Smart Employee Benefits Inc. announced that it has entered into a third amending agreement to its secured revolving credit facility agreement (the “Credit Agreement”) with its international asset-focused lender (the “Lender”) to, among other things, extend availability to $15,000,000 under the existing Credit Agreement. Co-operators Financial Services Limited (“Co-operators”), a strategic investor in SEB, previously provided a limited guarantee (the “Initial Guarantee”) of $5,000,000 in favour of the Lender, which Initial Guarantee permitted SEB to access $5,000,000 of unutilized commitment under the Credit Agreement. Subsequently, Co-operators provided an amended and restated limited guarantee dated March 8, 2022 (the “Existing Guarantee”) pursuant to which the Initial Guarantee was amended and restated and SEB issued a promissory note dated March 8, 2022 in favour of Co-operators (the “Promissory Note”), to evidence that amounts paid, if any, by Co-operators to the Lender under the Existing Guarantee would be deemed to be a loan outstanding in the same amount, owing by SEB to Co-operators under the Promissory Note.

In conjunction with the third amending agreement to the Credit Agreement, Co-operators has provided an amended and restated limited guarantee dated June 24, 2022 (the “Amended and Restated Limited Guarantee”) in favour of the Lender in the amount of $10,000,000, and, accordingly, SEB has issued a corresponding amended and restated promissory note in favour of Co-operators dated June 24, 2022 (the “Amended and Restated Promissory Note”). In the future, should the Lender call on the Amended and Restated Limited Guarantee, any amount paid by Co-operators to the Lender would be deemed to be a repayment under the Credit Agreement and as a result such amount would also be deemed to be owing by SEB to Co-operators under the Amended and Restated Promissory Note. SEB shall be entitled to repay interest under the Amended and Restated Promissory Note in shares, and any such share issuance shall be subject to applicable regulatory and TSX Venture Exchange approval at the time of such share issuance.

Co-operators currently holds a $20,000,000 convertible debenture issued by SEB dated November 30, 2020, as well as a $5,000,000 convertible debenture dated March 8, 2022 (collectively the “Debentures”). The Debentures and the Amended and Restated Promissory Note are secured by first ranking security over the software owned by SEB Administrative Services Inc., a wholly owned subsidiary of SEB, and second ranking security over the other assets of SEB and SEB Administrative Services Inc. An intercreditor agreement, as amended, between the Lender and Co-operators governs the security granted to the Lender pursuant to the Credit Agreement and to Co-operators pursuant to the Debentures and the Amended and Restated Promissory Note, as well as the relationship between the Lender and Co-operators as it relates to such security.