SEB Announces the Completion of $20 Million Strategic Financing and $10 Million New Credit Facility - Seite 2

The principal amount of the Debenture is convertible into common shares of the Company (“Shares”) at a conversion price of $0.25 per Share, subject to adjustment (the “Conversion Price”). The Debenture is convertible at the option of the holder, at any time prior to the close of business on the last business day immediately preceding the Maturity Date. If the volume weighted average trading price of the Shares on the TSX Venture Exchange (the “Exchange”) is equal to at least 175% of the Conversion Price for a period of 30 trading consecutive days, then the Debenture will be convertible at the option of the Company.

The Debenture and any Shares issued upon its conversion are subject to a hold period expiring four months and one day after the Closing Date.

The Debenture is guaranteed by the material subsidiaries of the Company (the “Guarantors”) and secured by a first ranking pledge of the shares of SEB Administrative Services Inc. (“SEB Admin”), a wholly-owned subsidiary of the Company, and first ranking security over the software owned by SEB Admin, and second ranking security over all other undertaking, property and assets of the Company and of each Guarantor which such security is subject only to a first ranking security over such security in favour of SEB’s new operating credit facility lender. The Company, The Co-operators and such new operating credit facility lender entered into an intercreditor agreement governing, among other things, the priority of the first and second ranking security and the relationship of The Co-operators and the new operating credit facility lender with the Company and vis a vis each other.

The Debenture is not redeemable at the option of the Company on or before June 1, 2023 (the “Call Date”). After the Call Date and prior to June 1, 2024, the Debenture may be redeemed in whole or in part from time to time at the option of the Company, at a price equal to the then outstanding principal amount plus accrued and unpaid interest thereon up to but excluding the date of redemption, provided that the volume weighted average trading price of the Shares on the Exchange during the 30 consecutive trading days preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price. Provided, however, that if the Company delivers such written notice of redemption, The Co-operators shall have 10 days to convert the principal amount of the Debenture, or any part thereof, into that number of Shares as are equal to the principal amount of such Debenture, or any part thereof, divided by the Conversion Price. After June 1, 2024, the Debenture will be redeemable at the Company’s option at any time at an amount equal to the then outstanding principal amount of the Debenture plus accrued and unpaid interest (provided, however, that the same 10-day notice shall apply to allow for the conversion at the option of The Co-operators).