Hampton Financial Corporation Announces Closing of Debenture Loans and Loan Bonuses
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TORONTO, Feb. 24, 2020 (GLOBE NEWSWIRE) -- Hampton Financial Corporation (“Hampton” or the “Corporation”) (TSXV: HFC) (TSXV: HFC.PR.A) is pleased
to announce, further to its press release dated February 19, 2020, that it has entered into a non-convertible debenture (a “Debenture") with each of Peter M. Deeb and Axium Capital
Corp. for the principal amount of $175,000 CAD and $1,000,000 CAD, respectively (the “Loans”).
Each Debenture bears interest at the rate of 9.0% per annum payable in equal payments quarterly in arrears on the last day of March, June, September and December in each year, commencing at the end of the first calendar quarter following the issue date (the “Initial Interest Payment”) until the Maturity Date. The Initial Interest Payment will include accrued and unpaid interest for the period from the issue date to the end of the first calendar quarter following the issue date. Interest will be payable in cash only. The principal amount owing under each Debenture, and any accrued and unpaid interest thereon, will be payable in cash on the date that is 60 months from the issue date (the “Maturity Date”).
In connection with the Loans, the Corporation has issued: (a) to Peter M. Deeb, 87,500 warrants; and (b) to Axium Capital Corp., 500,000 warrants, under TSXV Policy 5.1 – Loans, Loan Bonuses, Finder's Fees and Commissions, subject to the approval of the TSX Venture Exchange (“TSXV”). Each warrant entitles the holder to purchase one subordinate voting share of the Corporation at the exercise price of $0.60 per share for a period of 60 months.
The proceeds from the Loans will be used for working capital and general corporate purposes.
All securities issued are subject to a four-month hold period under applicable securities laws.
The loan from Peter M. Deeb to the Corporation (the “Related Party Loan”) constituted a “related party transaction” for purposes of Multilateral Instrument 61-101 ― Protection of Minority Security Holders in Special Transactions (“MI 61-101”) and Policy 5.9 ― Protection of Minority Security Holders in Special Transactions of the TSXV. The Corporation was not required to obtain a formal valuation for the Related Party Loan as it is not a related party transaction described in any of paragraphs (a) to (g) of the definition of “related party transaction” in MI 61-101. The Corporation relied on an exemption from the minority approval requirements available under MI 61-101 as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Related Party Loan, insofar as it involves interested parties, exceeded 25% of the Corporation’s market capitalization. The Corporation did not file a material change report more than 21 days before the expected date of the closing of the Related Party Loan, as the Corporation deemed the shorter period reasonable in the circumstances so as to be able to avail itself of the proceeds of the Related Party Loan in a timely manner.