Rockwater Capital Corp. has completed its previously announced private placement of $35 million principal amount of senior unsecured convertible debentures in the capital of Rockwater due December 31, 2010.

Rockwater issued and sold $30 million of the debentures to Caisse de depot et placement du Quebec and $5 million of the debentures to members of senior management of Rockwater.

The debentures will be convertible, at the option of the holder, into Rockwater common shares at a conversion price of $1 per share, subject to reset based on a premium to the offering price of the Rockwater common shares in a public offering by Rockwater that may occur before June 30, 2005.

The net proceeds of the private placement will be used to repay the bridge loan provided to Rockwater by a Canadian chartered bank in connection with the acquisition of KBSH and for general working capital purposes.