Crown Capital Announces Proposed Debenture Amendments and Default Waiver For 12% Secured Subordinated Debentures

CALGARY, AB, July 3, 2026 /CNW/ - Crown Capital Partners Inc. ("Crown" or the "Corporation") (TSX: CRWN) today announced that, further to its news release dated June 25, 2026 announcing the entering into of a share purchase agreement (the "Galaxy Transaction") to sell all of the issued and outstanding shares (the "Galaxy Shares") of its subsidiary, Galaxy Broadband Communications Inc. to Calian Group Ltd. (TSX: CGY) ("Calian"), it will seek approval of the holders (the "Debentureholders") of the Corporation's 12% Secured Subordinated Debentures (TSX: CRWN.NT) due December 31, 2026 (the "Debentures") for a resolution (the "Debentureholder Resolution") at a meeting of the Debentureholders to be held at the offices of the Corporation, 121 King Street West, Suite 840, Toronto, Ontario, on August 11, 2026 at 10:00 a.m. (Eastern Time) (the "Meeting").

If approved by the Debentureholders at the Meeting, the Debentureholder Resolution would:

1. authorize and approve certain amendments (the "Debenture Amendments") to the Corporation's second amended and restated trust indenture dated October 25, 2024 (the "Indenture") between the Corporation and TSX Trust Company (the "Debenture Trustee") and authorize the Debenture Trustee to enter into a third amended and restated trust indenture with the Corporation (the "Amended and Restated Indenture") to: 
   
   (i)      permit the Corporation to complete the Galaxy Transaction free of the security interest created by the Indenture notwithstanding that the sale of the Galaxy Shares to Calian would be a sale of assets of the Corporation not in the ordinary course of business of the Corporation and, accordingly, not permitted under the Indenture;
   (ii)      extend the maturity date of the Debentures from December 31, 2026 to December 31, 2027;
   (iii)     grant the Corporation the option to further extend the maturity date of the Debentures for up to one year to December 31, 2028, provided that: (A) the Corporation pays all outstanding interest on the Debentures as at December 31, 2027; (B) the Corporation pays a fee of 0.1% of the principal amount of the Debentures to the Debentureholders for each month that the maturity date of the Debentures is extended, such fee to be paid concurrently with the interest due on the Debentures as at December 31, 2027; and (C) such option is exercised at least 30 days prior to December 31, 2027 and may only be exercised once;
   (iv)     amend the interest payment dates from occurring annually on December 31 of each year to only at maturity or redemption of the Debentures;
   (v)      prohibit the Corporation from paying any dividends on the common shares of the Corporation ("Common Shares") or acquiring any Common Shares by way of an issuer bid while any Debentures remain outstanding;
   (vi)     eliminate the ability of the Corporation to incur Senior Indebtedness (as defined in the Amended and Restated Indenture) following the repayment of the senior indebtedness of the Corporation to Sandton Investments IX (Luxembourg) S.A.R.L. (the "Sandton Indebtedness") and the redemption of the $1,500,000 principal amount of unlisted debentures of the Corporation (the "2025 Debentures"), other than up to $1,000,000 of Senior Indebtedness to be used for general corporate purposes;
   (vii)    remove the requirement that the Corporation use its best efforts to maintain the listing of the Common Shares and the Debentures on the Toronto Stock Exchange ("TSX"); and
   (viii)   eliminate the ability of the Corporation to satisfy interest obligations by issuing and selling its shares through investment bankers under the Indenture; and
   
   
2. waive the default by the Corporation under the Indenture for the failure to pay the outstanding interest on the Debentures from June 30, 2024 to December 31, 2025 (the "Deferred Interest Payment") on December 31, 2025 (the "Default Waiver"), subject to the requirement that the Corporation pay: (a) the Deferred Interest Payment; and (b) interest on the Debentures from January 1, 2026 to June 30, 2026 (the "June 2026 Interest Payment"), to Debentureholders within 30 days of the completion of the Galaxy Transaction (the "Deferred Interest Payment Deadline"). The Deferred Interest Payment and the June 2026 Interest Payment will be made to Debentureholders holding Debentures as of a record date to be set by the Corporation following the effective date of the Debenture Amendments. In the event that the Deferred Interest Payment is not made by the Deferred Interest Payment Deadline, the Default Waiver will be of no further force or effect.

The board of directors of the Corporation believe that the Debenture Amendments and Default Waiver provide the following advantages:

1. Completion of Galaxy Transaction: The Debenture Amendments will allow the Corporation to complete the Galaxy Transaction. Without the Debenture Amendments, the Corporation will not be able to complete the Galaxy Transaction.
2. Payment of the Deferred Interest Payment and the June 2026 Interest Payment: If the Galaxy Transaction is completed, the Debentureholders will receive: (a) the Deferred Interest Payment, which will be approximately $161.82 per $1,000 principal amount of Debentures; and (b) the June 2026 Interest Payment, which will be approximately $60.00 per $1,000 principal amount of Debentures.
3. Payment of Sandton Indebtedness: If the Galaxy Transaction is completed, a large portion of the net proceeds from the Galaxy Transaction will be used to repay the entire amount of the Sandton Indebtedness. This will significantly reduce the amount of the Corporation's debt that ranks in priority to the Debentures.
4. Redemption of 2025 Debentures: If the Galaxy Transaction is completed, a portion of the net proceeds from the Galaxy Transaction will be used to redeem the 2025 Debentures in accordance with their terms. This will further reduce the amount of the Corporation's debt that ranks in priority to the Debentures.
5. Elimination of Senior Indebtedness: If the Galaxy Transaction is completed, following the repayment of the Sandton Indebtedness and the redemption of the 2025 Debentures, the Corporation will no longer have any Senior Indebtedness ranking in priority to the Debentures. The Debenture Amendments will prohibit the Corporation from incurring any additional Senior Indebtedness in excess of $1,000,000. This will greatly improve the relative security position of the Debentures.
6. Extension of Maturity Date: The extension of the maturity date, and the option granted to the Corporation to extend the maturity date for an additional year, will afford Debentureholders a longer period of time during which to receive interest at a favourable rate and to potentially receive a fee of 0.1% for each month that the maturity date of the Debentures is extended past December 31, 2027. The extension of the maturity date will also provide the Corporation with additional time to fund the repayment of the Debentures from the proceeds of asset sales or otherwise.
7. Prohibition of Dividends and Issuer Bids: The removal of the ability of the Corporation to pay dividends on the Common Shares or undertake any issuer bids for Common Shares while any Debentures remain outstanding provides significant incentive for the Corporation to repay the Debentures and ensures that holders of Common Shares will not receive preferential treatment over holders of Debentures.

The effective date of the Debenture Amendments will be the later of: (a) a minimum of five trading days following the approval of the Debentureholder Resolution; and (b) immediately prior to the closing of the Galaxy Transaction once all conditions precedent to the closing of the Galaxy Transaction have been satisfied or waived, other than the release of funds and those relating to the Debenture Amendments. Further particulars of the expected benefits of the Debenture Amendments and Default Waiver are described in the management information circular of the Corporation relating to the Meeting (the "Circular") and the related meeting materials, which will be made available under the Corporation's profile on SEDAR+ at www.sedarplus.ca and mailed to the Debentureholders in the coming days.

The Debentureholder Resolution will only be effective if passed by an extraordinary resolution of the holders of at least 66 ⅔% of the principal amount of the Debentures present in person or by proxy at the Meeting and entitled to vote in respect of the Debentureholder Resolution. Management recommends that Debentureholders vote in favor of the Debentureholder Resolution.

The TSX has conditionally approved the Debenture Amendments. The Debenture Amendments remain subject to the final approval of the TSX.

Debentureholders may vote on or before 10:00 a.m. (Eastern Time) on August 7, 2026 by following the voting instructions set out in the Circular. Only Debentureholders of record at the close of business on July 8, 2026 will be entitled to vote at the Meeting.

FORWARD-LOOKING STATEMENTS

This news release contains certain "forward looking statements" and certain "forward looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "continue", "plans" or similar terminology. Forward-looking statements in this news release include, but are not limited to, statements, management's beliefs, expectations or intentions regarding the Debenture Amendments, the Default Waiver, the expected timing and completion of the Galaxy Transaction, the use of proceeds of the Galaxy Transaction, the anticipated payment of the Deferred Interest Payment and the June 2026 Interest Payment, the benefits of the Debenture Amendments and the Default Waiver and the receipt of Debentureholder approval. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Crown's periodic filings with Canadian securities regulators. See Crown's most recent annual information form for a detailed discussion of the risk factors affecting Crown. Crown undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

SOURCE Crown Capital Partners Inc.

For further information, please contact: Michael Overvelde, Chief Financial Officer, [email protected], [phone]