Global Energy amends agreement relating to convertible debentures sold to YA Global

By Devika Patel

Knoxville, Tenn., Sept. 25 - Global Energy Inc. amended multiple clauses of its agreement with YA Global Investments, LP, the holder of $4 million of the company's secured convertible debentures and warrants, according to an 8-K filed Thursday with the Securities and Exchange Commission.

According to the filing, the two companies agreed to defer certain principal and interest payments immediately.

Specifically, about $300,000 in interest payments accrued and due during the first three quarters of this calendar year have been deferred until Oct. 31.

In addition, principal installments that will be due July 31, Aug. 31 and Sept. 30 have been deferred until Oct. 31. The installments may be deferred even further if certain conditions are met.

Additionally, the debentures' interest rate will be increased immediately to 12% from 10%.

In consideration for these concessions, YA Global will receive 1 million restricted common shares.

If Global Energy completes a private offering for an agreed-upon amount by Oct. 31, YA Global will be entitled to certain concessions. YA Global will be paid $180,000 in interest directly from the offering's proceeds and 10% of the gross proceeds from all offerings which settle for an amount between $2.2 million and $3.9 million.

On each installment payment date, YA Global will be paid 50% of all cash flows in excess of the first $700,000 in case flow that are generated by Global Energy's Ethiopian subsidiary Global Energy Pacific Ltd.

If the private offering settles by Oct. 31, the debentures' conversion price will be reset to $0.10 and the notes' repayment schedule from November through September 2009 will be revised in order to provide for a minimum cash payment of $10,000 plus an additional amount, depending on the amount raised in the offering.

The new repayment schedule also will be revised to include payments ranging from $25,000 to $75,000, which are payable in common shares.

Beginning in October 2009, the monthly payment will be $225,000, which is payable at Global Energy's discretion in cash and/or common shares.

The warrant strike price will be reset to $0.10 per share from $1.25 per share and the total number of shares underlying the warrants will be increased to 7.5 million shares from 600,000 shares.

New York-based Global Energy develops alternative energy technologies. The debentures and warrants were issued in a private placement that settled in multiple tranches beginning on July10, 2007.

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