July 6, 2011
Warnex Reaches Agreement to Extend Maturity Date for All Outstanding Debentures
Laval, Quebec, July 6, 2011 - Warnex Inc. (TSX: WNX) ("Warnex") announced today that it has reached an agreement in principle with the holders of all of its outstanding debentures to extend the maturity date and modify various other terms of their debentures.
The outstanding debentures, which are held by four different lenders, are as follows:
- US$3,000,000 non-secured convertible debenture maturing on July 5, 2011.
- US$1,000,000 non-secured convertible debenture maturing on July 5, 2011.
- US$333,333 non-secured non-convertible debenture maturing on July 5, 2011.
- CDN$500,000 non-secured non-convertible debenture maturing on July 5, 2011.
- CDN$1,500,000 non-secured convertible debenture maturing on July 9, 2011.
Pursuant to the agreement in principle which has been reached with each of the debenture holders, the principal amendments to be made to the debentures are as follows:
- The maturity date for all debentures will be extended to November 8, 2011, with an option for a further extension to no later than December 13, 2011, upon the occurrence of certain events and the agreement of the parties;
- Any interest owing pursuant to the debentures as of June 30, 2011, will be deferred and paid in cash on August 1, 2011;
- Any interest owing pursuant to the debentures following June 30, 2011, will be accrued and added to the principal amount thereof;
- At the option of the holder, (i) the principal amount of the debentures will be convertible into common shares of Warnex ("Common Shares") at the lower of $0.06 or the market price of the Common Shares at the time of conversion and (ii) the accrued interest owing pursuant to the debentures will be convertible into Common Shares at the market price of the Common Shares at the time of conversion;
- The debentures will be secured by a charge on all of the property and assets of Warnex and its subsidiaries.
Closing of the transaction is subject to regulatory approval and the execution of definitive agreements by all parties and is expected to occur in July 2011. Warnex intends to issue a further press release setting out additional details concerning this transaction once such details have been determined.
Warnex (www.warnex.ca) is a life sciences company devoted to protecting public health by providing laboratory services to the pharmaceutical and healthcare sectors. Warnex Analytical Services provides pharmaceutical and biotechnology companies with a variety of quality control services, including chemistry, chromatography, microbiology, method development and validation, and stability studies. Warnex Bioanalytical Services specializes in bioequivalence and bioavailability studies for clinical trials. Warnex Medical Laboratories provides specialized testing for the healthcare industry as well as pharmaceutical and central laboratory services. Warnex PRO-DNA Services offers DNA identification tests for paternity, maternity and other family relationships, as well as for immigration and forensic testing purposes. Warnex has three facilities located in Laval and Blainville, Quebec, and Thunder Bay, Ontario.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties, relating to financial resources, liquidity risk, key customers and business partners, credit risk, foreign currency risk, government regulations, laboratory facilities, volatility of share price, employees, suppliers, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in Warnex's most recent Management's Discussion and Analysis, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.