CON-SPACE Amends Secured Lender Agreement: Financial News

RICHMOND, BRITISH COLUMBIA--(MARKET WIRE)--Nov 6, 2008 -- CON-SPACE Communications Ltd. (the "Company" or "CON-SPACE") (CDNX:CCB.V - News), (http://www.con-space.com), entered into a loan agreement (the "Loan Agreement") dated April 11, 2007 with Turret Oy Ab ("Turret"), a Finnish company, with respect to a CDN$6,000,000 loan made by Turret to the Company, the proceeds of which were utilized for the purchase of the Search Systems Inc. Under the Loan Agreement, there are a number of covenants that the Company must meet, including an earnings covenant to be met beginning at the end of its 2008 fiscal year, namely June 30, 2008. The Company failed to meet that earnings covenant and accordingly is now in default of the Loan Agreement.

The Company has now entered into an amendment agreement (the "Amendment Agreement") with Turret and the Company's subsidiaries, which amends the Loan Agreement and includes provisions that reduce the earnings covenant, reduce the interest rate from 18% per annum to 15% per annum, require the Company to pay $100,000 for costs for Turret, give Turret the right to appoint two directors to the board of directors of the Company and give certain rights to convert the loan by Turret into common shares of the Company. The Amendment Agreement is subject to a number of conditions including regulatory approval, approval by the Company's shareholders to be sought at the Company's annual general meeting set for December 11, 2008 ("Annual General Meeting"), and a satisfactory written waiver agreement with the Company's other two secured creditors.

Pursuant to the Amendment Agreement, Turret has the right to appoint two directors to the board of directors of the Company and it is anticipated that subsequent to the Annual General Meeting, two members of the board will resign and the resulting vacancies will be filled with the Turret nominees. In accordance with the Amendment Agreement, it is expected that the board will increase the number of directors to five comprised of the two Turret nominees, two nominees of senior management of the Company and one independent director.

Subject to the fulfillment of the conditions of the Amendment Agreement and receipt of all necessary regulatory and security holder approval, which is expected in December, 2008 (the "Effective Date"), Turret would initially convert CDN$1,200,000 of principal debt owing under the Loan Agreement into 8,000,000 common shares of the Company at a conversion rate of CDN$0.15 per share. Turret would also convert the 3% unpaid interest that has been accruing on the principal since April 2007, which amount is expected to be approximately CDN$300,000 depending on Effective Date, into common shares of the Company at the same conversion rate, which would convert CDN$300,000 into 2,000,000 common shares of the Company. The conversions of Turret on the Effective Date, collectively, are referred to as the "Initial Conversion".

Turret currently owns 1,500,000 common shares of the Company and warrants exercisable for 675,000 common shares of the Company. On the Initial Conversion, and based on 14,773,380 common shares of the Company currently outstanding, Turret would acquire approximately 10,000,000 common shares of the Company, resulting in aggregate holdings of approximately 11,500,000 common shares, representing 46.4% of the issued and outstanding common shares of the Company, based on 24,773,380 common shares then outstanding.

Under the Amendment Agreement, and subject to the fulfillment of the conditions of the Amendment Agreement and receipt of all necessary regulatory and security holder approvals, Turret would also acquire conversion rights (the "Conversion Rights") with respect to CDN$4,800,000, the remainder of the principal amount owing under the Loan Agreement. The conversion rates are variable, and linked to date of exercise and the existence of certain defaults under the Loan Agreement. Turret may convert up to CDN$4,800,000 at any time. Up to CDN$1,800,000 is convertible at the rate of CDN$0.24 per share between the Effective Date and April 10, 2010, at the rate of CDN$0.36 per share between April 11, 2010 and April 10, 2011, and at the rate of CDN$0.48 per share between April 11, 2011 and April 10, 2012. Up to CDN$3,000,000 is convertible at the rate of CDN$0.48 per share. In the case of certain defaults by the Company and during their continuation under the Loan Agreement, the principal amount of CDN$4,800,000 is convertible at the rate of CDN$0.15 per share between the Effective Date and April 10, 2010, at the rate of CDN$0.20 per share between April 11, 2010 and April 10, 2011, and at the rate of CDN$0.25 per share between April 11, 2011 and April 10, 2012. If the default conversion rates are not applicable, the Conversion Rights would be exercisable for a maximum of 13,750,000 common shares, and Turret would hold 25,250,000 common shares, and if the default conversion rates are applicable, the Conversion Rights would be exercisable for a maximum of 32,000,000 common shares and Turret would hold 43,500,000 common shares.

Pursuant to intercreditor agreements among the Company's three secured lenders, namely Turret, the Company's bank (the "Bank") and the vendors of Search Systems Inc. (the "SSI Vendors"), there are cross-default provisions such that a default under the Turret Loan Agreement constitutes a default under loan agreements with the Bank and the SSI Vendors. As well, the Company is in default of certain financial covenants with the Bank. The Company is currently in negotiations with the Bank and the SSI Vendors to obtain written waivers with respect to those defaults and although there is no certainty that such an agreement will be reached, management of the Company anticipates a favourable outcome such that it will be able to complete the restructuring of its secured debts and continue as a going concern.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless the securities are registered in the United States or an exemption from such registration is available.

About CON-SPACE

CON-SPACE is recognized worldwide as the leading designer and manufacturer of specialized voice communication equipment used by Police, Fire, Rescue, Government Agencies, Militaries, Municipalities and general industry. CON-SPACE has distribution throughout North America, Great Britain, Australia, parts of Asia, South America, and Europe. CON-SPACE also supplies many other manufacturers with private labeled products.

This press release is available on CON-SPACE's official on-line investor relations site for investor commentary, feedback and questions. Investors are asked to visit http://www.agoracom.com and view the CON-SPACE Investor Contact & Information Centre. Alternatively, investors are asked to e-mail all questions and correspondence to CCB@Agoracom.com

Further information is available on the Company's website, www.con-space.com.

DISCLAIMER

This news release contains forward-looking statements which reflect management's current expectations regarding the Company's objectives, plans, goals, strategies, future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements are not guarantees, but only predictions. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, as identified in the Company's disclosure record on www.sedar.com. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise.

SEC Exemption #82-3378

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.