere with the use of such

asset;

(i) Liens given to a public utility or any municipality or governmental

or other public authority when required by such utility or other

authority in connection with the operation of business or the

ownership of assets which do not materially reduce the value of the

affected asset or materially interfere with the use of such asset;

(j) the right reserved to or vested in any Government Authority by any

statutory provision or by the terms of any lease, licence,

franchise, grant or permit of the Person, to terminate any such

lease, licence, franchise, grant or permit, or to require annual or

other payments as a condition to the continuance thereof;

(k) Liens in favour of the Canadian Collateral Agent, U.S. Collateral

Agent or Canadian Administrative Agent created by the Collateral

Documents;

(l) the Liens disclosed in Schedule 7.2; provided that such Lien shall

not apply to any other property or asset of the Borrower or any

Subsidiary;

(m) other Liens not referred to in the preceding clauses which have been

expressly consented to in writing by the Canadian Administrative

Agent; and

(n) Liens in favour of CIBC in cash on deposit with CIBC in deposit

account number 05-59911 Transit #2 to secure obligations of the

Canadian Borrower described under that certain letter agreement

dated December 13, 2004 between CIBC and the Borrower; provided,

that such cash collateral shall not at any time exceed

U.S.$4,709,369.

"PERMITTED INVESTMENTS" shall mean:

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(a) direct obligations of, or obligations the principal of and interest

on which are unconditionally guaranteed by, the United States or

Canada (or by any agency thereof to the extent such obligations are

backed by the full faith and credit of the United States or the

Government of Canada), in each case maturing within one year from

the date of acquisition thereof;

(b) commercial paper having the highest rating, at the time of

acquisition thereof, of S&P or Moody's and in either case maturing

within 12 months from the date of acquisition thereof;

maturing within 360 days of the date of acquisition thereof issued

or guaranteed by or placed with, and money market deposit accounts

issued or offered by, any domestic office of any commercial bank

organized under the laws of the United States or any state thereof

or the laws of Canada which has a combined capital and surplus and

undivided profits of not less than U.S.$500,000,000;

(d) fully collateralized repurchase agreements with a term of not more

than 30 days for securities described in clause (a) above and

entered into with a financial institution satisfying the criteria

described in clause (c) above;

(e) mutual funds investing solely in any one or more of the Permitted

Investments described in clauses (a) through (d) above; and

(f) Investments in CIBC to the extent provided in clause (n) of the

defined term Permitted Encumbrances.

"PERSON" shall mean any individual, partnership, firm, corporation, association,

joint venture, limited liability company, trust or other entity, or any

Governmental Authority.

"PLEDGE AGREEMENT" shall mean a securities pledge agreement in favour of the

Canadian Collateral Agent in form and content satisfactory to the Canadian

Administrative Agent.

"PLEDGE AGREEMENTS" shall mean the U.S. Pledge Agreement and the Pledge

Agreement.

"PRO RATA SHARE" shall mean, with respect to any Lender at any time, a

percentage, the numerator of which shall be the sum of such Lender's Revolving

Commitment and the denominator of which shall be the sum of all Lenders'

Revolving Commitments; or if the Revolving Commitments have been terminated or

expired or if the Loans have been declared to be due and payable, a percentage,

the numerator of which shall be such Lender's Revolving Credit Exposure and the

denominator of which shall be the aggregate Revolving Credit Exposure of all

Lenders.

"REAL ESTATE DOCUMENTS" shall mean collectively, all mortgages, deeds of trust,

deeds of hypothec, deeds to secure debt, assignments of rents and leases,

environmental indemnity agreements, and all other documents, instruments,

agreements and certificates executed and delivered by any Loan Party to the U.S.

Administrative Agent, the U.S. Collateral Agent, the Funding Agent, the Canadian

Administrative Agent or the Canadian Collateral Agent in connection with the

foregoing.

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"REAL PROPERTY" shall mean all real property owned or leased by the Borrower or

Guarantor.

"REGULATION D" shall mean Regulation D of the Board of Governors of the U.S.

Federal Reserve System, as the same may be in effect from time to time, and any

successor regulations.

"RELATED PARTIES" shall mean, with respect to any specified Person, such

Person's Affiliates and the respective directors, officers, employees, agents

and advisors of such Person and such Person's Affiliates.

"RELEASE" shall mean any release, spill, emission, leaking, dumping, injection,

pouring, deposit, disposal, discharge, dispersal, leaching or migration into the

environment (including ambient air, surface water, groundwater, land surface or

subsurface strata) or within any building, structure, facility or fixture.

"REQUIRED LENDERS" shall mean, at any time, Non-Defaulting Lenders holding

66-2/3% or more of the aggregate outstanding Revolving Credit Exposures of all

Non-Defaulting Lenders at such time or if the Non-Defaulting Lenders have no

Revolving Credit Exposure outstanding, then Non-Defaulting Lenders holding

66-2/3% or more of the Aggregate Revolving Commitments of all Non-Defaulting

Lenders, provided however, that if only two (2) Non-Defaulting Lenders exist

hereunder, Required Lenders shall mean both such Non-Defaulting Lenders.

"REQUIREMENT OF LAW" for any Person shall mean the articles or certificate of

incorporation, bylaws, partnership certificate and agreement, or limited

liability company certificate of organization and agreement, as the case may be,

and other organizational and governing documents of such Person, and any law,

treaty, rule or regulation, or determination of a Governmental Authority, in

each case applicable to or binding upon such Person or any of its property or to

which such Person or any of its property is subject.

"RESPONSIBLE OFFICER" shall mean any of the president, the chief executive

officer, the chief operating officer, the chief financial officer, the

treasurer, controller or a vice president in the finance division of the

Borrower or such other representative of the Borrower as may be designated in

writing by any one of the foregoing with the consent of the Canadian

Administrative Agent; and, with respect to the financial covenants only, the

chief financial officer or the treasurer of the Borrower.

"RESTRICTED INVESTMENT" shall mean Investments in joint ventures and in

Subsidiaries of the Parent that are not Consolidated Subsidiaries.

"RESTRICTED PAYMENT" shall have the meaning set forth in Section 7.5.

"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the obligation

of such Lender to make Revolving Loans to the Borrower and to participate in

Letters of Credit and Swingline Loans in an aggregate principal amount not

exceeding the amount set forth with respect to such Lender on the signature

pages to this Agreement, or in the case of a Person becoming a Lender after the

Closing Date, the amount of the assigned "Revolving Commitment" as provided in

the Assignment and Acceptance Agreement executed by such Person as an assignee,

as the same may be changed pursuant to the terms hereof.

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"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Lender at any time,

the sum at such time, without duplication, of (a) the outstanding principal

amount of such Lender's Revolving Loans, (b) such Lender's LC Exposure and (c)

such Lender's Swingline Exposure.

"REVOLVING CREDIT NOTE" shall mean a promissory note of the Borrower payable to

the order of a requesting Lender in the principal amount of such Lender's

Revolving Commitment, in substantially the form of Exhibit C.

"REVOLVING LOAN" shall mean a loan made by a Lender (other than the Swingline

Lender in its capacity as such) to the Borrower under its Revolving Commitment,

which may be either a Base Rate Loan or a Eurodollar Loan.

"S&P" shall mean Standard & Poor's.

"SALE AND PREPAYMENT EVENT" shall mean the consummation of the sale of Space &

Technology / Montreal and the making of the prepayment required under Section

2.11(b)(i).

"SECURITY AGREEMENTS" shall mean the U.S. Security Agreement and the Canadian

Security Agreements.

"SOLVENT" means, with respect to the Borrower as of a particular date, (a) the

Borrower is able to pay its debts and other liabilities, contingent obligations

and other commitments as they mature in the normal course of business, (b) the

Borrower does not intend to, and does not believe that it will, incur debts or

liabilities beyond the Borrower's ability to pay as such debts and liabilities

mature in their ordinary course, (c) the Borrower is not engaged in a business

or a transaction, and is not about to engage in a business or a transaction, for

which the Borrower's assets would constitute unreasonably small capital after

giving due consideration to the prevailing practice in the industry in which the

Borrower is engaged or is to engaged, and (d) the aggregate fair saleable value

of the assets of the Borrower will exceed its debts and other liabilities

(including contingent, subordinated, unmatured and unliquidated debts and

liabilities). For purposes of this definition, "debt" means any liability on a

claim, and "claim" means (i) a right to a payment or (ii) a right to an

equitable remedy for breach of performance, if in light of all of the facts and

circumstances existing at such time, such right can reasonably be expected to

give rise to an actual or matured liability.

"SPACE & TECHNOLOGY / MONTREAL" shall mean the Space & Technology / Montreal

division of the Borrower.

"STATEMENT OF FUNDS FLOW" shall mean that certain Statement of Funds Flow dated

as of December 13, 2004 executed by the Borrower and the Canadian Administrative

Agent on behalf of the Lenders.

"STATUTORY RESERVE RATE" shall mean the aggregate of the maximum reserve

percentages (including, without limitation, any emergency, supplemental, special

or other marginal reserves) expressed as a decimal (rounded upwards to the next

1/100th of 1%) in effect on any day to which any Lender is subject with respect

to the Adjusted LIBOR pursuant to either (i) regulations issued by the Board of

Governors of the Federal Reserve System (or any Governmental Authority

succeeding to any of its principal functions) with respect to eurocurrency

funding (currently referred to as "eurocurrency liabilities" under Regulation

D); or (ii) the capital adequacy guidelines issued from time to time by the

Office of the Superintendent of Financial Institutions Canada. Eurodollar Loans

<PAGE>

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shall be deemed to constitute eurocurrency funding and to be subject to such

reserve requirements without benefit of or credit for proration, exemptions or

offsets that may be available from time to time to any Lender under Regulation D

or equivalent capital adequacy guidelines. The Statutory Reserve Rate shall be

adjusted automatically on and as of the effective date of any change in any

reserve percentage.

"STM PREPAYMENT AMOUNT" shall mean the U.S. Dollar Equivalent of the amount

prepaid by the Borrower in connection with the Sale and Prepayment Event;

provided that such U.S. Dollar Equivalent shall be rounded down to the nearest

multiple of U.S.$500,000.

"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any

corporation, partnership, joint venture, limited liability company, association

or other entity the accounts of which would or should be consolidated with those

of the parent in the parent's consolidated financial statements if such

financial statements were prepared in accordance with GAAP as of such date, as

well as any other corporation, partnership, joint venture, limited liability

company, association or other entity (a) of which securities or other ownership

interests representing more than 50% of the equity or more than 50% of the

ordinary voting power, or in the case of a partnership, more than 50% of the

general partnership interests are, as of such date, owned, Controlled or held,

or (b) that is, as of such date, otherwise Controlled by the parent or one or

more subsidiaries of the parent or by the parent and one or more subsidiaries of

the parent.

"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to make

Swingline Loans in an aggregate principal amount at any time outstanding not to

exceed U.S.$30,000,000.

"SWINGLINE EXPOSURE" shall mean, with respect to each Lender, the principal

amount of the Swingline Loans as to which such Lender is legally obligated

either to make a Base Rate Loan or to purchase a participation in accordance

with Section 2.5, which shall equal such Lender's Pro Rata Share of all

outstanding Swingline Loans.

"SWINGLINE LENDER" shall mean Bank of America, National Association (Canada

branch) and its successors and assigns hereunder.

"SWINGLINE LOAN" shall mean a loan made to the Borrower by the Swingline Lender

under the Swingline Commitment.

"SWINGLINE NOTE" shall mean the promissory note of the Borrower payable to the

order of the Swingline Lender in the principal amount of the Swingline

Commitment, substantially the form of Exhibit F.

"SWINGLINE RATE" shall mean, for any Interest Period, the rate as offered by the

Swingline Lender and accepted by the Borrower in writing.

"SWINGLINE TERMINATION DATE" shall mean the date that is five Business Days

prior to the Commitment Termination Date.

"SYNTHETIC LEASE" shall mean a lease transaction under which the parties intend

that (a) the lease will be treated as an "operating lease" by the lessee

pursuant to Statement of Financial Accounting

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Standards No. 13, as amended and (b) the lessee will be entitled to various tax

and other benefits ordinarily available to owners (as opposed to lessees) of

like property.

"TAXES" shall mean any and all present or future taxes, levies, imposts, duties,

deductions, charges or withholdings imposed by any Governmental Authority.

"TEST PERIOD" shall mean, for purposes of calculating and determining compliance

with the financial covenants set forth in Section 6.1 and Section 6.2, a period

of four full fiscal quarters of the Parent, as selected by the Parent out of the

six most recently completed fiscal quarters of the Parent preceding the date of

determination; provided, however, that the Parent shall use the same four fiscal

quarters selected by the Parent when (a) determining and calculating compliance

with the Fixed Charge Coverage Ratio at any time and (b) determining and

calculating compliance with both the Leverage Ratio and the Fixed Charge

Coverage Ratio at any time; provided, further, that any particular quarter

selected by the Parent during any Test Period may only be used once during such

Test Period.

"TRANSACTION COSTS" shall mean, with respect to a given transaction, all

investment banking fees, legal fees, brokerage fees, finder's fees, printing

fees, filing fees and accountant's fees, in each case directly related to such

transaction, and other out-of-pocket costs and expenses incurred by a Loan Party

and directly related to such transaction; provided, that any such fees, costs

and expenses paid to an Affiliate of the Borrower shall be excluded from this

definition.

"TYPE", when used in reference to a Loan or Borrowing, refers to whether the

rate of interest on such Loan, or on the Loans comprising such Borrowing, is

determined by reference to the Adjusted LIBOR or the Base Rate.

"U.S. ADMINISTRATIVE AGENT" shall mean SunTrust Bank, in its capacity as

"Canadian Administrative Agent" under the U.S. Revolving Credit Agreement.

"U.S. COLLATERAL AGENT" shall mean SunTrust Bank, in its capacity as "U.S.

Collateral Agent" under and as defined in the Intercreditor Agreement, or any

other successor who shall become U.S. Collateral Agent pursuant to terms of the

Intercreditor Agreement.

"U.S. DOLLAR(s)" and the sign "U.S. $" shall mean lawful money of the United

States of America.

"U.S. DOLLAR EQUIVALENT" of any amount expressed in a currency that is not U.S.

Dollars, means, on any date, the equivalent amount of U.S. Dollars after giving

effect to a conversion of such amount of such non-U.S. currency to U.S. Dollars

at the buy spot rate quoted for wholesale transactions by the Funding Agent at

approximately 11:00 a.m. on such date of determination in accordance with its

normal practices.

"U.S. FACILITY INDEBTEDNESS" shall mean the Indebtedness of the Parent and the

Subsidiary Loan Parties (as defined in the U.S. Revolving Credit Agreement)

owing to the "Lenders" under and as defined in the U.S. Revolving Credit

Agreement.

"U.S. LENDERS" shall mean each of SunTrust Bank and Bank of America, National

Association and their respective assigns under the U.S. Revolving Credit

Agreement.

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"U.S. LOAN DOCUMENTS" shall mean any or all of the "Loan Documents" (as defined

in the U.S. Revolving Credit Agreement).

"U.S. PATENT SECURITY AGREEMENT" shall have the meaning provided in Section

3.1(b)(xi).

"U.S. PLEDGE AGREEMENT" shall mean the Pledge Agreement in favour of the U.S.

Collateral Agent in substantially the form of Exhibit B-2.

"U.S. REVOLVING CREDIT AGREEMENT" shall mean that certain U.S. Revolving Credit

Agreement dated as December 10, 2004 among the Parent, the U.S. Lenders and

SunTrust Bank, as administrative agent.

"U.S. SECURITY AGREEMENT" shall mean the Security Agreement in favour of the

U.S. Collateral Agent in substantially the form of Exhibit D-2.

"U.S. SUBSIDIARY" shall mean any direct or indirect Subsidiary of the Parent

that is organized under the laws of the United States of America or any

political subdivision thereof.

"U.S. TRADEMARK SECURITY AGREEMENT" has the meaning provided in Section

3.1(b)(xi).

"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary all of the shares of capital

stock or other ownership interests of which (except directors' qualifying

shares, or, in the case of any Subsidiary which is not organized or created

under the laws of the United States of America or any political subdivision

thereof, such nominal ownership interests as are required to be held by third

parties under the laws of the foreign jurisdiction under which such Subsidiary

was incorporated or organized) are at the time directly or indirectly owned by

the Borrower.

SECTION 1.2 CLASSIFICATIONS OF LOANS AND BORROWINGS

For purposes of this Agreement, Loans may be classified and referred

to by Class (e.g. a "Revolving Loan") or by Type (e.g. a "Eurodollar Loan" or

"Base Rate Loan") or by Class and Type (e.g. "Revolving Eurodollar Loan").

Borrowings also may be classified and referred to by Class (e.g. "Revolving

Borrowing") or by Type (e.g. "Eurodollar Borrowing") or by Class and Type (e.g.

"Revolving Eurodollar Borrowing").

SECTION 1.3 ACCOUNTING TERMS AND DETERMINATION

Unless otherwise defined or specified herein, all accounting terms

used herein shall be interpreted, all accounting determinations hereunder shall

be made, and all financial statements required to be delivered hereunder shall

be prepared, in accordance with GAAP as in effect from time to time, applied on

a basis consistent (except for such changes approved by the Parent's independent

public accountants) with the most recent audited consolidated financial

statement of the Parent delivered pursuant to Section 5.1(a); provided, that all

such accounting terms interpreted and accounting determinations made shall, in

any event, include all activities, operations and financial results of Space

&Technology / Montreal and any other discontinued operations of the Parent or

its Subsidiaries as if such division or other discontinued operations were

continuing operations (other than accounting for depreciation and valuation

allowances of such discontinued operations); provided further, that if the

Borrower notifies the Canadian Administrative Agent that the Borrower

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wishes to amend any covenant in Article VI to eliminate the effect of any change

in GAAP on the operation of such covenant (or if the Canadian Administrative

Agent notifies the Borrower that the Required Lenders wish to amend Article VI

for such purpose), then the Borrower's compliance with such covenant shall be

determined on the basis of GAAP in effect immediately before the relevant change

in GAAP became effective, until either such notice is withdrawn or such covenant

is amended in a manner satisfactory to the Borrower and the Required Lenders.

SECTION 1.4 TERMS GENERALLY; RULES OF INTERPRETATION

The definitions of terms herein shall apply equally to the singular

and plural forms of the terms defined. Whenever the context may require, any

pronoun shall include the corresponding masculine, feminine and neuter forms.

The words "include", "includes" and "including" shall be deemed to be followed

by the phrase "without limitation". The word "will" shall be construed to have

the same meaning and effect as the word "shall". In the computation of periods

of time from a specified date to a later specified date, the word "from" means

"from and including" and the word "to" means "to but excluding". Unless the

context requires otherwise (a) any definition of or reference to any agreement,

instrument or other document herein shall be construed as referring to such

agreement, instrument or other document as it was originally executed or as it

may from time to time be amended, restated, supplemented or otherwise modified

(subject to any restrictions on such amendments, supplements or modifications

set forth herein), (b) any reference herein to any Person shall be construed to

include such Person's successors and permitted assigns, (c) the words "hereof",

"herein" and "hereunder" and words of similar import shall be construed to refer

to this Agreement as a whole and not to any particular provision hereof, (d) all

references to Articles, Sections, Exhibits and Schedules shall be construed to

refer to Articles, Sections, Exhibits and Schedules to this Agreement, (e) the

words "asset" and "property" shall be construed to have the same meaning and

effect and to refer to any and all tangible and intangible assets and

properties, including cash, securities, accounts and contract rights, and (f)

all references to a specific time shall be construed to refer to the time in the

city and province of the Funding Agent's principal office, unless otherwise

indicated. To the extent that any of the representations and warranties

contained in Section IV under this Agreement or in any of the other Loan

Documents is qualified by "Material Adverse Effect", then the qualifier "in all

material respects" contained in Section 3.2(b) and the qualifier "in any

material respect" contained in Section 8.1(c) shall not apply. Unless otherwise

indicated, all references to time are references to Eastern Standard Time or

Eastern Daylight Savings Time, as the case may be. Unless otherwise specified in

this Agreement, all references to dollar amounts (without further description)

will mean Canadian Dollars.

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

SECTION 2.1 GENERAL DESCRIPTION OF FACILITIES

Subject to and upon the terms and conditions herein set forth, (a)

the Lenders hereby establish in favour of the Borrower a revolving credit

facility pursuant to which the Lenders severally agree (to the extent of each

Lender's Pro Rata Share up to such Lender's Revolving Commitment) to make

Revolving Loans to the Borrower in accordance with Section 2.2, (b) the Issuing

Bank agrees to issue Letters of Credit in accordance with Section 2.22, (c) the

Swingline Lender agrees to make Swingline Loans in accordance with Section 2.4

and (d) each Lender agrees

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to purchase a participation interest in the Letters of Credit and the Swingline

Loans pursuant to the terms and conditions hereof; provided, that in no event

shall the aggregate principal amount of all outstanding Revolving Loans,

Swingline Loans and outstanding LC Obligations exceed at any time the Aggregate

Revolving Commitments from time to time in effect.

SECTION 2.2 REVOLVING LOANS

Subject to the terms and conditions set forth herein, each Lender

severally agrees to make Revolving Loans to the Borrower from time to time on

any Business Day during the Availability Period, in an aggregate principal

amount outstanding at any time that will not result in (a) such Lender's

Revolving Credit Exposure exceeding such Lender's Revolving Commitment or (b)

the sum of the principal amount of all outstanding Revolving Loans, Swingline

Loans and LC Obligations of all Lenders exceeding the Aggregate Revolving

Commitments. During the Availability Period, the Borrower shall be entitled to

borrow, prepay and reborrow Revolving Loans in accordance with the terms and

conditions of this Agreement.

SECTION 2.3 PROCEDURE FOR REVOLVING BORROWINGS

The Borrower shall give the Funding Agent written notice (or

telephonic notice promptly confirmed in writing) of each Revolving Borrowing

substantially in the form of Exhibit 2.3 attached hereto (a "NOTICE OF REVOLVING

BORROWING") (i) prior to 11:00 a.m. (Toronto, Ontario time) one Business Day

prior to the requested date of each Base Rate Borrowing and (ii) prior to 11:00

a.m. (Toronto, Ontario time) three Business Days prior to the requested date of

each Eurodollar Borrowing. Each Notice of Revolving Borrowing shall be

irrevocable and shall specify: (i) the aggregate principal amount of such

Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),

(iii) the Type of such Revolving Loan comprising such Borrowing, and (iv) in the

case of a Eurodollar Borrowing, the duration of the initial Interest Period

applicable thereto (subject to the provisions of the definition of Interest

Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or

Eurodollar Loans, as the Borrower may request. The aggregate principal amount of

each Eurodollar Borrowing shall be not less than $1,000,000 or a larger multiple

of $500,000, and the aggregate principal amount of each Base Rate Borrowing

shall not be less than $500,000 or a larger multiple of $100,000; provided, that

Base Rate Loans made pursuant to Section 2.5 or Section 2.22(d) may be made in

lesser amounts as provided therein. At no time shall the total number of

Eurodollar Borrowings outstanding at any time exceed six. Promptly following the

receipt of a Notice of Revolving Borrowing in accordance herewith, the Funding

Agent shall advise each Lender of the details thereof and the amount of such

Lender's Revolving Loan to be made as part of the requested Revolving Borrowing.

SECTION 2.4 SWINGLINE COMMITMENT

Subject to the terms and conditions set forth herein, the Swingline

Lender agrees to make Swingline Loans to the Borrower, from time to time from

the Closing Date to the Swingline Termination Date, in an aggregate principal

amount outstanding at any time not to exceed the lesser of (a) the Swingline

Commitment then in effect and (b) the difference between U.S. $30,000,000 and

the aggregate Revolving Credit Exposures of all Lenders. The Borrower shall be

entitled to borrow, repay and reborrow Swingline Loans in accordance with the

terms and conditions of this Agreement. Notwithstanding anything herein to the

contrary, the Borrower is under no obligation to accept any

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offer by the Swingline Lender to make a Swingline Loan, and the Swingline Lender

is under no obligation whatsoever to offer to make a Swingline Loan to the

Borrower.

SECTION 2.5 PROCEDURE FOR SWINGLINE BORROWING; ETC.

(a) the Borrower shall give the Funding Agent written notice (or

telephonic notice promptly confirmed in writing) of each Swingline

Borrowing substantially in the form of Exhibit 2.5 attached hereto

("NOTICE OF SWINGLINE BORROWING") prior to 11:00 a.m. (Toronto,

Ontario time) on the requested date of each Swingline Borrowing.

Each Notice of Swingline Borrowing shall be irrevocable and shall

specify: (i) the principal amount of such Swingline Loan, (ii) the

date of such Swingline Loan (which shall be a Business Day) and

(iii) the account to which the proceeds of such Swingline Loan

should be credited. The Funding Agent will promptly advise the

Swingline Lender of each Notice of Swingline Borrowing. Each

Swingline Loan shall accrue interest at the Swingline Rate and shall

have an Interest Period (subject to the definition thereof) as

agreed between the Borrower and the Swingline Lender. The aggregate

principal amount of each Swingline Loan shall be not less than

$500,000 or a larger multiple of $100,000, or such other minimum

amounts agreed to by the Swingline Lender and the Borrower. The

Swingline Lender will make the proceeds of each Swingline Loan

available to the Borrower in Canadian Dollars in immediately

available funds at the account specified by the Borrower in the

applicable Notice of Swingline Borrowing not later than 3:00 p.m.

(Toronto, Ontario time) on the requested date of such Swingline

Loan. The Funding Agent will notify the Lenders on a quarterly basis

if any Swingline Loans occurred during such quarter.

(b) If (i) any Swingline Loan matures and remains unpaid; (ii) any

Default or Event of Default occurs or (iii) the Swingline Lender's

total amount of outstanding aggregate Revolving Credit Exposures and

Swingline Loans exceed the Swingline Lender's Revolving Commitment,

the Swingline Lender may, on behalf of the Borrower (which hereby

irrevocably authorizes and directs the Swingline Lender to act on

its behalf), give a Notice of Revolving Borrowing to the Funding

Agent requesting the Lenders (including the Swingline Lender) to

make Base Rate Loans in an amount equal to the unpaid principal

amount of any Swingline Loan. Each Lender will make the proceeds of

its Base Rate Loan included in such Borrowing available to the

Funding Agent for the account of the Swingline Lender in accordance

with Section 2.6, which will be used solely for the repayment of

such Swingline Loan.

the sole discretion of the Funding Agent), or is not, made in

accordance with the foregoing provisions, then each Lender (other

than the Swingline Lender) shall purchase an undivided participating

interest in such Swingline Loan in an amount equal to its Pro Rata

Share thereof on the date that such Base Rate Borrowing should have

occurred. On the date of such required purchase, each Lender shall

promptly transfer, in immediately available funds, the amount of its

participating interest to the Funding Agent for the account of the

Swingline Lender. If such Swingline Loan bears interest at a rate

other than the Base Rate, such Swingline Loan shall automatically

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become a Base Rate Loan on the effective date of any such

participation and interest shall become payable on demand.

(d) Each Lender's obligation to make a Base Rate Loan pursuant to

Section 2.5(b) or to purchase the participating interests pursuant

to Section 2.5(c) shall be absolute and unconditional and shall not

be affected by any circumstance, including without limitation (i)

any setoff, counterclaim, recoupment, defense or other right that

such Lender or any other Person may have or claim against the

Swingline Lender, the Borrower or any other Person for any reason

whatsoever, (ii) the existence of a Default or an Event of Default

or the termination of any Lender's Revolving Commitment, (iii) the

existence (or alleged existence) of any event or condition which has

had or could reasonably be expected to have a Material Adverse

Effect, (iv) any breach of this Agreement or any other Loan Document

by the Borrower, the Funding Agent or any Lender or (v) any other

circumstance, happening or event whatsoever, whether or not similar

to any of the foregoing. If such amount is not in fact made

available to the Swingline Lender by any Lender, the Swingline

Lender shall be entitled to recover such amount on demand from such

Lender, together with accrued interest thereon for each day from the

date of demand thereof at the Funding Agent's cost of funds rate.

Until such time as such Lender makes its required payment, the

Swingline Lender shall be deemed to continue to have outstanding

Swingline Loans in the amount of the unpaid participation for all

purposes of the Loan Documents. In addition, such Lender shall be

deemed to have assigned any and all payments made of principal and

interest on its Loans and any other amounts due to it hereunder, to

the Swingline Lender to fund the amount of such Lender's

participation interest in such Swingline Loans that such Lender

failed to fund pursuant to this Section, until such amount has been

purchased in full.

SECTION 2.6 FUNDING OF BORROWINGS

(a) Each Lender will make available each Borrowing in Canadian Dollars

of Revolving Loans to be made by it hereunder on the proposed date

thereof by wire transfer in immediately available funds by 11:00

a.m. (Toronto, Ontario time) to the Funding Agent at the Payment

Office. Swingline Loans will be made as set forth in Section 2.5.

The Funding Agent will make such Loans available to the Borrower by

promptly crediting the amounts that it receives, in like funds by

the close of business on such proposed date, to an account

maintained with the Funding Agent or, at the Borrower's option, by

effecting a wire transfer of such amounts to an account designated

by the Borrower to the Funding Agent.

(b) Unless the Funding Agent shall have been notified by any Lender

prior to 3:00 p.m. (Toronto, Ontario time) one Business Day prior to

the date of a Borrowing in which such Lender is participating that

such Lender will not make available to the Funding Agent such

Lender's share of such Borrowing, the Funding Agent may assume that

such Lender has made such amount available to the Funding Agent on

such date, and the Funding Agent, in reliance on such assumption,

may make available to the Borrower on such date a corresponding

amount. If such corresponding amount is not in fact made available

to the Funding Agent by such Lender on the date of such

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Borrowing, the Funding Agent shall be entitled to recover such

corresponding amount on demand from such Lender together with

interest at a rate per annum equal to the Funding Agent's cost of

funds for such amount for up to two days and thereafter at the rate

specified for such Borrowing. If such Lender does not pay such

corresponding amount forthwith upon the Funding Agent's demand

therefor and the Funding Agent has made the amount of such Borrowing

available to the Borrower, the Funding Agent shall promptly notify

the Borrower, and the Borrower shall immediately pay such

corresponding amount to the Funding Agent together with interest at

the rate specified for such Borrowing. Nothing in this subsection

shall be deemed to relieve any Lender from its obligation to fund

its Pro Rata Share of any Borrowing hereunder or to prejudice any

rights which the Borrower may have against any Lender as a result of

any default by such Lender hereunder.

their respective Pro Rata Shares. No Lender shall be responsible for

any default by any other Lender in its obligations hereunder, and

each Lender shall be obligated to make its Loans provided to be made

by it hereunder, regardless of the failure of any other Lender to

make its Loans hereunder.

SECTION 2.7 INTEREST ELECTIONS; CONVERSIONS; CONTINUATIONS

(a) Each Borrowing initially shall be of the Type specified in the

applicable Notice of Borrowing, and in the case of a Eurodollar

Borrowing, shall have an initial Interest Period as specified in

such Notice of Borrowing. Thereafter, the Borrower may elect to

convert such Borrowing into a different Type or to continue such

Borrowing (subject to satisfaction of any conditions applicable to

Borrowings of that Type), and in the case of a Eurodollar Borrowing,

may elect Interest Periods therefor, all as provided in this

Section. The Borrower may elect different options with respect to

different portions of the affected Borrowing, in which case each

such portion shall be allocated ratably among the Lenders holding

Loans comprising such Borrowing, and the Loans comprising each such

portion shall be considered a separate Borrowing. This Section shall

not apply to Swingline Borrowings, which may not be converted or

continued.

(b) To make an election pursuant to this Section, the Borrower shall

give the Funding Agent prior written notice (or telephonic notice

promptly confirmed in writing) of each Borrowing substantially in

the form of Exhibit 2.7 attached hereto (a "NOTICE OF

CONVERSION/CONTINUATION") that is to be converted or continued, as

the case may be, (x) prior to 11:00 a.m. (Toronto, Ontario time) one

Business Day prior to the requested date of a conversion into a Base

Rate Borrowing and (y) prior to 11:00 a.m. (Toronto, Ontario time)

three Business Days prior to a continuation of or conversion into a

Eurodollar Borrowing. Each such Notice of Conversion/Continuation

shall be irrevocable and shall specify (i) the Borrowing to which

such Notice of Continuation/Conversion applies and if different

options are being elected with respect to different portions

thereof, the portions thereof that are to be allocated to each

resulting Borrowing (in which case the information to be specified

pursuant to clauses (iii) and (iv) shall be specified for each

resulting

<PAGE>

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Borrowing); (ii) the effective date of the election made pursuant to

such Notice of Continuation/Conversion, which shall be a Business

Day, (iii) whether the resulting Borrowing is to be a Base Rate

Borrowing or a Eurodollar Borrowing; and (iv) if the resulting

Borrowing is to be a Eurodollar Borrowing and the duration of the

Interest Period applicable thereto after giving effect to such

election, which shall be a period contemplated by the definition of

"Interest Period". If any such Notice of Continuation/Conversion

requests a Eurodollar Borrowing but does not specify an Interest

Period, the Borrower shall be deemed to have selected an Interest

Period of one month. The principal amount of any resulting Borrowing

shall satisfy the minimum borrowing amount for Eurodollar Borrowings

and Base Rate Borrowings set forth in Section 2.3.

Eurodollar Borrowing, the Borrower shall have failed to deliver a

Notice of Conversion/Continuation, then, unless such Borrowing is

repaid as provided herein, the Borrower shall be deemed to have

elected to convert such Borrowing to a Base Rate Borrowing. No

Borrowing may be converted into, or continued as, a Eurodollar

Borrowing if a Default or an Event of Default exists, unless the

Funding Agent and each of the Lenders shall have otherwise consented

in writing. Further, any Eurodollar Borrowing that may not be

continued as a Eurodollar Borrowing as a result of a Default or

Event of Default shall automatically convert to a Base Rate

Borrowing at the end of then applicable Interest Period, and such

Borrowing shall be subject to the increased interest rate specified

under Section 2.12(c) both before and after the conversion thereof,

such increased interest rate commencing on and as of the date of

such Default or Event of Default. No conversion of any Eurodollar

Loans shall be permitted except on the last day of the Interest

Period in respect thereof.

(d) Upon receipt of any Notice of Conversion/Continuation, the Funding

Agent shall promptly notify each Lender of the details thereof and

of such Lender's portion of each resulting Borrowing.

SECTION 2.8 TERMINATION OF COMMITMENTS

Unless previously terminated, all Revolving Commitments shall

terminate on the Commitment Termination Date, except that the Swingline

Commitment shall terminate on the Swingline Termination Date.

SECTION 2.9 REPAYMENT OF LOANS

(a) The outstanding principal amount of all Revolving Loans shall be due

and payable (together with accrued and unpaid interest thereon) on

the Commitment Termination Date.

(b) The principal amount of each Swingline Loan shall be due and payable

(together with accrued interest thereon) on the earlier of (i) the

last day of the Interest Period applicable to such Loan and (ii) the

Swingline Termination Date.

<PAGE>

- 29 -

SECTION 2.10 EVIDENCE OF INDEBTEDNESS

(a) Each Lender shall maintain in accordance with its usual practice

appropriate records evidencing the Indebtedness of the Borrower to

such Lender resulting from each Loan made by such Lender from time

to time, including the amounts of principal and interest payable

thereon and paid to such Lender from time to time under this

Agreement. The Funding Agent shall maintain appropriate records in

which shall be recorded (i) the Revolving Commitment of each Lender,

(ii) the amount of each Loan made hereunder by each Lender, the

Class and Type thereof and the Interest Period applicable thereto,

(iii) the date of each continuation thereof pursuant to Section 2.7,

(iv) the date of each conversion of all or a portion thereof to

another Type pursuant to Section 2.7, (v) the date and amount of any

principal or interest due and payable or to become due and payable

from the Borrower to each Lender hereunder in respect of such Loans

and (vi) both the date and amount of any sum received by the Funding

Agent hereunder from the Borrower in respect of the Loans and each

Lender's Pro Rata Share thereof. The entries made in such records

shall be prima facie evidence of the existence and amounts of the

obligations of the Borrower therein recorded; provided, that the

failure or delay of any Lender or the Funding Agent in maintaining

or making entries into any such record or any error therein shall

not in any manner affect the obligation of the Borrower to repay the

Loans (both principal and unpaid accrued interest) of such Lender in

accordance with the terms of this Agreement.

(b) At the request of any Lender (including the Swingline Lender) at any

time, the Borrower agrees that it will execute and deliver to such

Lender a Revolving Credit Note and, in the case of the Swingline

Lender only, a Swingline Note, payable to the order of such Lender,

and such Lender agrees, upon receipt of such new Note and request of

the Borrower, such Lender will promptly cancel and return any Note

replaced by such new Note to the Borrower.

SECTION 2.11 OPTIONAL AND MANDATORY PREPAYMENTS

(a) Optional Prepayment. The Borrower shall have the right at any time

and from time to time to prepay any Borrowing, in whole or in part,

without premium or penalty, by giving irrevocable written notice (or

telephonic notice promptly confirmed in writing) to the Funding

Agent no later than (i) in the case of prepayment of any Eurodollar

Borrowing, 11:00 a.m. (Toronto, Ontario time) not less than three

Business Days prior to any such prepayment, (ii) in the case of any

prepayment of any Base Rate Borrowing, not less than one Business

Day prior to the date of such prepayment, and (iii) in the case of

Swingline Borrowings, prior to 11:00 a.m. (Toronto, Ontario time) on

the date of such prepayment. Each such notice shall be irrevocable

and shall specify the proposed date of such prepayment and the

principal amount of each Borrowing or portion thereof to be prepaid.

Upon receipt of any such notice, the Funding Agent shall promptly

notify each affected Lender of the contents thereof and of such

Lender's Pro Rata Share of any such prepayment. If such notice is

given, the aggregate amount specified in such notice shall be due

and payable on the date designated in such notice, together with

accrued interest to such date on the amount so prepaid in accordance

with Section 2.12(d); provided, that if a Eurodollar

<PAGE>

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Borrowing is prepaid on a date other than the last day of an

Interest Period applicable thereto, the Borrower shall also pay all

amounts required pursuant to Section 2.18. Each partial prepayment

of any Loan (other than a Swingline Loan) shall be in minimum

amounts of $500,000 or larger multiples of $100,000. Each prepayment

of a Borrowing shall be applied ratably to the Loans comprising such

Borrowing.

(b) Mandatory Prepayment

(i) Immediately upon the closing of the sale of Space & Technology

/ Montreal, (a) the Aggregate Revolving Commitment will be

reduced to U.S.$15,000,000 and the Borrower shall forthwith

repay Revolving Loans by the amount, if any, that the

aggregate of (x) the U.S. Dollar Equivalent of Borrowings in

Canadian Dollars then outstanding as Revolving Loans and as

Swingline Loans together with the face amount of all Letters

of Credit issued in any currency other than U.S. Dollars, and

(y) the face amount of all Letters of Credit issued in U.S.

Dollars then outstanding exceeds U.S.$15,000,000; and (b) the

Canadian Administrative Agent and the Canadian Collateral

Agent will, at the request and expense of the Borrower,

complete, execute or deliver such reasonable discharges,

releases and other documents or things as may be necessary to

discharge and release the Liens of the Administrative Agent

and the Canadian Collateral Agent in the property and assets

of the Borrower that were disposed of under or in connection

with the sale of Space & Technology/Montreal.

(ii) Promptly upon (and in any event not later than five Business

Days after) its receipt thereof, the Borrower shall, subject

to clause (v) immediately below, prepay or cause to be prepaid

the outstanding principal amount of Revolving Loans in an

amount equal to 100% of the Net Proceeds from any Debt

Issuance made after the Closing Date, and will deliver to the

Funding Agent, concurrently with such prepayment, a

certificate signed by the Chief Financial Officer of the

Borrower in form and substance satisfactory to the Funding

Agent and setting forth the calculation of such Net Proceeds.

Notwithstanding the foregoing, nothing in this subsection (ii)

shall be deemed to permit any Debt Issuance not expressly

permitted under Section 7.1.

(iii) Promptly upon (and in any event not later than five Business

Days after) its receipt thereof, the Borrower shall, subject

to clause (v) immediately below, prepay or cause to be prepaid

the outstanding principal amount of Revolving Loans in an

amount equal to 50% of the Net Proceeds from any Asset

Disposition (other than the Sale and Prepayment Event and any

other Asset Disposition under Section 7.6(b)) and will deliver

to the Funding Agent, concurrently with such prepayment, a

certificate signed by the Chief Financial Officer of the

Borrower in form and substance satisfactory to the Funding

Agent and setting forth the calculation of such Net Proceeds.

Notwithstanding the foregoing, nothing in this subsection

(iii) shall be

<PAGE>

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deemed to permit any Asset Disposition not expressly permitted

under Section 7.6.

(iv) Not later than thirty days after its receipt of any proceeds

of insurance, condemnation award or other compensation in

respect of any Casualty Event (and in any event upon its

determination not to repair or replace any property subject to

such Casualty Event), the Borrower shall, subject to clause

(v) immediately below, prepay or cause to be prepaid the

outstanding principal amount of Revolving Loans in an amount

equal to 100% of the Net Proceeds from such Casualty Event

(less any amounts theretofore applied, to be applied or

contractually committed to be applied within 180 days after

the occurrence of such Casualty Event to the repair or

replacement of property subject to such Casualty Event) and

will deliver to the Funding Agent, concurrently with such

prepayment, a certificate signed by the Chief Financial

Officer of the Borrower in form and substance satisfactory to

the Funding Agent and setting forth the calculation of such

Net Proceeds.

(v) Each prepayment of Revolving Loans made pursuant to clauses

(ii) through (iv) above shall be applied to reduce the

outstanding principal amount of Revolving Loans, with a

corresponding permanent reduction to the Revolving Commitment

in an amount equal to the amount of the prepayment required by

this subsection (b) until such time as the Aggregate Revolving

Commitment equals U.S.$15,000,000; provided, however, that so

long as a prepayment of the U.S. Facility Indebtedness for the

events described under clauses (ii) through (iv) above would

not have an adverse tax consequence for the Borrower or the

Parent (as reasonably determined by the Parent), each

prepayment of Revolving Loans required to be made pursuant to

clauses (ii) through (iv) above shall be applied to reduce the

outstanding principal amount of Revolving Loans and the

"Revolving Loans" under and as defined in the U.S. Revolving

Credit Agreement, pro rata based on the then outstanding

principal amount under this Agreement and the U.S. Revolving

Credit Agreement, with a corresponding permanent reduction to

the Revolving Commitment hereunder and a corresponding

permanent reduction to the "Revolving Commitment" under and as

defined in the U.S. Revolving Credit Agreement, in each case,

in an amount equal to the amount so prepaid; provided,

further, that the STM Prepayment Amount shall be applied

solely towards the prepayment of the Revolving Loans.

(vi) Each prepayment of Loans made pursuant to this subsection (b)

shall be first applied to the repayment of Base Rate Loans

until all Base Rate Loans are paid in full, and then to

Eurodollar Loans. Each prepayment of a Eurodollar Loan made

pursuant to the provisions of this subsection (b) on a day

other than the last day of the Interest Period applicable

thereto shall be made together with all amounts required under

Section 2.18.

(vii) If the Funding Agent determines that on any day as a result of

currency fluctuations the aggregate of (a) the U.S. Dollar

Equivalent of Borrowings in

<PAGE>

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Canadian Dollars then outstanding as Revolving Loans and as

Swingline Loans together with the face amount of all Letters

of Credit issued in currencies other than U.S. Dollars, and

(b) the face amount of all Letters of Credit issued in U.S.

Dollars then outstanding on such day exceeds the Aggregate

Revolving Commitments then in effect, the Funding Agent shall

notify the Borrower that such an event has occurred, and the

Borrower shall immediately upon receipt of such notice, (i)

repay Revolving Loans in an amount equal to such excess; or

(ii) deposit with the Funding Agent cash or cash equivalents

in an amount of such excess, provided that if it is determined

on any subsequent day that the amount of the deposited amounts

exceeds the amount of such excess, the Borrower may withdraw

the amount by which such excess has been reduced.

December 31, 2005 and on every June 30 and December 31 thereafter,

the Aggregate Revolving Commitment shall be reduced by

U.S.$1,250,000 (or by a lesser amount if applicable) until such time

as the Aggregate Revolving Commitment equals U.S.$22,500,000; for

greater certainty this obligation shall cease at such time, if ever,

that the Revolving Commitment is reduced to U.S.$15,000,000 in

accordance with Section 2.11(b)(i) hereof. If after such reduction

the aggregate amount of Revolving Loans and Swingline Loans together

with the face amount of issued but undrawn Letters of Credit exceeds

the Aggregate Revolving Commitment, the Borrower shall forthwith

prepay Loans in an amount equal to such excess. Each prepayment of

Loans made pursuant to this subsection (c) shall be first applied to

the repayment of Base Rate Loans until all Base Rate Loans are paid

in full, and then to Eurodollar Loans. Each prepayment of a

Eurodollar Loan made pursuant to the provisions of this subsection

applicable thereto shall be made together with all amounts required

under Section 2.18.

SECTION 2.12 INTEREST ON LOANS

(a) The Borrower shall pay interest (i) on each Base Rate Loan at the

Base Rate in effect from time to time plus the Applicable Margin in

effect from time to time for Base Rate Loans, and (ii) on each

Eurodollar Loan at the Adjusted LIBOR for the applicable Interest

Period then in effect for such Eurodollar Loan plus the Applicable

Margin in effect from time to time for Eurodollar Loans.

(b) The Borrower shall pay interest on each Swingline Loan at the

Swingline Rate in effect from time to time.

option of the Required Lenders, the Borrower shall pay interest

("DEFAULT INTEREST") with respect to all Eurodollar Loans at the

rate otherwise applicable for the then-current Interest Period plus

an additional 2% per annum until the last day of such Interest

Period, and thereafter, and with respect to all Base Rate Loans and

all other Obligations hereunder (other than Loans), at the Base Rate

then in effect for Base Rate Loans plus the Applicable Margin for

Base Rate Loans plus an additional 2.0% per annum.

<PAGE>

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While an Event of Default exists and after acceleration, the

Applicable Percentage for the letter of credit fees provided for

under Section 2.13(d) shall be increased by 2.0%. Notwithstanding

anything to the contrary contained in any Loan Document, to the

extent that the charges and security interest created by the

Collateral Documents charge real property or any interest therein

such charges and security interest shall secure interest after the

occurrence of an Event of Default at the same rates as those in

effect prior to such occurrence.

(d) Interest on the principal amount of all Loans shall accrue from and

including the date such Loans are made to but excluding the date of

any repayment thereof, provided such Loans are repaid within the

times provided for hereunder. Interest on all outstanding Base Rate

Loans shall be payable quarterly in arrears on the last day of each

March, June, September and December and on the Commitment

Termination Date. Interest on all outstanding Eurodollar Loans shall

be payable on the last day of each Interest Period applicable

thereto, and, in the case of any Eurodollar Loans having an Interest

Period in excess of three months or 90 days, respectively, on each

day which occurs every three months or 90 days, as the case may be,

after the initial date of such Interest Period, and on the

Commitment Termination Date. Interest on each Swingline Loan shall

be payable on the maturity date of such Loan, which shall be the

last day of the Interest Period applicable thereto, and on the

Swingline Termination Date. Interest on any Loan which is converted

into a Loan of another Type or which is repaid or prepaid shall be

payable on the date of such conversion or on the date of any such

repayment or prepayment (on the amount repaid or prepaid) thereof.

All Default Interest and increased letter of credit fees payable

under subsection (c) of this Section shall be payable on demand.

(e) The Funding Agent shall determine each interest rate applicable to

the Loans hereunder and shall promptly notify the Borrower and the

Lenders of such rate in writing (or by telephone, promptly confirmed

in writing). Any such determination shall be conclusive and binding

for all purposes, absent manifest error.

SECTION 2.13 FEES

(a) Funding Agent's Fees. The Borrower shall pay to the Funding Agent

for its own account fees in the amounts and at the times previously

agreed upon by the Borrower and the Funding Agent.

(b) Canadian Administrative Agent's Fees. The Borrower shall pay to the

Canadian Administrative Agent for its own account, on the Closing

Date and on each anniversary of the Closing Date, an annual agency

fee of U.S.$30,000.

the account of each Lender a commitment fee, which fee shall accrue

at the Applicable Percentage on the average daily amount of the

unused Revolving Commitment of such Lender during the Availability

Period. Accrued commitment fees shall be payable in arrears on the

last day of each March, June, September and December of each year

and on the Commitment Termination Date, commencing on the first such

<PAGE>

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date after the Closing Date. For purposes of computing commitment

fees with respect to the Revolving Commitments, the Revolving

Commitment of each Lender shall be deemed used to the extent of the

outstanding Revolving Loans and LC Exposure of such Lender. Any

Swingline Loans outstanding shall be treated as if such Loan were

unused for purposes of this subsection (b).

(d) Letter of Credit Fees. The Borrower agrees to pay (i) to the Funding

Agent, for the account of each Lender, a letter of credit fee with

respect to its participation in each Letter of Credit, which shall

accrue at the Applicable Percentage then in effect on the average

daily amount of such Lender's LC Exposure (excluding any portion

thereof attributable to unreimbursed LC Disbursements) attributable

to such Letter of Credit during the period from and including the

date of issuance of such Letter of Credit to but excluding the date

on which such Letter of Credit exp

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