The Notes have a term of four years and bear interest at a rate of 8% per annum. The Company may redeem the Notes, in whole or in part, at any time on or after four months from the issue date of the Notes upon 15 days' notice and payment of interest accrued on the amount redeemed to the date of redemption, but otherwise at par.
As additional consideration for the Financing, the Company will issue to Vertex at the time of funding common share purchase warrants (the "Warrants") to purchase up to an aggregate of 1,060,000 common shares of the unissued capital stock of the Company at a price of $8.25 per share for a period of four years following issuance. Any common shares issuable upon exercise of the Warrants will be subject to a hold period expiring four months and one day following the closing.
The Company intends to use the net proceeds from the Notes for general corporate purposes, including primarily for strategic capital projects to enhance and improve the efficiencies and production of the Company's two sawmills.
Ken Shields, CEO of Conifex, commented: "This financing, combined with the ABL financing secured earlier this year, provides our lumber segment with appropriate credit facilities. We now have the balance sheet and liquidity to pursue the modernization and upgrading of our mills at Fort St. James and Mackenzie."
Conifex Timber and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, and the manufacture, sale and distribution of dimension lumber.
