Amounts outstanding under the Existing Credit Agreement will be repaid with a portion of the proceeds of this Offering and with amounts drawn under the New Credit Agreement. The Existing Credit Agreement provides for three credit facilities. The first credit facility (the ‘‘Operating F acility’’), which provides for a $7.0 million 364 day extendable revolving credit facility, was available for working capital and other general corporate purposes. The second facility (the ‘‘T erm F acility’’), which provides for a $25.1 non-revolving reducing four-year term credit facility, was made available in part to finance the acquisition of Orbit by Garant, to repay previously existing credit facilities and to finance a dividend distribution to certain Selling Shareholders. The third facility (the ‘‘Capital Expenditures F acility’’), which provides for a $4.4 million revolving, reducing four-year term credit facility, was available to finance up to 80% of the Company’s ‘‘capital expenditures’’ (as such term is defined in the Existing Credit Agreement). As security for the Existing Credit Agreement, the lender and agent has been granted a first-ranking hypothec and general security agreement and mortgage over all the property of the Company, a pledge and security agreement creating a first-ranking security interest in respect of all shares held in the subsidiaries of Orbit Garant (excluding Soudure R oyale) as well as an assignment of the Company’s interest in all insurance policies. F urthermore, separate guarantee agreements were executed by 4378792 Canada Inc. and Orbit in favour of the lender for full and complete payments and performances of the obligations under the Existing Credit Agreement. F rom January 31, 2007 to March 31, 2008, the Company incurred indebtedness under its Operating F acility to support the growth of the business and corresponding requirement for increased working capital and funds for new drills and supporting equipment. As at March 31, 2008, approximately $6.7 million was outstanding under these facilities. Approximately $25.1 million was incurred under the T erm F acility in January 2007 to finance the acquisition of Orbit and the re-organization of Garant. As at March 31, 2008, the principal amount outstanding on this facility was $21.9 million. In addition, during December 2007, the Company borrowed $1.95 million under its Capital Expenditure F acility to reduce the amount drawn on the Operating F acility primarily related to new drills and supporting equipment purchased during the prior 10 months. As at March 31, 2008 the amount outstanding on the Capital Expenditure F acility was $1.8 million. Orbit Garant has entered into a commitment letter with the two Schedule I banks as lenders (the ‘‘Banks’’) providing for a new credit agreement (the ‘‘New Credit Agreement’’) to be entered into on Closing. The New Credit Agreement will provide for a $7.0 million 364 day revolving credit facility (‘‘F acility A ’’), a $20.0 million non-revolving, reducing four-year term credit facility (‘‘F acility B’’) and a $6.0 million non-revolving reducing four-year term facility (‘‘F acility C ’’). The New Credit Agreement will provide that F acility A can be used for working capital and other current operating requirements. The New Credit Agreement will provide that F acility B can be used to refinance the outstanding balance under the Existing Credit Agreement and to finance future acquisitions. Under the terms of the New Credit Agreement, Orbit Garant will be required to make prescribed quarterly repayments on F acility B. The New Credit Agreement will provide that F acility C can be used to finance up to 80% of the Company’s ‘‘capital expenditures’’ (as such term is defined in the New Credit Agreement). Under the terms of the New Credit Agreement, Orbit Garant will be required to make prescribed quarterly repayments on F acility C. Orbit Garant’s ability to draw down amounts under the New Credit Agreement will be subject to certain requirements, including that it complies with certain financial covenants. The facilities will be available in the form of prime rate loans, banker’s acceptances, and LIBOR loans. Borrowings under the New Credit Agreement will be at variable rates of interest. The applicable margins for F acility A will vary from the applicable margins for F acilities B and C. F or all three facilities the applicable margins vary according to the ratio of total debt to EBITD A. As security for the New Credit Agreement, the Bank will be granted a first-ranking hypothec and general security agreement and mortgage over all the property of the Company. F urthermore, separate guarantee agreements will be executed by all of Orbit Garant’s subsidiaries (other than X-Spec) in favour of the Bank for full and complete payments and performances of the obligations under the New Credit Agreement. As at March 31, 2008, the Company had approximately $30,417,072 outstanding indebtedness under the Existing Credit Agreement, which will be repaid from a portion of the proceeds of this Offering and from approximately $9,010,376 drawn under F acility B of the New Credit Agreement. 40