Notes: The Notes have a term maturing on May 13, 2016 (the “Maturity Date”). The Notes bear interest at an annual rate of 9.75%, with interest calculated and paid monthly in arrears. The principal amount of the Notes, to the extent not previously converted or repaid, will, on the Maturity Date, be repayable in its entirety. The Notes are convertible into the common shares of SEB at any time at $0.50 per share until May 13, 2014, thereafter at $0.60 per share until May 13, 2015 and thereafter at $0.75 per share until May 13, 2016. The Notes are pre-payable by SEB without penalty or bonus on provision of 30 days written notice; provided that during such 30 day period, note-holders shall be entitled to exercise their conversion rights prior to any repayment. The Notes will be secured by registration of a general security agreement against SEB’s assets, but subordinated to a revolving credit facility of up to $3.5 million.
Warrants: Each Warrant shall be exercisable at any time prior to May 13, 2014 at an exercise price of $0.50 for 1 common share of SEB.
Finder: SEB has engaged BBS Securities Inc. as a finder. The finder will be entitled to a fee consisting of 100,000 common share purchase warrants exercisable at any time prior to two years from the closing of this private placement at an exercise price of $0.35 for 1 common share of SEB.
Subscribers: SEB expects a significant portion of the subscriptions on the private placement, being approximately $850,000 in the aggregate, will be received from pro group subscribers or insiders of SEB, being approximately $200,000 from Latiq Qureshi (a director of SEB), approximately $150,000 from Adam Jasek (a director of an SEB subsidiary) and approximately $500,000 from Ziaian Holdings Inc. (a pro group subscriber). In addition, an aggregate of approximately $125,000 of the subscriptions is expected from employees and consultants of the Company.
All securities issued in connection with the private placement are subject to a four month hold period from the date of closing as well as additional hold or escrow periods as may be applicable to insiders of SEB.
Proceeds from the private placement will be used for acquisitions and working capital requirements. The private placement is subject to regulatory approval.