CALGARY, AB--(Marketwired - October 12, 2016) - Prince Resources Corporation (the "Company" or " PRC") (TSX VENTURE: PNR.H) announces that it has entered into a loan agreement (the "Loan Agreement") Sept 27, 2016 with the Company's director, Ho Yu Kuen Tammy, and the following companies affiliated with Mr. Ho (collectively the "Affiliates"): (i) Global Int'l Petrochemicals Ltd.; (ii) Global international Petrochemicals (HK) Limited; and (iii) Intellimax Capital Ltd. The Loan Agreement effectively consolidates all debts of the Company which are owing to Mr. Ho and the Affiliates. As at the date of the Loan Agreement, the aggregate of these debts is $2,280,533.17, which includes all amounts previously advanced by Mr. Ho pursuant to a Second Director's Bridge Loan Agreement dated May 2, 2012 (and predecessor agreements) (the "Director's Bridge Loan"), cash compensation owing to Mr. Ho in respect thereof (and in lieu of interest), and all additional amounts advanced by Mr. Ho and the Affiliates from time to time under no specific written agreement.
The Loan Agreement further provides that Mr. Ho or any of the Affiliates may provide additional advances to the Company from time to time for general business purposes upon the request of the Company, in which case any such advance would be included in the principal amount owing under the Loan Agreement. However, irrespective of any such request, there is no obligation on Mr. Ho or any Affiliate to advance any further amounts to the Company. As such, if any additional advances are made, they could be subject to conditions such as those customary of lending transactions. Further, in the event any additional advances are made, the Loan Agreement provides that they would be for general business purposes or as may be specified and agreed to by Mr. Ho and the Board of Directors of the Company prior thereto.
All amounts owing under the Loan Agreement are due on demand and, effective as at the date of the Loan Agreement, all such amounts will accrue interest at prime plus 3% per annum. The Company may repay all or any portion of amounts owing under the Loan Agreement prior to any demand being made without bonus or penalty.
The obligations of the Company in respect of the Loan Agreement are secured by way of a general security agreement over all present and after acquired property of the Company granted in favour of Mr. Ho and the Affiliates. The Loan Agreement does not provide for any ranking among Mr. Ho and the Affiliates in terms of the right to repayment, priority of security or realization in respect of security. Rather, the Loan Agreement provides that Mr. Ho., as a lender, is the representative acting for himself and on behalf of the Affiliates in respect of all matters thereunder (including under the related security agreement).
The terms and conditions of the Loan Agreement and related agreements were reviewed and unanimously approved by all of the directors of the Company, other than Mr. Ho (who abstained from voting on the matter).
The transactions contemplated by the Loan Agreement and the related security agreement constitute "related party transactions" under the Policies of the TSX Venture Exchange, by way of incorporation by reference of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions ("MI 61-101"). In entering into the transactions, the Company relies upon the exemption from the minority approval requirements under Section [5.7(1)(e) or 5.7(1)(f)] of MI 61-101.
About Prince Resource Corporation
Prince Resource Corporation currently has no active business. The directors and officers of the Company continue to work diligently to explore new business opportunities in the United States, Canada and Asia that will constitute its reactivation transaction.
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 this release.
This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements.