CALGARY, ALBERTA, September 19, 2008 - Pursuant to the early warning requirements of applicable Canadian securities laws, Tricap Partners Ltd. ("Tricap") wishes to update its previous early warning report dated August 8, 2008 filed in respect of Birch Mountain Resources Ltd. (the "Corporation").
Under the terms of an Acknowledgement, Waiver and Amending Agreement between the Corporation and Tricap effective August 1, 2008 (the "Amending Agreement"), Tricap and the Corporation agreed to make certain amendments to the Loan Agreement, the Debenture and the Investor Rights Agreement between the Corporation and Tricap dated December 21, 2007, subject to TSX approval. As a result of these amendments, Tricap agreed to the release to the Corporation of certain proceeds from the sale of the South Haul Road that Tricap would have had the right to apply to reduce the indebtedness outstanding to it under the Loan Agreement. In connection with these amendments, Tricap agreed to waive certain defaults under the Loan Agreement on the terms set forth in the Amending Agreement.
Pursuant to the Amending Agreement, the principal amendments to the Debenture include:
- the aggregate principal amount is increased from $31.5 million to $34.5 million to accommodate a $3 million loan amendment fee;
- the applicable interest rate is increased from a variable rate of prime plus 9% to an interest rate of 20%;
- the conversion price is reduced from $0.80 to the lower of $0.40 (the "Initial Price") per common share of the Corporation ("Common Shares") and the current market price at the time of conversion;
- should the Corporation issue equity securities at a price below $0.40 per share, or securities convertible into equity securities with a strike or exercise price below $0.40 per equity security, the Initial Price will be reduced to such lower amount per equity security;
- the restriction on conversion of the Debenture prior to December 31, 2008 is removed, such that the Debenture is convertible in whole or in part into Common Shares at any time throughout the term of the debenture;
- the minimum change of control redemption price (the "Minimum Redemption Price") is amended from 120% to 150%. On January 1, 2009, the Minimum Redemption Price will increase to 200%;
- the reinstatement of events of default under the Loan Agreement and the granting of certain board rights in favour of Tricap will occur in the event that a sale agreement or an equity financing of not less than $10 million is not concluded on or before September 30, 2008 and a closing of said transaction does not occur on or before October 31, 2008; and
- a reduction of the loan amendment fee which would reduce the principal amount of the Debenture from $34.5 million to $32.5 million in the event a sale agreement is concluded on or before September 30, 2008 and a closing of said transaction occurs on or before October 31, 2008.
TSX approval of the transaction has been obtained and the transaction was completed on September 8, 2007.
For additional information, or for a copy of the early warning report filed in respect of the above transaction, please contact:
Jim Reid
Tricap Partners Ltd.
Suite 1700, 335-8th Avenue SW
Calgary Alberta T2P 1C9
tel: (403) 770-7220
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release.
Tricap Partners Ltd. was established by Brookfield Asset Management to provide a source of patient, long-term capital and strategic assistance to mid-market companies based in North America. With strong industry and financial management expertise, Tricap is well positioned to assist companies in building value over the long term.
NOTE: This press release contains forward-looking information and other “forward-looking statements” within the meaning of certain securities laws including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. The words “will” and “expected” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements. Although Tricap believes that the anticipated actions expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors which may cause the actual outcome to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: economic and financial conditions; the behaviour of financial markets including fluctuations in interest and exchange rates. We caution that the foregoing list of important factors that may affect future results is not exhaustive. The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.
