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XL TechGroup, Inc. (XLT)


Thursday 04 October, 2007

XL TechGroup, Inc.

new borrowing facility

XL TechGroup, Inc.
04 October 2007

Press Release                                                    4 October 2007

                               XL TechGroup, Inc.

                       ('XL TechGroup' or 'the Company')

           XL TechGroup arranges new US$25 million borrowing facility

XL TechGroup (AIM: XLT), the systematic architect and builder of an ongoing
stream of high value new companies, announces that it has arranged a new
borrowing facility totalling US$25 million with Laurus Master Fund Ltd ('Laurus
'), and affiliates of Laurus, a New York based institutional equity fund that
specialises in making direct investments in growing public companies.

This new facility is divided into two tranches.  The first is a US$12 million
three year loan at the US Prime Rate (currently 7.75%) plus 2% per annum, that
will be used to fund the development of XL TechGroup portfolio companies,
including PetroAlgae LLC ('PetroAlgae') which is commercialising
environmentally-friendly algae to produce biodiesel.  Laurus will receive an
option for up to 9% of PetroAlgae's issued shares, and XL TechGroup's equity
stake in PetroAlgae would reduce to 85.4% after the fully dilutive effect of
this transaction.  However, if XL TechGroup repays this tranche within 14
months, Laurus' equity stake in PetroAlgae will reduce to 7%.  In addition, XL
TechGroup has call options that enable it to buy back 66.7% of Laurus' options
in PetroAlgae at varying prices, being US$3 million for the first 22.3%, US$6
million for the next 22.2% and US$12 million for the last 22.2%.  All of these
options must be exercised no later than six months after any PetroAlgae IPO and
prior to the three year maturity of this tranche.

The second tranche is a US$13 million three year loan that will be used to
provide XL TechGroup with US$3 million of additional working capital and to
refinance, without penalty, US$10 million of the US$35 million Laurus facility
that was announced on 3 January 2006.  The interest rate on this second tranche
is the US Prime Rate, which is currently 7.75% per annum, and compares
favourably with the US Prime Rate plus 2% applicable to the original US$35
million facility.  At XL TechGroup's election, Laurus is also entitled, on an
annual basis, to receive either cash or shares in XL TechGroup's portfolio
companies or in XL TechGroup itself, with a value equivalent to 12% of the
outstanding principal under this facility at the time.

In line with previous Laurus facilities, collateral for this new facility
consists of a charge against XL TechGroup's assets, including shares in
portfolio companies.  With regard to its holding in TyraTech, XL TechGroup will
retain at all times beneficial interest in its TyraTech stock until 1 June 2008.
 After this date, should Laurus receive TyraTech stock under the terms of this
loan, it is bound to adhere to any lock-in restrictions currently in place after
that date.  The only circumstances under which Laurus could realise on its
collateral are in the event of a default by XL TechGroup, and Laurus would in
any event be bound by the current terms of the XL TechGroup lock-in

This new facility is in line with XL TechGroup's stated business strategy, which
has been successfully developed over fourteen years.  The Company's aim is to
achieve periodic large-scale liquidity events from the managed sale of its
interests in XL TechGroup portfolio companies and, as recently advised, it is
currently anticipated that the first of a number of significant cash
distributions to shareholders would occur during 2008.  In the meantime, XL
TechGroup raises working capital funds by leveraging its company assets to
secure reliable, cost-effective financing for the development and scaling needs
of both existing XL TechGroup portfolio companies and future prospects in the

John Scott, Chief Executive Officer of XL TechGroup, said: 'This is the third
facility that we have arranged with Laurus, and we are pleased with their
ongoing support for our overall business model and the underlying potential
value of our portfolio companies.  We are also pleased with the terms of this
latest facility which provides both additional working capital for XL TechGroup,
as well as specific funding for PetroAlgae, while enabling us to refinance part
of our previous Laurus debt on improved terms.'

                                    - Ends -

For further information:
XL TechGroup Inc.                                       
Jonn Scott / Harold Gubnitsky                               Tel: +1 321 409 7403
[email protected]
Chris Munden, Director of Investor Relations           Tel: +44 (0) 20 7398 7720
[email protected]                                  

Nomura Code Securities
Richard Potts, Corporate Finance                       Tel: +44 (0) 20 7776 1200

XL TechGroup media enquiries:
Abchurch Communications
Heather Salmond / Gareth Mead                          Tel: +44 (0) 20 7398 7700
[email protected]              


About XL TechGroup

XL TechGroup is in the business of significant value creation.  Working with
major international corporate and technology partners such as AES, Procter &
Gamble and leading universities, XL TechGroup first identifies global unmet
market needs and then targets and exploits these by the systematic creation of
successful, disruptive technology businesses.  These new companies are built
from scratch, and are then managed, developed and funded by XL TechGroup through
to the point of a trade sale or a stock market listing.

XL TechGroup's unique and proven methodology selects the best opportunities in
order to create one-to-two new companies annually, where each company is
expected to achieve a realisable valuation of at least US$400 million within
four years from its creation.  While an XL TechGroup company might perform a
stock market listing at an earlier point in this four year timeframe, XL
TechGroup would retain a controlling interest and would continue to assist with
the company's development.  It is XL TechGroup's aim to deliver significant
shareholder distributions at the final exit from each company.

XL TechGroup's companies to date are:

•  AgCert International plc (LSE: AGC,
•  TyraTech Inc. (AIM: TYR,
•  DxTech LLC (
•  PetroAlgae LLC (
•  QuoNova LLC (

XL TechGroup has also established GenXL LLC as a joint venture to capture the
value of those prospects that do not fully meet XL TechGroup's US$400 million,
four year criteria but still demonstrate considerable potential worth.  Over and
above XL TechGroup's core business model, GenXL is reviewing a significant flow
of opportunities from both XL TechGroup and GEN3 in order to generate new
companies, standalone product lines and technology licensing opportunities or an
appropriate mix of these.

For further information, see

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                          

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