This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.Here is a sample of this item:Q Investments to loan XXL Energy $7.5-million 2008-07-18 17:57 ET - News Release Also In the News (C-XL) XXL Energy Corp
Mr. Michael Price reports
Q INVESTMENTS MAKES $7,500,000 LOAN
Q Investments Ltd. has agreed to loan to XXL Energy Corp. the sum of $7.5-million, to be paid as to $1.5-million in cash and as to $6-million by transferring to XXL 800,000 common shares of Bucking Horse Energy Inc., a Toronto Stock Exchange-listed company, at $7.50 per share. The company and Exxel are related parties under exchange Policy 5.9.
The loan will be evidenced by a loan agreement and secured by a debenture issued by XXL and, subject to the following, will bear interest at the rate of 10 per cent yearly. Interest will be payable monthly and, at the election of XXL, will be payable in either cash or common shares of XXL at the prevailing market price.
The loan will not initially be convertible to equity, but will become convertible if an agreed conversion feature is approved by XXL's minority shareholders at a special general meeting to be convened by XXL. If so approved, the loan will be convertible into units for five years, at the rate of $1.62 in the first two years, $1.78 in the third year, $1.96 in the fourth year and $2.16 in the fifth year. Each unit will consist of one common share of XXL and one warrant entitling the company to purchase one further common share of XXL. The exercise price of the warrants will be equivalent to the prevailing conversion price under the loan at the date the conversion right is exercised. The warrants will expire on the day that is five years from the date of issue or the day upon which the conversion right under the loan expires, whichever is the earlier. If the conversion feature is not approved by XXL's minority shareholders, the interest rate under the loan will escalate to 15 per cent.
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