WellPoint Systems Enters Financing with Quorum Funding Corp.
Summary
WellPoint Systems Inc. has signed two non-binding letters of intent with Quorum Funding Corporation in respect of two private placement offerings of convertible secured debentures to investment funds managed by associates of the Quorum Funding Corporation (the "Quorum Offerings").One offering will consist of a convertible secured debenture in the principal amount of US$15,200,000 (the "QOGT Debenture"). The QOGT Debenture will mature five years from the date of issue, bear interest at an annual rate of 7.75% and be convertible into common shares of WellPoint at the option of the holder at any time prior to the maturity date at a conversion price of $0.90 per share. The QIP Debenture will mature 18 months from the date of issue (unless otherwise agreed), bear interest at an annual rate of 7.75% and be convertible into common shares of WellPoint at the option of the holder at any time prior to the maturity date at a conversion price of $0.60 per common share. The proceeds of the QIP Debenture will be used to develop the WPS Enterprise Asset Management, WPS Energy Broker Solutions, for ongoing product R&D and for general working capital purposes.The conversion price of the QOGT Debenture and the QIP Debenture is subject to customary adjustments, including an adjustment downwards if WellPoint completes an equity financing at a price less than the then current conversion price. WellPoints obligations under the QOGT Debenture and QIP Debenture will be secured by a pledge of all the assets of WellPoint and its material subsidiaries.Transaction fees are payable upon completion of the Quorum Offerings.The Quorum Offerings, each of which is expected to close in February 2008 are subject to the receipt of all necessary approvals, including the approval of WellPoints board of directors and the TSX Venture Exchange.
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