Mr. John McKimm reports

CORPORATE UPDATE: SMART EMPLOYEE BENEFITS INC. ANNOUNCES AMENDMENT TO CREDIT FACILITY

Smart Employee Benefits Inc. has entered into a third amending agreement to its secured revolving credit facility agreement with its international asset-focused lender to, among other things, extend availability to $15-million under the existing credit agreement.

Co-operators Financial Services Ltd., a strategic investor in Smart Employee, previously provided a limited guarantee of $5-million in favour of the lender, which initial guarantee permitted Smart Employee to have access to $5-million of unutilized commitment under the credit agreement. Subsequently, Co-operators provided an amended and restated limited guarantee dated March 8, 2022, pursuant to which the initial guarantee was amended and restated, and Smart Employee issued a promissory note dated March 8, 2022, in favour of Co-operators, 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 Smart Employee 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, in favour of the lender in the amount of $10-million, and, accordingly, Smart Employee has issued a corresponding amended and restated promissory note in favour of Co-operators dated June 24, 2022. 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 Smart Employee to Co-operators under the amended and restated promissory note. Smart Employee 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-million convertible debenture issued by Smart Employee dated Nov. 30, 2020, as well as a $5-million convertible debenture dated March 8, 2022. 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 Smart Employee, and second-ranking security over the other assets of Smart Employee and SEB Administrative Services. 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.

The issuance of the amended and restated promissory note accompanying the amended and restated limited guarantee may be considered a related-party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101. The company relied on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) (company is listed on the TSX-V) and 5.7(1)(a) (fair market value of the additional $5-million contingent promissory note liability did not exceed 25 per cent of the company's market capitalization) in respect of such transaction. A resolution of the board of directors of the company was passed to approve the issuance of the amended and restated promissory note, with the two director appointees of Co-operators abstaining from voting. No materially contrary view or abstention was exercised or made by any other director.

The company did not file a material change report more than 21 days before the closing, which it considers reasonable in the circumstances, as the participation in the transaction by a related party of the company was not definitive until shortly prior to closing.

About Smart Employee Benefits Inc.

Smart Employee is an insurtech company focused on benefit administration technology driving two interrelated revenue streams -- software/solutions and services. The company is a proven provider of leading-edge information technology and benefit processing software, solutions and services for the life and group benefit marketplace and government. It designs, customizes, builds and manages mission-critical, end-to-end technology, people and infrastructure solutions using Smart Employee's proprietary technologies and expertise and partner technologies. It manages mission-critical business processes for over 150 blue-chip and government accounts, nationally and globally. Over 90 per cent of its revenue and contracts are multiyear recurring revenue stream contracts related to government, insurance, health care, benefits and e-commerce. Its solutions are supported nationally and globally by over 600 multicertified technical professionals in a multilingual infrastructure from multiple offices across Canada and globally.

Its solutions include both software- and service-driven ecosystems, including multiple software-as-a-service solutions, cloud solutions and services, managed service offering smart sourcing (nearshore/offshore), managed security services, custom software development and support, professional services, deep system integration expertise, and multiple specialty practice areas including artificial intelligence, CRM, BI, portals, EDI, e-commerce, digital transformation, analytics and project management to mention a few. The company has more than 20 strategic partnerships/relationships with leading global and regional technology and consulting organizations.

We seek Safe Harbor.