Canadian Oil Recovery & Remediation Enterprises Ltd.
TSX VENTURE : CVR

Canadian Oil Recovery & Remediation Enterprises Ltd.

October 07, 2009 13:08 ET

Canadian Oil Recovery & Remediation Enterprises Ltd. Announces Amendment to Major Financing and Target for Closing

TORONTO, ONTARIO--(Marketwire - Oct. 7, 2009) - Canadian Oil Recovery and Remediation Enterprises Ltd. (TSX-V: CVR) ("CORRE" or the "Company"), a provider of leading edge oil recovery and remediation technologies and services, is pleased to announce that it has entered into an amending agreement (the "Amending Agreement") with Al-Najah Advanced Technology Co. Ltd. ("NAT") in respect of its previously announced two-phase financing for aggregate gross proceeds of up to $8.5 million (with the full amount of the financing being for aggregate gross proceeds of up to $10 million (the "Financing")) (see CORRE's press releases dated June 16, July 16, and August 14, 2009 for further details concerning the Financing). The principal terms of the Amending Agreement are as follows:

  • Subject to the satisfaction of certain closing conditions set out in the Amending Agreement and the definitive documents, the NAT portion of the Financing (being an aggregate of up to $8.5 million in gross proceeds) will still occur in two phases, comprised of: (i) an initial issuance of a convertible secured debenture (the "Convertible Secured Debenture") by CORRE to NAT in the principal amount of $4.25 million (the "Phase I Financing"); and (ii) the full or partial exercise by NAT, in its sole discretion, of warrants to purchase common shares of CORRE in the amount of $4.25 million (the "NAT Share Warrants"), to be issued at closing of the Phase I Financing (the "Phase II Financing"). At such closing, $4.25 million (being the principal amount of the Convertible Secured Debenture (the "Principal Amount")) will be advanced by NAT and placed into escrow with NAT's Canadian counsel, $1.4 million of which will become immediately releasable to CORRE upon receipt of final approval of the Financing by the TSX Venture Exchange;
  • Personal guarantees over the aforementioned $1.4 million will be provided to NAT on a joint and several basis from two of CORRE's Founding Shareholders;
  • The remaining $2.85 million of the Principal Amount will remain in escrow until such time as NAT, in its sole discretion, delivers an executed Acceptance Notice to CORRE approving CORRE's five-year business and financial plan (the "Business and Financial Plan"), at which time the balance of such funds will be released to CORRE and immediately thereafter the full Principal Amount will be converted into common shares of CORRE in accordance with the terms of the Convertible Secured Debenture. Notwithstanding the foregoing, in the event that NAT, in its sole discretion, rejects the Business and Financial Plan (which rejection will automatically be deemed to have occurred if NAT does not deliver an Acceptance Notice to CORRE within six months from closing of the Phase I Financing), such $2.85 million will be immediately released from escrow and returned to NAT as a repayment of principal under the Convertible Secured Debenture, without in any way affecting CORRE's obligation to repay the balance of the Principal Amount and interest thereon and perform all of its other obligations under the Convertible Secured Debenture and the other definitive documents.
  • The time for delivery of the initial Business and Financial Plan is extended from three (3) months to four (4) months (followed by a two (2) month period for review by NAT), such that the period for review and acceptance by NAT will expire no later than six (6) monthsfrom the date of the Convertible Secured Debenture. 
  • The Voting Trust and Shareholders' Agreement has also been modified to reflect that NAT's right to appoint a number of directors as is proportionate to its pro rata equity interest (fully diluted) shall take effect upon acceptance by NAT of the Business and Financial Plan. Further, the "top-up private placement right" (whereby NAT will have an opportunity at the commencement of each calendar year to complete a private placement for common shares in order to maintain its pro rata equity interest in CORRE as of the date of closing of the Phase I Financing (assuming the conversion of the Convertible Secured Debenture and the exercise of the NAT Share Warrant on such closing date)) will also take effect only after NAT has accepted the Business and Financial Plan.

Closing of the Phase I Financing will occur as expeditiously as possible upon the satisfaction of both parties, in their sole discretion, of certain standard closing conditions prior to the advance of funds by NAT, including the settlement and delivery of security documents and legal opinions, the registration of security interests, the absence of material adverse change or impairment in respect of CORRE and its assets, the execution and delivery of the definitive transaction documents and ancillary closing documents, and the receipt of final approval from the TSX Venture Exchange.

About CORRE

CORRE is a Canadian company that utilizes its proprietary Advanced Recovery Equipment Systems ("ARES") program to provide five comprehensive solutions for oil recovery and soil remediation. ARES I, II and IV are commercialized technologies offering economically viable and environmentally safe sludge treatment solutions and remediation of oil contaminated sand, soil and solids. ARES III is currently being commercialized for the extraction of oil from tar sands and ARES V represents a bioremediation technology in research and development. CORRE plans to deploy ARES in the oil producing countries of the Middle East and other regions where there is substantial demand for its oil recovery and remediation services.

Forward Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

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