TeraGo Networks Establishes $19 Million Credit Facility

TORONTO, ONTARIO--(Marketwire - May 9, 2011) - TeraGo Inc. (TSX:TGO) (www.terago.ca), a leading network service provider to businesses in Canada, today announced that, through its wholly owned subsidiary TeraGo Networks Inc, it has completed an agreement to establish a $19 million credit facility with the Royal Bank of Canada (RBC), Knowledge Based Industries Banking Group - Ontario.

The new facility essentially refinances, at a lower interest rate, an existing $10 million facility with the Business Development Bank of Canada (BDC) and adds incremental financing for TeraGo's recently announced asset purchase of MetroBridge Networks International Inc.

The agreement includes three new senior term debt facilities totalling $16 million and also includes a $3 million operating line of credit that replaces the existing $3.5 million line of credit with RBC on similar terms.

The additional $16 million in senior term debt will be available to TeraGo in 3 facilities:

• $7.5 million to immediately repay the drawn portion of TeraGo's senior term credit facility with BDC;
• $5.5 million to finance the MetroBridge purchase; and
• $3 million available for general working capital purposes to fund continued growth.

TeraGo has the option of choosing a floating interest rate, at prime plus 1.65%, or a fixed rate on the senior term debt. The new facility is principally secured by a general security agreement over the Company's assets.

About TeraGo Networks

TeraGo Networks Inc. provides small and medium sized businesses with carrier-grade wireless broadband, data and voice communications services. The national network service provider owns and manages its wireless IP network servicing more than 5,300 customer locations in 43 major markets across Canada including Toronto, Montreal, Ottawa, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and is a wholly owned subsidiary of TeraGo Inc. (TSX:TGO). More information about TeraGo is available at www.terago.ca.

About RBC

Royal Bank of Canada (TSX:RY)(NYSE:RY) and its subsidiaries operate under the master brand name of RBC. We are Canada's largest bank as measured by assets and market capitalization and one of North America's leading diversified financial services companies serving more than 15 million personal, business, public sector and institutional clients throughout offices in Canada, the U.S. and 36 other countries. For more information, please visit www.rbc.com.

RBC's Knowledge Based Industries Group "KBI" services the needs of Information Technology, Life Sciences, Media & Entertainment and Cleantech companies across Canada. The KBI Group was established in 1994, comprises specialized account managers and a dedicated risk adjudication group that understands the unique characteristics of KBI companies. For more information visit www.rbcroyalbank.com/technology.