EX-10.43 11 ex1043.htm EX-10.43
1
EXECUTION VERSION
IFC INVESTMENT NUMBER 37402
Amended & Restated
Policy Agreement
By and Among
LESAKA TECHNOLOGIES, INC.
and
EACH OF THE INVESTORS SIGNATORY
HERETO
Dated October 28, 2024
Exhibit 10.43
i
TABLE OF CONTENTS
Article/
Section
Item
Page No.
ARTICLE I
................................................................
................................................................
............................ 1
Definitions and Interpretation
................................................................
..............................................................
1
Section 1.01
.
Definitions
................................................................
................................................................
... 1
Section 1.02.
Interpretation
.
................................................................
..............................................................
9
Section 1.03.
No Third Party Rights
................................................................
................................................... 9
Section 1.04.
Exceptions to
No Third Party Rights
................................................................
............................. 9
ARTICLE II
................................................................
................................................................
......................... 10
Corporate Governance
................................................................
................................................................
........ 10
Section 2.01.
Investors’ Board Rights
................................................................
............................................. 10
Section 2.02.
Removal/Resignation of Investors’ Nominee Director
..............................................................
10
Section 2.03.
Procedures of the Board
................................................................
............................................ 11
Section 2.04.
Advisory Committee
................................................................
................................................... 11
ARTICLE III
................................................................
................................................................
....................... 12
Covenants
................................................................
................................................................
............................. 12
Section 3.01.
General Reporting Covenants
................................................................
.................................... 12
Section 3.02.
Policy Reporting Covenants
................................................................
...................................... 13
Section 3.03.
Policy Covenants
................................................................
.......................................................
15
Section 3.04.
Other Affirmative Covenants
................................................................
..................................... 17
Section 3.05.
Use of Proceeds
................................................................
.........................................................
17
Section 3.06.
Preemptive Rights
................................................................
......................................................
17
Section 3.07.
Registration Rights
................................................................
.................................................... 19
Section 3.08.
Further Assurances
................................................................
.................................................... 27
ARTICLE IV
................................................................
................................................................
....................... 28
The Put Option
................................................................
................................................................
.................... 28
Section 4.01.
The Put Option
................................................................
...........................................................
28
Section 4.02.
Failure to Perform by the Company
................................................................
.......................... 29
Section 4.03.
Obligations Irrevocable
................................................................
............................................. 29
ARTICLE V
................................................................
................................................................
......................... 30
Term
of Agreement
................................................................
................................................................
............. 30
Section 5.01.
Term of Agreement
................................................................
.................................................... 30
ARTICLE VI
................................................................
................................................................
....................... 30
Representations and Warranties
................................................................
........................................................
30
Section 6.01.
Representations and Warranties
.
................................................................
............................... 30
Section 6.02.
Investors Reliance
.
................................................................
.....................................................
30
2
ARTICLE VII
................................................................
................................................................
...................... 31
Miscellaneous
................................................................
................................................................
....................... 31
Section 7.01.
Notices
................................................................
................................................................
....... 31
Section 7.02.
Saving of Rights
.
................................................................
........................................................
32
Section 7.03.
English Language
................................................................
......................................................
32
Section 7.04.
Applicable Law and Jurisdiction
................................................................
............................... 32
Section 7.05.
Immunity
................................................................
................................................................
.... 34
Section 7.06.
A
nnouncements / Confidentiality
................................................................
............................... 34
Section 7.07.
Successors and Assigns
................................................................
.............................................. 35
Section 7.08.
Amendments, Waivers
and Consents
................................................................
......................... 35
Section 7.09.
Counterparts
................................................................
..............................................................
35
Section 7.10.
Costs, Expenses and Third Party Claims
................................................................
................... 35
Section 7.11.
Entire Agreement
................................................................
.......................................................
35
Section 7.12.
Invalid Provisions
................................................................
......................................................
35
ANNEX A
................................................................
................................................................
............................. 38
ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS
................................................................
... 38
ANNEX B ................................................................................................
.............................................................
41
ANNUAL MONITORING REPORT ................................................................
................................................ 41
ANNEX C
................................................................
................................................................
............................. 50
MINIMUM INSURANCE REQUIREMENTS................................
................................................................
.
50
ANNEX D
................................................................
................................................................
............................. 51
LIST
OF
DEVELOPING
OR
EMERGING
MARKET
COUNTRIES
IN WHICH THE PROCEEDS MUST BE USED
................................................................
............................. 51
SCHEDULE 1
................................................................
................................................................
...................... 53
FORM OF LETTER TO COMPANY’S
AUDITORS ................................................................
..................... 53
SCHEDULE 2
................................................................
................................................................
...................... 55
ACTION PLAN ................................................................
................................................................
................... 55
SCHEDULE 3
................................................................
................................................................
...................... 56
FORM OF PUT NOTICE
................................................................
................................................................
... 56
1
POLICY AGREEMENT
AMENDED & RESTATED
POLICY AGREEMENT (this “
Agreement
”), dated October 28, 2024, between:
(1)
LESAKA TECHNOLOGIES, INC., a corporation organized and existing under the laws of the State of Florida (the
“
Company
”);
(2)
INTERNATIONAL
FINANCE
CORPORATION,
an
international
organization
established
by
Articles
of
Agreement among its member countries including the United States of America
and South Africa (“
IFC
”); and
(3)
IFC African,
Latin American
and Caribbean
Fund, LP,
a limited
partnership formed
under the
laws of
the United
Kingdom (“
ALAC
”); and
(4)
IFC Financial
Institutions Growth
Fund, LP,
a limited partnership
formed under
the laws of
the United
Kingdom
(“
FIG
” and together with IFC and ALAC, the “
Investors
”).
.
RECITALS
(A)
Pursuant to
a Subscription
Agreement, dated
April 11,
2016 (the
“
Subscription Agreement
”) by
and among
the
Investors
and
the
Company,
each
Investor
purchased
from
the
Company
the
number
of
fully
paid
and
non-assessable
shares
of
Common
Stock
in
the
Company
set
forth
opposite
its
name
in
the
Subscription
Agreement
on
the
terms
and
conditions
of
the
Subscription Agreement;
(B)
The
Investors
and
the Company
entered into
that certain
Policy
Agreement
dated
April 11,
2016
(the “
Original
Policy Agreement
”) as a condition of the Investors’
subscription pursuant to the Subscription Agreement;
and
(C)
On May 7,
2024, the Company
entered into a
Sale and Purchase
Agreement (the
“
Sale Agreement
”) with Lesaka
Technologies Proprietary Limited, and the Sellers party thereto. Pursuant to
the Sale Agreement,
the Company agreed to sign
a written
addendum to the Original Policy Agreement with the Investors that provides for the inclusion of the shares to be issued in connection
with
the
Sale
Agreement
attributable to the
Investors in
the
definition of “Put
Shares”
under the
Original
Policy
Agreement, and related changes.
(D)
Accordingly,
the Company and the
Investors desire and
agree to amend and
restate the Original Policy
Agreement
in its entirety to incorporate the changes contemplated by the Sale Agreement.
ARTICLE I
Definitions and Interpretation
Section 1.01.
Definitions
.
Wherever used in this Agreement, the following terms have the following meanings:
“
Accounting Standards
” means accounting principles generally accepted in the
United States, applied on a consistent basis;
“
Action Plan
” means the plan
attached as Schedule 2
(
Action Plan
) setting out the
specific social and environmental
measures to be
undertaken by the Company;
“
Advisory Committee
” has the meaning set forth in Section 2.04 (
Advisory Committee
);
“
Affiliate
” means, with respect to any Person, any Person directly
or indirectly Controlling, Controlled by or under
common Control
with, that Person;
“
ALAC
” has the meaning set forth in the preamble;
“
AML/CFT
” means anti-money laundering and combating the financing
of terrorism;
“
AML/CFT Officer
” means
a senior
officer of
the Company
whose duties
include oversight
or supervision
of the
implementation
and operation of, and compliance with, the Company’s
AML/CFT policies, procedures and controls;
2
“
Annual Monitoring
Report
” means
the annual
monitoring report,
in form
and substance
satisfactory to
each Investor,
setting out
the specific social, environmental and developmental impact information to be provided by the Company,
substantially in the form of
Annex B hereto, as the same may be amended or supplemented from time to time
with the Investor’s consent;
“
Applicable Law
” means
all applicable
statutes, laws,
ordinances, rules
and regulations,
including but
not limited
to, any
license,
permit or other governmental Authorization, in each case as in effect
from time to time;
“
Applicable S&E Law
” means all applicable statutes, laws, ordinances, rules and regulations of each country in which the Company
or any Subsidiary does business, including,
without limitation, all Authorizations setting
standards concerning environmental, social,
labor, health
and safety or
security risks of
the type contemplated
by the Performance
Standards or imposing
liability for the
breach
thereof;
“
Auditors
” means the independent registered public accounting firm of
the Company;
“
Authority
” means any
national, supranational, regional
or local government
or governmental, statutory,
regulatory,
administrative,
fiscal, judicial,
or government
-owned
body,
department,
commission, authority,
tribunal, agency
or entity,
or central
bank (or
any
Person whether or not government owned and howsoever constituted
or called, that exercises the functions of a central bank);
“
Authorization
” means
any consent,
registration, filing,
agreement, notarization,
certificate, license,
approval, permit,
authority or
exemption from,
by or
with any
Authority,
whether given
by express
action or
deemed given
by failure
to act
within any
specified
time period and all corporate, creditors’ and stockholders’ approvals or consents;
“
Authorized Representative
” means any individual who is duly authorized by the Company to
act on its behalf and whose name and
a specimen
of whose
signature appear
on the
Certificate of
Incumbency and
Authority most
recently delivered
by the
Company to
each Investor;
“
Board of Directors
” or “
Board
” means the
board of directors
of the Company
nominated and elected
from time to
time in accordance
with Section 2.01 (
Investors’ Board Rights
);
“
Bona Fide Offer
” means a bona fide offer to acquire all the outstanding Common
Stock of the Company;
“
Business Day
” means a day when banks are open for business in New York,
New York
and Johannesburg, South Africa;
“
CAO
” means
the Compliance
Advisor
Ombudsman,
the independent
accountability
mechanism for
the Investors
that impartially
responds to environmental and social concerns of affected
communities and aims to enhance outcomes;
“
CAO’s
Role
” means the role of the CAO which is:
(a)
to respond
to complaints
by Persons
who have
been or
are likely
to be
directly affected
by the
social or
environmental impacts of IFC projects; and
(b)
to
oversee
audits
of
IFC’s
social
and
environmental
performance,
particularly
in
relation
to
sensitive
projects, and to ensure compliance with IFC’s
social and environmental policies, guidelines, procedures and
systems;
“
Certificate of Incumbency and Authority
” means a certificate provided to each Investor by the Company substantially in the form
set forth in Schedule 5 (
Form of Certificate of Incumbency and Authority
) to the Subscription Agreement;
“
Chairman
” means the chairman of the Board of Directors elected or appointed from time to time, or such individual in substantially
the same role;
“
Charter
” means the
Amended and
Restated Articles of
Incorporation and
Amended and Restated
By-Laws of
the Company
or, as
applicable, the organizational documents of any Subsidiary;
“
Coercive Practice
” has the meaning set forth in Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“
Collusive Practice
” has the meaning set forth in Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“
Common Stock
” means the common stock, par value $0.001 per share, of the Company;
“
Company
” has the meaning set forth in the preamble;
“
Company Operations
” means all of the existing and future financing operations of the Company and its Subsidiaries;
3
“
Company’s
Knowledge
” means
the knowledge
of the
Company’s
executive officers
after making
due
inquiry of
the individuals
within the Company’s and
its Subsidiaries’ having responsibility for the matter in question;
“
Confidential Information
” means any
written information, which
is clearly marked
“confidential”, concerning
the businesses and
affairs of
the Company
or any
of its
Subsidiaries that
the Company
has provided
or shall
in the
future provide
to the
Investors, but
excluding information
that: (i)
is or
becomes available
to the
public from
a source
other than
any Investor;
(ii) was
available to
an
Investor prior to its disclosure to the Investors by the Company; (iii) was
or is developed by an Investor independently of, and without
reference to any
other information within
the scope of this
definition; (iv) is
required to be disclosed
by action of
any court, tribunal
or regulatory authority or
by any requirement of law,
legal process, regulation, or
governmental order,
decree or rule, or is necessary
or desirable for the Investors to disclose in connection with any proceeding in any court or tribunal or before any regulatory
authority
in order
to preserve
its rights;
(v) the
Company agrees
may be
disclosed; (vi)
is or
becomes available
to any
Investor from
sources
which to such
Investor’s knowledge
are under no
obligation of confidentiality
to the Company;
or (vii) is
or becomes stale
and out-
of-date or no longer material
to the Company and its Subsidiaries,
provided that in the
case of Intellectual Property,
such Intellectual
Property shall not cease to be Confidential Information pursuant to
this sub-clause (vii) without the prior consent of the
Company (not
to be unreasonably withheld);
“
Control
” means the power to direct the management or policies of a Person, directly or indirectly, whether through the ownership of
shares or
other securities,
by contract
or otherwise;
provided that,
in any
event, the
direct or
indirect ownership
of twenty
percent
(20%)
or
more
of
the
voting
share
capital
of
a
Person
is
deemed
to
constitute
Control
of
that
Person,
and
“
Controlling
”
and
“
Controlled
” have corresponding meanings;
“
Controlling Person
” has the meaning set forth in Section 3.07(b)(xvii) (
Registration Rights
);
“
Corrupt Practice
” has the meaning set forth in Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“
Director
” means an individual who is a member of the Board of the Company;
“
Dollars
” or “
$
” means the lawful currency of the United States of America;
“
Equity Securities
” means
the Company’s
Common Stock,
preferred stock,
bonds, loans,
warrants, rights,
options or
other similar
instruments
or
securities
which
are
convertible
into or
exercisable
or
exchangeable
for,
or
which
carry
a
right
to
subscribe
for
or
purchase shares of Common Stock or any instrument or certificate representing a beneficial ownership interest in the Common Stock,
including
global
depositary
receipts and
American
depository
receipts
and
any
other
security
issued
by
the
Company,
even
if
not
convertible into Common Stock,
that derives its
value and/or return based
on the financial
performance of the
Company or its
Common
Stock;
“
Exchange Act
” means the U.S. Securities Exchange Act of 1934, as amended;
“
Financial Year
” means the accounting year of the Company commencing each year on July 1 and ending on the
following June 30,
or such other period
as the Company,
upon thirty (30) days’
prior written notice
to each Investor,
from time to time
designates as its
accounting year;
“
Fraudulent Practice
” has the meaning set forth in Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“
General
Meeting
”
means
either
a
special
meeting
of
the
Company’s
shareholders
or
the
annual
meeting
of
the
Company’s
shareholders;
“
IFC
” has the meaning set forth in the preamble;
“
Indemnitee
” shall mean each Investor and its officers, directors, employees,
agents, representatives and Affiliates;
“
Intellectual Property
” means any
or all of
the following and
all rights in,
arising out of,
or associated with
any or all
of the following:
(a)
all U.S.,
foreign and
international patents
and patent
rights (including
all patents,
patent applications,
provisional
patent applications, and any
and all divisions, continuations,
continuations-in-part, reissues, re-examinations
and extensions
thereof, and all invention registrations and invention disclosures);
(b)
all
trademarks
and
trademark
rights,
service
marks
and
service
mark
rights,
trade
names
and
trade
name
rights,
service names
and service name
rights (including
all goodwill,
common law
rights and governmental
or other
registrations
or applications
for registration
pertaining thereto),
designs, trade
dress, brand
names, business
and product
names, internet
domain names, logos and slogans;
(c)
all copyrights
and
copyright
rights (including
all common
law rights,
and governmental
or
other registrations
or
applications for registration pertaining thereto, and renewal rights therefor);
4
(d)
all sui generis
database rights,
ideas, inventions
(whether patentable
or not),
invention disclosures,
improvements,
technology
know-how,
show-how,
trade
secrets, formulas,
systems, processes,
designs,
methodologies,
industrial
models,
works
of
authorship,
databases,
content,
graphics,
technical
drawings,
statistical
models,
algorithms,
modules,
computer
programs, technical documentation, business methods, work
product, intellectual and industrial property licenses,
proprietary
information and documentation relating to any of the foregoing;
(e)
all mask works, mask work registrations and applications therefor;
(f)
all industrial designs and any registrations and applications therefor throughout
the world;
(g)
all computer software
including all source
code, object code,
firmware, development
tools, files, records
and data,
and all media on which any of the foregoing is recorded; and
(h)
all similar, corresponding or equivalent
rights to any of the foregoing;
“
Investor Shares
” means the
Equity Securities of
the Company purchased
by the Investors pursuant
to the Subscription
Agreement
and/or otherwise held by the Investors from time to
time, including without limitation Equity Securities purchased pursuant to Section
3.06 (
Preemptive Rights
), and any Equity Securities issued by way of stock split or stock dividend on such Investor
Shares;
“
Investors
” has the meaning set forth in the preamble;
“
Investors Subscription
” means the subscription
for Equity Securities of the
Company by the Investors as provided
for in Article II
of the Subscription Agreement;
“
Investors’ Nominee Director
” has the meaning set forth in Section 2.01(a) (
Investors’ Board Rights
);
“
Investors’ Observer
” has the meaning set forth in Section 2.01(c) (
Investors’ Board Rights
);
“
Material Adverse Effect
” means a material adverse effect on:
(a)
the Company’s and its Subsidiaries’
assets or properties, taken as a whole;
(b)
the Company’s and its Subsidiaries’
business prospects or financial condition, taken as a whole;
(c)
the ability of the Company’s and its Subsidiaries’ businesses or operations,
taken as a whole, to continue as a going
concern; or
(d)
the ability of the Company
to (i) comply with its obligations
under this Agreement,
the Subscription Agreement or
its
Charter
and
(ii)
ensure
that
each
of
its
Subsidiaries
complies
with
its
obligations
under
this
Agreement
or
its
organizational
documents;
“
Nasdaq
” means The Nasdaq Global Select Market;
“
New Securities
” has the meaning set forth in Section 3.06(f) (
Preemptive Rights
);
“
Obstructive Practice
” has the meaning set forth in Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“Performance
Standards”
means
IFC’s
Performance
Standards
on
Social
&
Environmental
Sustainability,
dated
January
1,
2012,
copies
of
which
are
available
publicly
on
the
IFC
website
at
http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Sustainability+Framew
ork/Sustainability+Framework+-+2012/#PerformanceStandards;
“
Person
” means
any individual,
corporation, company,
partnership, firm,
voluntary association,
joint venture,
trust, unincorporated
organization, Authority or any other entity whether acting
in an individual, fiduciary or other capacity;
“
Plan Put
Trigger
Event
” means
the rejection
by the
Board of
Directors of
the Company
of a
Bona Fide
Offer at
a time when
the
Company has in place, or in response to such Bona Fide Offer the Company implements, a shareholder rights plan or similar plan that
has the
effect
of precluding
a hostile
offer
for
the Company
as a
result of
the triggering
of rights
to purchase
additional shares
of
Common
Stock or
stock of
the potential
acquirer
at a
discount if
an acquiring
person has
beneficial
ownership
of Common
Stock
representing more than a specified percentage of the Common Stock (such
plan a “
Shareholder Rights Plan
”);
“
Prospectus
” means
the prospectus or
prospectuses included in
any Registration Statement
(including, without limitation,
a prospectus
that includes any information
previously omitted from
a prospectus filed as part of
an effective Registration Statement
in reliance on
Rule
430A
under
the
Securities
Act
or
any
successor
rule
thereto),
as
amended
or
supplemented
by
any
prospectus
supplement,
5
including any Shelf Supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered
by such
Registration Statement and by all
other amendments and supplements to
the prospectus, including post-effective
amendments and all
material incorporated by reference in such prospectus or prospectuses;
“
Put Notice
” means a
notice delivered by
an Investor to
the Company pursuant
to Section 4.01(b)
(
The Put Option
) substantially in
the form of Schedule 3;
“
Put Option
” has the meaning set forth in Section 4.01(a) (
The Put Option
);
“
Put Price
” means the amount
obtained by multiplying the
relevant Put Price Per
Share by the relevant
number of Put Shares
specified
in the relevant Put Notice (with any Equity
Securities other than Common Stock treated as if
converted into or exercised or exchanged
for Common Stock of the Company at the date of the Put Notice);
“
Put Price Per Share
” means:
(a) in the case
of a Put Trigger
Event and a Threshold
Put Trigger Event,
as applicable, (I) the
higher of (i) (x)
in respect of
Put Shares purchased pursuant to the Subscription Agreement
the price per Investor Share paid
by the Investors pursuant
to the Subscription Agreement
and (y) in respect
of Put Shares purchased
pursuant to Section 3.06
(
Preemptive Rights
)
the price
per Investor
Share paid
by the
Investors in
such transaction
and (ii)
the volume
weighted
average price
per
share, as reported
by Bloomberg,
prevailing for
the sixty (60)
Nasdaq trading
days preceding
the Put Trigger
Event or
Threshold Put Trigge
r
Event, as applicable
and (II) in
respect of Additional
Put Shares,
the price per
share attributable
to each such share under
the Sale Agreement (as
adjusted for stock splits, stock
dividends, recapitalizations and
similar
transactions);
and
(b) in the case of a Plan Put Trigger Event, the highest price offered
in any Bona Fide Offer;
“
Put Shares
” means
the (i)
Investor Shares
owned by
any Investor
exercising its
Put Option
that were
purchased by
such Investor
pursuant
to (x)
the Subscription
Agreement
or (y)
Section 3.06
(
Preemptive
Rights
) of
this Agreement,
and
any
Equity Securities
issued by way
of stock split
or stock dividend
on such Investor
Shares and (ii)
the shares acquired
by the Investors
as a result of
the
transaction contemplated
by the Sale
Agreement (the
“
Additional Put
Shares
”) , and
any Equity
Securities issued
by way of
stock
split or stock dividend on such Additional Put Shares;
“
Put Trigger Event
” means (1) the formal filing by a governmental Authority of a complaint or instituting an action that specifically
alleges, or a court of competent jurisdiction enters a judgment
(whether or not the action giving rise to such judgment
is brought by a
governmental Authority)
finding that, the
Company or any
of its Subsidiaries
(i) engaged in
or authorized or
permitted any Affiliate
or any
other Person
acting on
its or
their behalf
to engage
in any
Sanctionable
Practice with
respect to
the Company
or any
of
its
Subsidiaries; (ii)
entered into
any transaction
or engaged
in activity
prohibited under
Section 3.03(d)
or (iii)
failed to
comply with
Section 3.03(f); or (2) an indictment of the Company or any of its Subsidiaries issued under the laws of the United States charging the
Company or any of its Subsidiaries with the conduct described in clauses (1)(i), (ii) or (iii) above, regardless of whether such conduct
occurred prior to or after the date hereof;
“
Registrable Securities
” means
(a) the Investor
Shares and (b)
any shares of
Common Stock
issued or issuable
with respect to
any
shares described in subsection (a) above by
way of a stock dividend
or stock split or in
exchange for or upon conversion of
such shares
or otherwise in connection
with a combination of shares,
distribution, recapitalization, merger,
consolidation, other reorganization
or
other similar
event with
respect to
the Common
Stock (it
being understood
that, for
purposes of
this Agreement,
a Person
shall be
deemed to be a
holder of Registrable Securities
whenever such Person
has the right to
then acquire or obtain
from the Company any
Registrable Securities,
whether or not
such acquisition has
actually been effected).
As to any particular
Registrable Securities,
such
securities shall
cease to
be Registrable
Securities when
(i) the
SEC has
declared a
Registration
Statement covering
such securities
effective and such securities
have been disposed of
pursuant to such
effective Registration Statement, (ii) such
securities are sold under
circumstances in which
all of the applicable
conditions of Rule 144
are met, (iii) such
securities become eligible
for sale pursuant
to
Rule 144
without volume
or manner-of-sale
restrictions and
without the
requirement for
the Company
to be in
compliance with
the
current public information requirement under Rule
144(c)(1), as set forth
in a written opinion letter
to such effect, addressed, delivered
and
reasonably
acceptable
to
the
applicable
transfer
agent
and
the
holders
of
such
securities,
(iv)
such
securities
are
otherwise
transferred, or (v) such securities have ceased to be outstanding;
“
Registration Statement
”
means any registration statement of the Company, including the Prospectus, amendments and
supplements
(including
Shelf
Supplements)
to
such
registration
statement,
including
post-effective
amendments,
all
exhibits
and
all
material
incorporated by reference in such registration statement;
“
Related Party
” means any Person: (a) that holds a material interest in the Company or any Subsidiary; (b) in which the Company or
any Subsidiary holds a
material interest; (c) that
is otherwise an
Affiliate of the Company;
(d) who serves
(or has within the
past twelve
(12) months served) as
a director, officer or employee
of the Company;
or (e) who
is a member
of the family
of any individual included
in any
of the
foregoing.
For the
purpose
of this
definition,
“material
interest” shall
mean
a direct
or indirect
ownership
of shares
representing at least twenty percent (20%) of the outstanding voting power
or equity of the Company or any Subsidiary;
6
“
Rule 144
” means Rule 144 under the Securities Act or any successor rule thereto;
“
Sale Agreement
” has the meaning set forth in the preamble;
“
S&E Management System
” means the Company’s social and environmental management system, as implemented or in effect from
time to time,
enabling it to
identify,
assess and manage
the social and
environmental risks in
respect of the
Company Operations
on
an ongoing basis in accordance with the S&E Requirements;
“
S&E Officer
” means
a senior
officer of
the Company
to be
responsible for
administration and
oversight of
the S&E
Management
System, initially appointed in accordance with the Action Plan;
“
S&E Requirements
” means the
social and environmental obligations
to be undertaken
by the Company
and its Subsidiaries
to ensure
compliance with: (a) Applicable S&E Laws and (b) the Performance
Standards;
“
Sanctionable
Practice
”
means
any
Corrupt
Practice,
Fraudulent
Practice,
Coercive
Practice,
Collusive
Practice,
or
Obstructive
Practice,
as
those
terms
are
defined
herein
and
interpreted
in
accordance
with
the
Anti-Corruption
Guidelines
attached
to
this
Agreement as Annex A (
Anti-Corruption Guidelines for IFC Transactions
);
“
SEC
” means
the U.S.
Securities and
Exchange Commission
or any
other federal
agency administering
the Securities
Act and
the
Exchange Act at the time;
“
Securities Act
” means the U.S. Securities Act of 1933, as amended;
“
Selling Expenses
”
means all underwriting
discounts, selling commissions
and stock transfer
taxes applicable to
the sale
of Registrable
Securities,
and
fees
and
disbursements
of
counsel
for
any
holder
of
Registrable
Securities,
except
for
the
reasonable
fees
and
disbursements
of counsel for the holders of Registrable Securities required to be paid by the Company
pursuant to Section 3.09(c);
“
Settlement Completion
” has the meaning set forth in Section 4.01(c)(ii) (
The Put Option
);
“
Settlement Date
” means the date for settlement of the purchase of the relevant Put Shares by the Company, as such date is specified
by an
Investor in
the Put
Notice, which
shall be
not less
than ten
(10) days
nor more
than sixty
(60) days
after the
date of
the Put
Notice and shall be a Business Day;
“
Shelf Registration
” has the meaning set forth in Section 3.07(a)(i) (
Registration Rights
);
“
Shareholder Rights Plan
” has the meaning set forth in the definition of Plan Put Trigger
Event;
“
Shelf Registration Statement
” has the meaning set forth in Section 3.07(a)(i) (
Registration Rights
);
“
Shelf Supplement
” has the meaning set forth in Section 3.07(a)(ii) (
Registration Rights
);
“
Shelf Takedown
” has the meaning set forth in Section 3.07(a)(ii) (
Registration Rights
);
“
Shell Bank
”
means
a bank
incorporated
in
a jurisdiction
in which
it has
no physical
presence
and
which
is not
an
Affiliate
of a
regulated bank or a regulated financial group;
“
Subscription Agreement
” has the meaning set forth in the Recitals;
“
Subsidiary
”
means
with
respect
to
the
Company,
an
Affiliate
over
fifty
per
cent
(50%)
of
whose
capital
is
owned,
directly
or
indirectly, by the Company;
“
Threshold Put Trigger Event
” means the
adoption of a
Shareholder Rights Plan at
a time when
there is no
Bona Fide Offer currently
pending and where
the beneficial ownership
threshold that would
“trigger” the separation
of the rights from
the Common Stock (the
“
Threshold
Trigger
”)
is
less
than
twenty
percent
(20%)
or
such
lower
amount
that
is
expressly
stated
in
the
Florida
Business
Corporation Act;
“
Threshold Trigger
” has the meaning set forth in the definition of Threshold Put Trigger
Event; and
“
Transaction Documents
” means this Agreement and the Subscription Agreement.
Section 1.02.
Interpretation
.
In this Agreement, unless the context otherwise requires:
(a)
headings are for convenience only and do not affect the
interpretation of this Agreement;
7
(b)
words importing the singular include the plural and vice versa;
(c)
a reference to
an Annex, Article, party,
Schedule or Section
is a reference
to that Article or
Section of, or
that Annex, party or Schedule to, this Agreement;
(d)
a reference to a document in the “agreed form” is a reference to a document approved and for the purposes
of identification initialed by or on behalf of the parties thereto;
(e)
a reference
to a
document includes
an amendment
or supplement
to, or
replacement or
novation of,
that
document but disregarding any amendment, supplement, replacement
or novation made in breach of this Agreement;
(f)
general words in this Agreement shall not be given a restrictive meaning by reason of their being preceded
or followed by words indicating a particular class of acts, matters or things or by
examples falling within the general words;
(g)
a reference to a party to any document includes that party’s
successors and permitted assigns; and
(h)
unless stated
otherwise herein,
a reference
to “shares
of the
Company” means
shares of
the Company
of
any class.
Section 1.03.
No Third Party Rights
.
Subject to Section 1.04 (
Exceptions to No Third Party Rights
), a Person who
is not a
party to this
Agreement has
no right to
enforce or enjoy
the benefit
of any term of
this Agreement.
Section 1.04.
Exceptions to No Third Party Rights
.
(a)
Any Person
entitled to indemnity
under Section
7.10 (
Costs, Expenses and
Third Party
Claims
) may enforce
such
Person’s rights thereunder
subject to and in accordance with the terms of this Agreement.
(b)
This Agreement may
be rescinded or
terminated and a
term may be
amended or waived
without the permission
of
any Indemnitee or its
permitted assignees even if that
removes a right which
the Indemnitee or its
permitted assignees would otherwise
have.
(c)
No Indemnitee or its permitted assignees may enforce a term of this Agreement without the prior written consent of
each Investor, which may be provided in
its sole discretion.
Such consent by each Investor
may be subject to any
terms and conditions
that it may determine in its sole discretion.
(d)
No Indemnitee
may,
without the
prior written
consent of
each Investor
and the
Company (such
consent not
to be
unreasonably withheld,
conditioned or delayed),
assign, charge or
otherwise dispose of
any rights it may
have under this Agreement
or grant or create any third party interest therein.
ARTICLE II
Corporate Governance
Section 2.01.
Investors’ Board Rights
.
(a)
For so long as the Investors in aggregate beneficially own Investor Shares representing at least five percent (5%) of
the issued and outstanding voting shares of the Company:
(i)
the Investors shall
have the right
to nominate one
(1) Director (the
“
Investors’ Nominee Director
”) to the Board,
and the
Company shall
take all
commercially
reasonably
action to
cause the
election of
such nominee,
including
nominating and recommending to the stockholders of the Company
such person for election, and
(ii)
the Board shall at
all times maintain the
following committees:
an Audit Committee, a
Nominating and Corporate
Governance Committee
and a Remuneration
Committee.
As long as the
Investors’ Nominee
Director satisfies the
independence requirements of Nasdaq listing standards and other Applicable Law,
the Investors’ Nominee Director
shall be appointed
as a
member of the
Audit Committee and
shall have the
right to attend
meetings of the
Nominating
and
Corporate
Governance
Committee and
Remuneration
Committee
as an
observer.
Any financial
audit of
the
Company
must
be
in
compliance
with
the
Accounting
Standards
and
approved
by
the
Audit
Committee.
The
Investors’ Nominee
Director shall
be appointed
as a
member of
any committee
formed by
the Board
to consider
and/or implement a Shareholder Rights Plan.
The Investors
agree that
the Investors’
Nominee Director
shall be
an individual
that is
not an
executive officer
or employee
of the
Company or any of its
Subsidiaries and does not otherwise
fall within paragraphs (A)-(F) of
NASDAQ Marketplace Rule 4200(a)(15).
8
(b)
For so
long as
the Investors
in aggregate
beneficially own
Investor Shares
representing at
least two
and one
-half
percent (2.5%) of
the issued and outstanding
voting shares of the
Company,
the Investors shall have
the right to appoint
an observer
(the “
Investors’ Observer
”) to the Board
at any time when
they have not designated,
or do not have
the right to designate,
a person
to
serve
as a
Director
on
the
Board,
provided
such
observer
enters
into
a
customary
observer
agreement
containing,
among
other
provisions, confidentiality and non-use obligations with respect to information acquired from the Company.
The Investors’ Observer
shall have
the right
to attend
all meetings
of the
Audit Committee,
the Nominating
and Corporate
Governance Committee
and the
Remuneration
Committee
as
an
observer.
The
Investors’
Observer
shall
have
the
same
information
rights
and
receive
the
same
information at the same time as each of the members of the Board and committees
(but will have no voting rights).
Section 2.02.
Removal/Resignation of Investors’ Nominee Director
.
The Investors may require the removal of
the Investors’
Nominee
Director
or
Investors’ Observer
at
any
time
and
shall
be
entitled
to
nominate
another
Person
as the
Investors’
Nominee
Director or Investors’ Observer in place of any Investors’ Nominee
Director or Investors’ Observer,
respectively, so removed.
In the
event of the resignation, retirement or vacation of office of
the Investors’ Nominee Director or Investors’ Observer, the Investors shall
be
entitled,
subject
to
Section
2.01
(
Investors’
Board
Rights
),
to
nominate
another
Person
as
the
Investors’
Nominee
Director
or
Investors’ Observer, as applicable, in place
of such Investors’ Nominee Director
or Investors’ Observer and the
Company shall ensure,
to the fullest extent of all its rights and powers, that such nominee is promptly
appointed as a Director or observer.
Section 2.03.
Procedures of the Board
.
(a)
The
Board
shall
meet
at
least
once
every
quarter
of
each
Financial
Year
subject
to
an
annual
schedule
and
confirmation of the date of the next Board meeting at the previous Board
meeting.
(b)
Written notice
of each
meeting of the
Board, and an
agenda setting out
in detail the
items of business
proposed to
be
transacted
at
such
meeting
together
with
necessary
information
and
supporting
documents,
shall
be
given
to
all
the
Directors.
Written notice
of each meeting of
a committee of the
Board, and an agenda
setting out in detail
the items of business
proposed to be
transacted
at
such
meeting
together
with
necessary
information
and
supporting
documents,
shall
be
given
to
all
Directors
on
that
committee.
Written notice of a meeting and the
materials to be provided under
this Section 2.03(b) shall be
sent to the address
notified
from time to time by the Directors at least five (5) Business Days in advance of such meeting; provided that where, exceptionally,
the
Board or a committee of the Board is required to make a decision in circumstances in which the foregoing notice requirements cannot
be observed, such notice and information requirements may be waived with the unanimous approval
of all Directors or, in the case of
a meeting of a committee of the Board, all Directors on that committee.
(c)
The Company shall
not amend Section
4.11 or
Article VI of the
Company’s
bylaws as in effect
on the date
hereof
without the prior consent of the Investors.
The Company shall enter into an indemnification agreement with each Director.
(d)
The Board shall
maintain a director
remuneration and expense
reimbursement policy providing
for the payment of
directors’ fees
and reimbursement
of expenses
to any
Director who
is not
an employee
of the
Company.
Such policy
shall include
reimbursement
of the
reasonable
expenses incurred
by such
Directors:
(i) in
attending
a board
or committee
meeting or
a General
Meeting or
any other meeting
which the
Director is
requested to
attend in
his capacity
as a
Director of
the Company
(including the
reasonable costs of travel and attendance of an Investors’ Nominee Director or Investors’ Observer); and (ii) in obtaining independent
legal or professional advice in furtherance of his or her duties as a Director.
(e)
If any action
is to
be taken by
written consent of
the Board (or
a committee thereof)
in lieu
of a
meeting, the Company
shall
circulate,
together
with
the
proposed
written
consent,
the
information
it
determines
in
good
faith
is
necessary
to
enable
the
Directors to make a fully-informed, good faith decision with respect to such the matter(s) that are the subject of such consent, and the
Company shall provide
each Director such
additional information
as any Director
may reasonably request
with respect to
the matter
being considered.
Section 2.04.
Advisory Committee
.
As soon as
practicable, but in any
event no later
than thirty (30)
days after the
date hereof,
the Company shall create, and thereafter maintain in existence, an advisory committee
(the “
Advisory Committee
”) which will act as
an advisor
to the
Company’s
chief executive
officer
or such
other person
in a
substantially similar
role.
The Advisory
Committee
will,
among
other
things,
advise
on
guidelines
to
govern
future
acquisitions,
strategic
partnerships
and
similar
activities
of
the
Company and its Subsidiaries.
Members of the Advisory Committee shall be comprised of the Company’s
chief executive officer (or
such other person in a substantially similar role), the Company’s chief financial officer, certain individuals with experience in the area
of financial technology designated by the Investors in
their sole discretion and, if approved by the Company’s
chief executive officer
(or such other person
in a substantially similar
role), certain external
individuals with experience
in the area of
financial technology.
For the avoidance of
doubt, the Advisory Committee
shall not have any
decision-making authority or authority to
create any obligation
on
behalf
of
the
Company,
and
the
Board
shall
have
no
obligation
to
follow
its
advice.
The
Company
shall
indemnify
and
hold
harmless the
non-employee
members of
the Advisory
Committee to
the maximum
extent permitted
under Applicable
Law for
any
reasonable and documented costs, expenses
or liabilities incurred by each such
member in connection with his or her
activities or his
or her position as a
member of the Advisory
Committee, other than those
arising directly from such
member’s gross negligence,
bad
faith or willful misconduct.
The Company’s obligation to have an
Advisory Committee will terminate when
the Investors in aggregate
beneficially own Investor Shares representing less than five percent (5%) of the
issued and outstanding voting shares of the Company.
9
ARTICLE III
Covenants
Section 3.01.
General Reporting Covenants
.
(a)
The Company shall furnish to each Investor the following information:
(i)
within ninety (90) days after the end
of each Financial Year, (A) annual consolidated financial statements (a balance
sheet as of the end of such Financial Year and the related statements of operations, comprehensive income, changes
in
equity
and
cash
flows
for
the
Financial
Year
then
ended)
for
the
Company,
audited
in
accordance
with
the
Accounting
Standards
and certified
by the
Auditors, together
with an
opinion of
the Auditors
on the
Company’s
internal control
over financial
reporting, and
(B) the
consolidating worksheet
used by
the Company
to prepare
its
consolidated
financial
statements,
certified
by
the
Company’s
chief
financial
officer
as
(x)
being
prepared
in
accordance with
the Company’s
books and
records and
accounting policies
in all material
respects, (y)
containing
all adjustments necessary for purposes of
presenting the Company’s consolidated financial statements in accordance
with the Accounting Standards and (z) fairly presenting in all material respects the
financial condition and results of
operations of the Company and each of the consolidating groups shown thereon;
and
(ii)
within forty-five (45) days after the end of the first three quarters of
each Financial Year,
(A) quarterly consolidated
financial
statements
(a
balance
sheet
as
of
the
end
of
such
quarter
and
the
related
statements
of
operations,
comprehensive income, changes in equity and cash flows for the quarter
and Financial Year
to date then ended) for
the Company,
prepared in accordance with
the Accounting Standards and
(B) the consolidating worksheet
used by
the
Company
to
prepare
its consolidated
financial
statements
for
such
quarter,
certified
by
the
Company’s
chief
financial officer as (x) being prepared in accordance with the
Company’s books and records and accounting policies
in
all
material
respects,
(y)
containing
all
adjustments
necessary
for
purposes
of
presenting
the
Company’s
consolidated
financial
statements
in
accordance
with
the
Accounting
Standards
and
(z)
fairly
presenting
in
all
material
respects the
financial
condition
and results
of operations
of the
Company
and
each of
the consolidating
groups
shown thereon; and
(iii) within
fifteen
(15)
days
after
receipt
thereof
by
the
Company,
any
management
letter
or
similar
letter
from
the
Auditors; and
(iv)
no
later
than
fifteen
(15)
days
before
commencement
of
each
Financial
Year,
the
proposed
annual
budget,
and
promptly following
approval by
the Board
of any
amended budget
for such
Financial Year,
the amended
budget;
and
(v)
no later than thirty (30)
days before the General Meeting,
the notice, agenda and relevant meeting
materials for the
General Meeting; and
(vi)
no later than fifteen
(15) days after each
General Meeting, the minutes
thereof reflecting decisions adopted
at such
meeting; and
(vii)
promptly after becoming aware thereof the name of any person or “group” (within the
meaning of Rule 13d-5 under
the Exchange Act) that beneficially owns more than five percent of any class of
the Company’s securities.
Notwithstanding the foregoing,
the Company shall not
be required to furnish
to the Investors any of
the foregoing information to
the
extent such information is available on the SEC’s EDGAR website and the Company has notified each Investor of the posting of such
information with a link to such information.
(b)
Pursuant to the
Subscription Agreement, the
Company has
irrevocably authorized and
instructed the Auditors
(whose
fees and
expenses shall
be for
the account
of the
Company) to
communicate
directly with
each Investor
at any
time regarding
the
Company’s
financial statements,
accounts and
operations.
The Company
shall take
such actions,
issue such
additional instructions
and
deliver
such
additional
documents
as
necessary
to
procure
the
Auditors’
compliance
with
such
instruction,
including
without
limitation having the Company provide any customary indemnity
and/or engagement letter required by the Auditors as a condition to
their
providing
to
the
Investors
any
information
they
may
request,
it
being
understood
that
any
such
information
request
will
be
evaluated by the
Auditors with reference
to the relevant
auditing standards, laws
and its formal
policy and may
be declined on
these
grounds.
No later than
thirty (30)
days after any
change in Auditors,
the Company
shall so authorize
and instruct
the new Auditors
pursuant to a letter in the
form set forth in Schedule 1
(
Form of Letter to Company’s
Auditors
) and provide a copy of
the Company’s
instructions and any other related documentation to each Investor.
(c)
The Company shall promptly provide
to the Investors such
information as any Investor from
time to time reasonably
requests with regard
to the Company
and any of its
Subsidiaries.
The Company shall
provide to the
Investors’ Nominee Director
or
Investors’ Observer, as applicable, all information as and when provided to any other Director in his or her capacity as a Director and,
at any Investor’s
request and to
the extent consistent
with Applicable Law, shall also
provide such information
to such Investor.
Unless
prohibited by Applicable Law, the Investors’ Nominee Director
and Investors’ Observer may
provide to each Investor
any information
10
that the
Investors’ Nominee
Director and
Investors’ Observer
receives in his
or her
capacity as
a Director
or observer,
respectively,
including,
without
limitation,
any
information
related
to
Company
Operations,
and
may
provide
periodic
reports
to
each
Investor
related to the discharge of his or her duties as a Director.
(d)
Each Investor
may at any
time, by notice
to the Company,
elect not to
receive any of
the information described
in
this Section 3.01.
In this case, the
Company shall provide
such Investor with
copies of all information
publicly disclosed that
is not
otherwise available on the SEC’s EDGAR
website.
Section 3.02.
Policy Reporting Covenants.
(a)
The Company shall promptly notify each Investor upon becoming aware of: (i) any
material litigation, investigation
or
proceeding
commenced
or
to
the
Company’s
Knowledge
threatened
against
the
Company
or
any
Subsidiary,
(ii)
any
criminal
investigations or proceedings commenced or to the Company’s Knowledge threatened against the Company or any Related Party, (iii)
the occurrence of a Put Trigger Event, and any such notification shall specify the nature of the action or proceeding and any steps that
the Company proposes to take
in response to the same
unless, and then only to
the extent, the Company’s
counsel concludes in good
faith such specification
would jeopardize
attorney-client or work
product privilege and
advises each Investor
of such determination,
(iv) the occurrence
of a Plan Put Trigger
Event, and any such
notification shall specify
the terms of the
Bona Fide Offer and
include
any
correspondence
received by
the Company
setting forth
the Bona
Fide Offer,
or (v)
the occurrence
of a
Threshold Put
Trigger
Event, and
any such
notification shall
specify why
the Board
determined to
have the
Threshold Trigger
of less than
twenty percent
(20%).
Separate notification
to each Investor
pursuant to this
Section 3.02(a)
shall not be
required to
the extent such
information is
filed with
the SEC
and available
on the
SEC’s
EDGAR website
and the
Company has
notified each
Investor of
the posting
of such
information with a link to such information.
(b)
Upon each Investor’s request,
and with no less than three (3)
days prior notice to the Company,
the Company shall
permit representatives of each Investor and the CAO, during normal
office hours, to:
(i)
visit any of the sites and premises where the business of the Company or its Subsidiaries
is conducted;
(ii)
inspect any of the sites, facilities, plants and equipment, offices,
branches and other facilities of the Company or its
Subsidiaries;
(iii) have access to the books of account
and all records of the Company and its Subsidiaries; and
(iv)
have access
to those
employees, agents,
contractors and
subcontractors of
the Company
and its
Subsidiaries who
have or may have knowledge of matters with respect to which such Investor
or the CAO seeks information;
provided that in the case of the CAO, such access shall be solely for the purpose of
carrying out the CAO’s Role.
(c)
The Company shall, and shall ensure that each of its Subsidiaries shall:
(i)
within
ninety
(90)
days after
the
end
of each
Financial
Year,
deliver
to
each Investor
the corresponding
Annual
Monitoring Report confirming compliance with the Action Plan, the social and
environmental covenants set forth in
this Agreement and Applica
ble S&E Law,
or, as the
case may be, identifying
any non-compliance or failure
(other
than
any
immaterial
non-compliance
or
failure),
and
the
actions
being
taken
to
remedy
it,
and
including
such
information as
any Investor
shall reasonably
require in
order to
measure the
ongoing development
results of
such
Investor’s investment in the Investor
Shares, which information the Investors
may hold and use in accordance
with
IFC’s
Access
to
Information
Policy,
dated
January
1,
2012,
which
is
available
at
http://www.ifc.org/wps/wcm/connect/98d8ae004997936f9b7bffb2b4b33c15/IFCPolicyDisclosureInformation.pdf?
MOD=AJPERES; and
(ii)
within three
(3) days after
becoming aware of
the occurrence, notify
each Investor of
any social, labor,
health and
safety, security or environmental incident,
accident or circumstance having, or which could reasonably be expected
to
have,
any
material
adverse
social
and/or
environmental
impact
or
any
material
adverse
impact
on
the
implementation or
operation of
the Company’s
Operations in
compliance with
the S&E
Requirements, specifying
in each case
the nature
of the incident,
accident, or
circumstance and
the impact or
effect arising
or likely
to arise
therefrom, and the measures the Company and/or the relevant Subsidiary,
as applicable, is taking or plans to take to
address
them
and
to
prevent
any
future
similar
event;
and
keep
each
Investor
informed
of
the
on-going
implementation of those measures.
(d)
The Company
shall furnish
to each
Investor, within
ninety (90)
days after
the end of
each Financial
Year,
at least
one of the following:
(i)
a
report
by
the
AML/CFT
Officer
on
the
implementation
of,
and
compliance
with,
the
Company’s
AML/CFT
policies, procedures and controls;
11
(ii)
an internal or external auditor’s
assessment on the adequacy of the
Company’s AML/CFT policies,
procedures and
controls; or
(iii) a report
by the AML/CFT
regulator of the
Company concerning the
Company’s compliance
with local AML/CFT
laws and regulations.
(e)
The Company shall
furnish to each
Investor, within
thirty (30) days
after the renewal
or replacement of
any of the
insurance policies referred to in Section 3.03(g) (
Policy Covenants
) and Annex C, a copy of that policy.
(f)
Each Investor
may at any
time, by notice
to the Company,
elect not to
receive any of
the information described
in
this Section 3.02.
In this case, the
Company shall provide
such Investor with
copies of all information
publicly disclosed that
is not
otherwise available on the SEC’s EDGAR
website.
Section 3.03.
Policy Covenants
.
(a)
Sanctionable Practices.
(i)
The Company
hereby agrees
that it
shall not
engage in
(nor authorize
or permit
any Affiliate
or any
other Person
acting on its behalf to engage in) any Sanctionable Practice with respect to the
Company;
(ii)
The Company shall not, and shall not permit any of its Subsidiaries and any stockholder that Controls the Company
and or
any counterparty
of the
Company or
any Subsidiary
in respect
of a
material transaction,
to (x)
enter into
a
business relationship with any Person that
is currently a target of any
economic sanctions administered by the Office
of
Foreign
Assets
Control
of
the
U.S.
Treasury
Department
or
(y)
provide
any
financing
or
services
to
or
in
connection with any activity in any sector under embargo by the
United Nations;
(iii) The Company further covenants that should it become aware of any violation of Section 3.03(a)(i), it
shall promptly
notify each Investor; and
(iv)
If any Investor
notifies the Company of
its concern that
there has been
a violation of Section
3.03(a)(i), the Company
shall cooperate in good faith with
the Investors and their representatives in
determining whether such a violation has
occurred, and shall respond promptly and in
reasonable detail to any reasonable request from any
Investor, and shall
furnish
documentary support for such response upon such Investor’s request.
(b)
Affirmative Environmental Covenants.
The Company shall and shall ensure that each of its Subsidiaries shall:
(i)
implement the Action Plan and undertake Company Operations in compliance in all material respects with the S&E
Requirements and all Applicable S&E Law; and
(ii)
periodically review
the form of
the report setting
out the specific
social, environmental
and developmental
impact
information
to be
provided
by the
Company
in
respect of
Company
Operations
(the “
S&E Annual
Monitoring
Report
”) and advise each Investor as to whether revision of the form is necessary or appropriate in light of changes
to Company
Operations
and revise
the form
of the
S&E Annual
Monitoring Report,
if applicable,
with the
prior
written consent of each Investor.
(c)
Negative Environmental Covenants.
The Company shall not and shall ensure that each
of its Subsidiaries shall not
amend, waive the
application of, or
otherwise materially
restrict the scope
or effect of,
the S&E Management
System (including
the
Action Plan and the S&E Requirements) without the prior written consent
of each of the Investors.
(d)
UN Security Council Resolutions.
The Company shall not and shall ensure that each of its
subsidiaries shall not: (i)
enter into any transaction
with, or for
the benefit of,
any of the
individuals or entities named
on lists promulgated by
the United Nations
Security Council under Chapter VII of the United Nations Charter or currently a
target of any economic sanctions administered by the
Office of Foreign Assets
Control of the U.S. Treasury
Department (“
Sanctions Target
”); or (ii) engage in any
activity prohibited by
any resolution of
the United Nations
Security Council under
Chapter VII of
the United Nations
Charter or any
business relationship
with any Sanctions Target.
(e)
Shell Banks. The
Company shall and
shall ensure that
each of its Subsidiaries
shall institute, maintain
and comply
with commercially reasonable internal procedures and controls to ensure that:
(i)
any financial institution with
which the Company or
its Subsidiaries conducts business
or enters into
any transaction,
or
through
which
the
Company
or
its
Subsidiaries
transmits
any
funds,
does
not
have
correspondent
banking
relationships with any Shell Bank; and
12
(ii)
the Company
shall not
and shall
ensure
that each
of its
Subsidiaries
shall not
conduct
business or
enter
into any
transaction with, or transmit any funds through a Shell Bank.
(f)
AML/CFT.
The Company shall,
and shall ensure
that each of its
Subsidiaries shall, take
commercially reasonable
steps to institute, maintain
and comply with internal
policies, procedures and controls
for AML/CFT consistent with
its business and
customer
profile,
in
compliance
with
national
laws
and
regulations,
and
in
furtherance
of
applicable
AML/CFT
best
practices
recommendations
of
the
Organization
for
Economic
Co-operation
and
Development’s
Financial
Action
Task
Force
on
Money
Laundering.
(g)
Insurance.
The Company shall, and
shall ensure that each of
its Subsidiaries shall: (i)
insure and keep insured
with
reputable
insurers that
cover such
risks and
contain such
policy limits,
types of
coverage as
are adequate
to insure
against risks
to
which
the
Company,
its
Subsidiaries
and
their
respective
employees,
business,
properties
and
other
assets
would
reasonably
be
expected to be exposed to in the operation of the
business as currently conducted and as proposed to be conducted,
including without
limitation the
insurances specified
in Annex C,
on terms and
conditions reasonably
acceptable to each
Investor; (ii) promptly
notify
the
relevant
insurer
of
any
claim
under
any
policy
written
by
that
insurer
and
diligently
pursue
that
claim;
(iii)
comply
with
all
warranties and
conditions under
each insurance
policy; (iv)
not do
or omit
to do,
or permit
to be
done or
not done,
anything which
might prejudice the Company’s (and/or any of its Subsidiaries’ right to claim or recover under any insurance policy; and (v) within
30
days of any renewal or replacement of an insurance policy required in Annex C, provide
to each Investor a copy of that policy.
(h)
Shareholder Rights Plan.
The Company shall not
adopt a Shareholder Rights
Plan having a term
of more than one
(1)
year,
provided
that
the
foregoing
shall
not
prevent
the Company
from
adopting
a
new
Shareholder
Rights
Plan
to
replace
the
expired Shareholder Rights Plan.
The Threshold Trigger in any Shareholder Rights Plan adopted by the Board shall be established at
twenty percent
(20%) or
such lower
amount that
is expressly
stated in
the Florida
Business Corporation
Act (the
“
20% Threshold
Trigger
”
)
unless the Board, or committee thereof implementing the Shareholder Rights Plan, determines, upon the advice of counsel,
that
using
a 20%
Threshold
Trigger
would reasonably
be expected
to be
inconsistent
with
its fiduciary
duties,
in
which
event
the
Threshold Trigger shall be
set at
the highest percentage
determined by the
Board or such
committee to be
consistent with such
fiduciary
duties.
Section 3.04.
Other Affirmative Covenants
.
The Company shall and shall ensure that each of its Subsidiaries shall:
(a)
undertake
its business,
activities and
investments
in compliance
in all
material
respects with
Applicable
Law; and
(b)
adopt
and
maintain
a
policy
designed
to
maximize
its
ownership
of
Intellectual
Property
developed
or
acquired in the course of its operations, which policy shall require the Company and its Subsidiaries to: (i) cause all material
technological developments,
patentable or unpatentable,
inventions, discoveries or
improvements by the
Company’s
or any
of its
Subsidiaries’ officers
or employees
to be
documented in
accordance with
appropriate professional
standards; and
(ii)
cause all officers and key employees, and to the extent practicable,
consultants of the Company and its Subsidiaries, to enter
into non-disclosure and proprietary rights agreements in customary form,
approved by the Board of Directors.
Section 3.05.
Use of
Proceeds
.
The Company
shall use
the
proceeds
from the
sale of
the Investor
Shares for
(i) capital
expenditures;
(ii)
acquisitions
in
the financial
technology
sector pursuant
to guidelines
to be
adopted
by the
Company
taking
into
account the recommendations of the Advisory Committee; and (iii) general corporate purposes.
A majority of all such proceeds must
be used for the forgoing purposes in developing countries or emerging
markets specified on Annex D.
The Company shall not use of
any such proceeds
in the territories of
any country that is
not a member of
the World
Bank or for reimbursements
of expenditures in
those territories or
for goods produced
in or services
supplied from any
such territory.
Notwithstanding anything herein to
the contrary,
each
Investor
acknowledges
that
nothing
in
this
Section
3.05
shall
prohibit
the
Company
from
using
its
existing
cash
reserves
in
countries or markets not specified in Annex D, provided such use
complies with Applicable Law and does not violate Section 3.03(d).
Section 3.06.
Preemptive Rights
.
For so long
as the Investors
hold in aggregate
5% of the
outstanding shares
of Common
Stock of the Company, each Investor shall have the right to purchase its pro-rata share of New Securities in the manner set out below:
(a)
If the Company proposes to issue New Securities, it shall give each Investor written notice of its intention,
describing the New Securities,
their price, and their general
terms of issuance, and specifying
each Investor’s pro-rata share
of
such
issuance
(the
“
Issue
Notice
”).
Each
Investor
shall
have
thirty
(30)
days
after
any
such
notice
is
delivered
(the
“
Notification Date
”) to give the Company written notice that it agrees to purchase part or all
of its pro-rata share of the New
Securities for the price
and on the terms specified
in the Issue Notice (the
“
Subscription Notice
”).
Each Investor may also
notify the Company in the
Subscription Notice that it
is willing to buy
a specified number of
the New Securities (“
Additional
Securities
”) not taken up
by the other Investors (“
Unpurchased Securities
”) for the price and
on the terms specified
in the
Issue Notice.
(b)
For the
avoidance of
doubt, the
Company
shall not
issue any
New Securities
until after
the Notification
Date.
13
(c)
If an Investor has
indicated that it is
willing to buy Additional
Securities (an “
Overallotment Investor
”),
the Company shall give such Overallotment Investor
written notice of the total
number of Unpurchased Securities within five
(5) days of the expiry of the thirty (30) day period
referred to in Section 3.06(a).
Such notice shall specify the particulars of
the payment
process for
the New
Securities to
be purchased
by such
Overallotment
Investor pursuant
to the
Subscription
Notice.
(d)
On the tenth (10
th
) Business Day after expiry of the thirty (30) day period referred to in Section 3.06(a):
(i)
each Investor shall subscribe for the number of its pro-rata shares specified in
the Subscription Notice;
(ii)
if an Investor has indicated that
it is willing to buy
Additional Securities, such Overallotment Investor shall also
subscribe
for
the
lower
of
the
number
of
Additional
Securities
and
its
pro
rata
share
of
the
number
of
Unpurchased Securities;
(iii) each Investor shall pay the relevant
consideration to the Company; and
(iv)
the Company shall register in the name of each Investor the number
of New Securities for which such Investor
has subscribed.
(e)
If the Company has not consummated the proposed issuance of New Securities within one hundred twenty
days (120)
days following
the date of
the Issuance
Notice, the
Company may
not issue
such New
Securities without
again
complying with this Section 3.06.
(f)
“
New
Securities
”
shall
mean
any
Equity
Securities
of
the
Company;
provided,
that
the
term
“
New
Securities
” does not include:
(i)
Common Stock (or options to purchase Common Stock) issued or issuable to officers, directors and employees
of, or consultants to, the Company pursuant to an equity incentive plan that has been
approved by the Board of
Directors, not to exceed five percent (5%) of the then issued and outstanding
shares of Common Stock;
(ii)
Common Stock
issuable upon the
exercise, exchange
or conversion of
Equity Securities outstanding
as of the
date
of
this
Agreement
or
issued
after
the
date
hereof
pursuant
to
exercisable,
exchangeable
or
convertible
Equity Securities issued in a transaction to which this Section 3.06 was applicable;
(iii)
Common Stock issued or issuable in connection with any stock split or
stock dividend of the Company;
(iv)
Common
Stock (or
options
or warrants
to purchase
Common
Stock)
issued or
issuable
to banks,
equipment
lessors or other
financial institutions
pursuant to
a debt financing
or commercial
leasing transaction
approved
by the
Board of
Directors, not
to exceed
two and
one-half percent
(2.5%) of
the then
issued and
outstanding
shares of Common Stock; and
(v)
Common Stock issued
or issuable pursuant
to the bona
fide acquisition of
another Person by
the Company by
merger, purchase of substantially
all of the assets of such Person, or exchange of shares or other transaction, in
each case, approved
by the
Board of
Directors, not to
exceed five
percent (5%)
of the
then issued
and outstanding
shares of Common Stock.
(g)
If any
Investor is
unable to
exercise, in
whole or
in part, its
right to
purchase New
Securities pursuant
to
this Section 3.06, such
Investor shall have the
right to transfer its
rights to purchase New
Securities to any other
Investor or
to any Affiliate of any Investor.
Section 3.07.
Registration Rights
.
(a)
Short Form Registration.
(i)
On June 10,
2016, the
Company filed
with the SEC
a Registration
Statement on
Form S-3
or the then
appropriate
form
(or
a
post-effective
amendment
to
a
currently
effective
Registration
Statement)
for
an
offering
to
be
made
on
a
delayed
or
continuous basis pursuant to Rule 415 under the Securities
Act or any successor rule thereto (each such
registration statement a “
Shelf
Registration Statement
” and
the Shelf
Registration
Statement filed
on June
10, 2016,
the “
Initial Registration
Statement
”) that
covers all
Registrable Securities
then outstanding
for an
offering to
be made
on a
delayed or
continuous basis
pursuant to
Rule 415
under the
Securities Act
or any successor
rule thereto (a
“
Shelf Registration
”), which
was declared
effective on
June 24, 2016.
If,
after the filing
of a Shelf
Registration Statement,
an Investor
requests registration
under the Securities
Act of additional
Registrable
Securities (including Registrable
Securities acquired pursuant
to Section 3.06
(
Preemptive Rights
)) pursuant to
such Shelf Registration,
the Company
shall, as soon
as practicable,
but in any
event no later
than thirty
(30) days after
the date of
such request,
amend such
Shelf Registration Statement to cover such additional Registrable Securities.
14
(ii)
At
any
time
that
a
Shelf
Registration
Statement
is
effective
but
no
more
than
once
each
calendar
quarter,
if
an
Investor delivers a
notice to the
Company (a “
Shelf Takedown
Notice
”) stating that
such Investor
(and each other
Investor electing
to
join
in
such
Shelf
Takedown)
intends
to
effect
an
offering
of
all
or
part
of
its
Registrable
Securities
included
in
such
Shelf
Registration Statement
(a “
Shelf Takedown
”) and
the Company
is eligible
to use
such Shelf
Registration Statement
for such
Shelf
Takedown,
then
the
Company
shall
take
all
actions
reasonably
required,
including
amending
or
supplementing
(a
“
Shelf
Supplement
”) such Shelf Registration
Statement, to enable such Registrable
Securities to be offered and
sold as contemplated by
such
Shelf
Takedown
Notice;
provided,
however,
that
before
an
Investor
delivers
a
Shelf
Takedown
Notice,
it
shall
contact
the
other
Investors
to
determine
whether
they
wish
to
participate
in
the
Shelf
Takedown,
and
include
in
such
Shelf
Takedown
Notice
any
Registrable Securities requested to be
included by such other Investor(s);
and provided further that in no
event shall the Company be
obligated to comply with more than one (1) Shelf Takedown Notice in the aggregate in any calendar quarter from any or all Investors.
Each Shelf Takedown
Notice shall specify the number of Registrable Securities to be offered and sold under the Shelf Takedown
and
the Investors
participating.
The Company
shall prepare
and file
with the
SEC a
Shelf Supplement
as soon
as practicable
(but in no
event later than five (5) Business Days) after the date on
which it received the Shelf Takedown
Notice and, if such Shelf Supplement
is an amendment
to such Shelf Registration
Statement, shall use
its commercially reasonable
efforts to cause
such Shelf Supplement
to be declared effective by the SEC as soon as practicable thereafter.
(iii)
If, pursuant to
Rule 415(a)(5) under
the Securities
Act or
any successor
rule thereto, the
Initial Registration
Statement
may no
longer be
used for
offers and
sales of
any of
the securities
registered for
resale on
such registration
statement (the
“
Initial
Registrable Securities
”), and (C) any of the Initial Registrable Securities are Registrable Securities at the time that (B) above occurs,
the Company shall prepare and file with
the SEC within the time
limits required by Rule 415 under
the Securities Act or any successor
rule thereto a new Registration Statement covering
any Initial Registrable Securities that have not ceased to
be Registrable Securities
for an offering to be
made on a delayed
on continuous basis pursuant to
Rule 415 under the
Securities Act or any successor
rule thereto
(a “
New Registration Statement
”) and shall use its commercially reasonable efforts to cause such New Registration
Statement to be
declared effective by the SEC as soon as practicable thereafter.
(iv)
The Company may postpone for up to forty-five (45) days the filing of a Shelf Supplement for a Shelf Takedown
if
the Board determines in its reasonable
good faith judgment that such Shelf
Takedown would (A) materially interfere with a significant
acquisition,
corporate
organization,
financing,
securities
offering
or
other
similar
transaction
involving
the
Company;
(B)
require
premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (C)
render the Company unable
to comply with requirements under
the Securities Act or Exchange
Act.
The Company shall, within one
(1) day following the decision
of the Board to
delay such filing, provide each
Investor with a certificate
signed by the Chairman stating
that the Board has determined
to postpone the filing,
the reason for the postponement
and the expected date
of filing.
The Company
may delay a Shelf Takedown
hereunder only once in any period of 12 consecutive months.
(v)
If the Investors request a Shelf Takedown
and elect to distribute the Registrable Securities covered by its request in
an underwritten offering, they shall so advise the Company as a part of its request made pursuant to Section 3.07(a)(ii).
The Investors
participating in the
Shelf Takedown shall select
the investment banking
firm or
firms to act
as the
managing underwriter or
underwriters
in connection with such offering; provided, that such selection shall be
subject to the consent of the Company, which consent shall not
be unreasonably withheld, conditioned or delayed.
(vi)
The Company shall not
include in any Shelf Takedown
any securities which are not
Registrable Securities without
the prior written consent of the Investors participating in the Shelf Takedown.
If a Shelf Takedown involves an underwritten offering
and
the
managing
underwriter
of
the
requested
Shelf
Takedown
advises the
Company
and
the
Investors
participating
in
the
Shelf
Takedown
in writing that in its reasonable and good faith opinion the number of shares of Common
Stock proposed to be included in
the
Shelf
Takedown,
including
all
Registrable
Securities
and
all
other
shares
of
Common
Stock
proposed
to
be
included
in
such
underwritten offering,
exceeds the
number of
shares of
Common Stock
which can
be sold
in such
underwritten offering
and/or the
number of shares of Common Stock proposed to be included
in such Shelf Takedown would adversely affect the price per share of the
Common Stock
proposed to
be sold
in such
underwritten offering,
the Company
shall include
in such
Shelf Takedown
(i) first,
the
shares
of
Common
Stock
that
the
Investors
propose
to
sell, and
(ii)
second,
the
shares
of
Common
Stock,
if
any,
proposed
to
be
included therein
by any
other Persons
(including shares
of Common
Stock to
be sold
for the
account of
the Company
and/or other
holders of Common Stock) allocated among such Persons in such manner as they may agree.
If the managing underwriter determines
that less than all of the Registrable Securities proposed to be sold can be included in such
offering, then the Registrable Securities that
are included in such
offering shall be allocated
pro rata among the
Investors on the basis
of the number of
Registrable Securities owned
by each such Investor.
(b)
Registration Procedures.
In connection with the Company’s obligations under Section
3.07(a) and if and whenever
the Investors request that any Registrable Securities be distributed in
a Shelf Takedown pursuant to the provisions
of Section 3.07(a),
the Company shall use its commercially reasonable efforts to effect the registration of the offer and sale of such Registrable Securities
under the
Securities Act
in accordance
with the
intended method
of disposition
thereof, and
pursuant thereto
the Company
shall as
soon as practicable and as applicable:
(i)
subject
to
Section
3.07(a)(iv),
prepare
and
file
with
the
SEC
a
Registration
Statement
covering
such
Registrable
Securities and use its commercially reasonable efforts to cause such
Registration Statement to be declared effective;
15
(ii)
prepare
and
file
with
the
SEC
such
amendments,
post-effective
amendments
and
supplements,
including
Shelf
Supplements, to
such Registration
Statement and
the Prospectus
used in
connection therewith
as may
be necessary
to
keep such
Registration Statement
effective and
to comply
with the
provisions of
the Securities Act
with respect
to the
disposition
of
all
Registrable
Securities
subject
thereto
for
a
period
ending
on
the
date
on
which
all
the
Registrable
Securities subject thereto have been sold pursuant to such Registration Statement;
(iii) at
least five
(5)
Business
Days
before
filing
such
Registration
Statement,
Prospectus
or
amendments
or
supplements
thereto with
the SEC,
furnish to
one counsel
selected by
the Investors
copies of
such documents
proposed to
be filed,
which documents shall be
subject to the review, comment and
approval of such counsel;
provided that the Company
shall
not have
any obligation
to modify
any information
(other than
any information
related to
any seller)
if the
Company
reasonably expects that so doing would cause (A) the
Registration Statement to contain an untrue statement of a
material
fact
or
omit
to
state
any
material
fact
required
to
be
stated
therein
or
necessary
to
make
the
statements
therein
not
misleading
or
(B)
the
Prospectus
to
contain
an untrue
statement
of
a
material
fact
or
to
omit
to
state
a
material
fact
necessary
in
order
to
make
the
statements
made,
in
light
of
the
circumstances
under
which
they
were
made,
not
misleading;
(iv)
notify
each selling
Investor,
promptly
after the
Company
receives notice
thereof,
of the
time when
such Registration
Statement has been declared
effective or a supplement,
including a Shelf Supplement,
to any Prospectus forming
a part
of such Registration Statement has been filed with the SEC;
(v)
furnish
to
each
selling
Investor
such
number
of
copies
of
the
Prospectus
included
in
such
Registration
Statement
(including
each
preliminary
Prospectus)
and
any
supplement
thereto,
including
a
Shelf
Supplement
(in
each
case
including all
exhibits and
documents incorporated
by reference
therein), and
such other
documents as
such seller
may
reasonably request in order to facilitate the disposition of the Registrable Securities owned
by such seller;
(vi)
use its
commercially reasonable
efforts to
register or
qualify such
Registrable Securities
under such
other securities
or
“blue sky” laws of such jurisdictions as any selling Investor reasonably requests and do any and all other acts and things
which
may
be
reasonably
necessary
or
advisable
to
enable
such
Investor
to
consummate
the
disposition
in
such
jurisdictions of the Registrable Securities
owned by Investor; provided, that the
Company shall not be required to
qualify
generally
to do
business, subject
itself to
general taxation
or consent
to general
service of
process in
any jurisdiction
where it would not otherwise be required to do so but for this Section 3.07(b)(vi)
;
(vii)
notify each selling Investor, at
any time when
a Prospectus relating
thereto is required
to be delivered
under the Securities
Act, of the
happening of any
event that would
cause the Prospectus
included in such
Registration Statement to
contain
an untrue statement
of a material
fact or omit
any fact necessary
in order to
make the statements
made therein, in
light
of the circumstances under which they
were made, not misleading, and, at
the request of any such
Investor, the Company
shall prepare
a supplement
or amendment
to such
Prospectus so
that, as
thereafter delivered
to the
purchasers of
such
Registrable Securities, such
Prospectus shall not
contain an untrue
statement of a
material fact or omit
to state any fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(viii)
make available,
upon reasonable
notice and
during normal
business hours,
for inspection
by any
selling Investor,
any underwriter participating
in any disposition
pursuant to such Registration
Statement and any
attorney,
independent
registered public accounting firm or other agent retained by any such Investor or underwriter (each, an “
Inspector
”), all
financial
and
other
records,
pertinent
corporate
documents
and
properties
of
the
Company
as
shall
be
reasonably
necessary to enable them to
exercise their due diligence responsibility,
and cause the Company’s
officers, directors and
employees to
supply all
information reasonably
requested by
any such
Inspector in
connection with
such Registration
Statement;
(ix)
provide a transfer agent and registrar (which may be the
same entity) for all such Registrable Securities
not later than the
effective date of such registration;
(x)
use its commercially
reasonable efforts to
cause such Registrable Securities
to be listed on
each securities exchange
on
which the common stock is then listed;
(xi)
in connection with an underwritten offering, enter
into such customary agreements (including underwriting
and lock-up
agreements in customary form) and take all such other
customary actions as the participating Investors
or the managing
underwriter
of
such
offering
reasonably
request
in
order
to
expedite
or
facilitate
the
disposition
of
such
Registrable
Securities (including,
without limitation,
making appropriate
officers of
the Company
available to
participate in
“road
show”
and
other
customary
marketing
activities
(including
one-on-one
meetings
with
prospective
purchasers
of
the
Registrable
Securities),
provided
that
the
Company
shall
not
be
obligated
to
participate
in
any
non-telephonic
“road
show” more than once in any eighteen (18) month period);
(xii)
otherwise comply with all applicable rules and regulations of
the SEC and make available to its
stockholders an earnings
statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities
Act or any successor rule
thereto) no later than thirty
(30) days after the end
of the 12-month period beginning
with the
16
first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings
statement shall cover said 12-month period, and
which requirement will be deemed to
be satisfied if the Company
timely
files complete and accurate information on Forms 10-K, 10-Q and
8-K under the Exchange Act and otherwise complies
with Rule 158 under the Securities Act or any successor rule thereto;
(xiii)
furnish
to
each
selling
Investor
and
each
underwriter,
if
any,
with
(i)
a
written
legal
opinion
of
the
Company’s
outside counsel, dated
the closing date of
the offering, in
form and substance
as is customarily given
in opinions of the
Company’s counsel to underwriters in underwritten registered
offerings; and (ii) on
the date of the
applicable Prospectus,
on the effective date
of any post-effective amendment
to the applicable Registration Statement
and at the closing of
the
offering,
dated
the
respective
dates
of
delivery
thereof,
a
“comfort”
letter
signed
by
the
Company’s
independent
registered public accounting firm in form and substance as is customarily given in accountants’ letters to underwriters in
underwritten registered offerings;
(xiv)
without limiting Section
3.07(b)(v), use its commercially
reasonable efforts to
cause such Registrable Securities
to
be registered with or
approved by such other governmental
agencies or authorities as may
be necessary by virtue
of the
business
and
operations
of
the
Company
to
enable
the
Investors
to
consummate
the
disposition
of
such
Registrable
Securities in accordance with their intended method of distribution
thereof;
(xv)
notify
the
Investors
promptly
of
any
request
by
the
SEC
for
the
amending
or
supplementing
of
such
Registration
Statement or Prospectus or for additional information;
(xvi)
advise the Investors,
promptly after it shall
receive notice or obtain
knowledge thereof, of
the issuance of
any stop
order
by the
SEC suspending
the
effectiveness
of
such
Registration
Statement
or
the
initiation
or
threatening
of any
proceeding for
such purpose
and promptly
use its
commercially reasonable
efforts to
prevent the
issuance of
any stop
order or to obtain its withdrawal at the earliest possible moment if such stop order should
be issued;
(xvii)
if
any
Registration
Statement
refers
to
any
Investor
by
name
or
otherwise
as
the
holder
of
any
securities
of
the
Company
and
if
in
its
sole
and
exclusive
judgment
such
Investor
is
or
might
be
deemed
to
be
an
underwriter
or
“controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) of the
Company
(each
such Person
a “
Controlling
Person
”), such
Investor
shall have
the right
to require
(A) the
insertion
therein of language, in form and substance satisfactory to such Investor
and presented to the Company in writing, to the
effect that
the holding by
such Investor of
such securities is
not to be
construed as a
recommendation by such
Investor
of the
investment quality
of the
Company’s
securities covered
thereby and
that such
holding does
not imply
that such
Investor shall assist in meeting any future financial requirements of the Company, or (B) in the event that such reference
to such Investor
by name or
otherwise is not
required by the
Securities Act or
any similar federal
statute then in
force,
the deletion of the reference to such Investor;
(xviii)
cooperate
with
the
Investors
to
facilitate
the
timely
preparation
and
delivery
of
certificates
representing
the
Registrable Securities to be sold pursuant to such Registration Statement or
Rule 144 free of any restrictive legends and
representing
such number
of shares
of Common
Stock and
registered in
such names
as the
Investors may
reasonably
request a
reasonable period
of time
prior to
sales of
Registrable Securities
pursuant to
such Registration
Statement or
Rule 144; provided,
that the Company
may satisfy its
obligations hereunder
without issuing
physical stock certificates
through the use of The Depository Trust Company’s
Direct Registration System;
(xix)
upon the Registration Statement covering the Registrable Securities being
declared effective by the SEC, removing
any restrictive
notation placed on
the Registrable Securities
as contemplated
by Section 3.02(f)(iv)
of the Subscription
Agreement;
(xx)
take no
direct or
indirect action
prohibited by
Regulation M
under the
Exchange Act;
provided, that,
to the extent
that
any prohibition is applicable to the Company,
the Company will take all reasonable action to make any such prohibition
inapplicable; and
(xxi)
otherwise use its commercially
reasonable efforts
to take all other
steps necessary to
effect the registration
of such
Registrable Securities contemplated hereby.
(c)
Expenses.
All expenses (other
than Selling Expenses)
incurred by the
Company in complying
with its obligations
pursuant
to
this
Agreement
and
in
connection
with
the
registration
and
disposition
of
Registrable
Securities
shall
be
paid
by
the
Company,
including, without
limitation, all
(i) registration
and filing
fees (including,
without limitation,
any fees
relating to
filings
required to be
made with, or
the listing of
any Registrable Securities
on, any securities
exchange or over-the-counter
trading market
on which
the Registrable
Securities are
listed or
quoted); (ii)
underwriting expenses
(other than
underwriting fees,
commissions or
discounts);
(iii)
expenses
of any
audits incident
to or
required
by any
such registration;
(iv)
fees
and
expenses
of complyin
g
with
securities and “blue sky”
laws (including, without limitation,
fees and disbursements of
counsel for the Company
in connection with
“blue sky” qualifications
or exemptions of
the Registrable Securities);
(v) printing expenses;
(vi) messenger,
telephone and delivery
expenses;
(vii)
fees
and
expenses
of
the
Company’s
counsel
and
independent
registered
public
accounting
firm;
(viii)
Financial
Industry Regulatory Authority,
Inc. filing fees (if any); and (ix)
reasonable and documented fees and
expenses of one counsel for the
17
Investors
participating
in
such
registration
as
a
group
(selected
by
the
Investors
holding
Registrable
Securities
included
in
the
registration).
In
addition,
the
Company
shall
be
responsible
for
all
of
its
internal
expenses
incurred
in
connection
with
the
consummation
of
the
transactions
contemplated
by
this
Agreement
(including,
without
limitation,
all
salaries
and
expenses
of
its
officers and employees performing legal or accounting duties) and the expense of any annual audits.
All Selling Expenses relating to
the offer and sale
of Registrable Securities registered
under the Securities Act
pursuant to this Agreement
shall be borne and
paid by
the holders of such Registrable Securities, in proportion to the number of Registrable
Securities included in such registration for each
such holder.
(d)
Indemnification.
(i)
The Company shall indemnify and
hold harmless, to the fullest extent
permitted by law,
each holder of Registrable
Securities, such holder’s officers, directors, managers, members, partners, stockholders and Affiliates, each
underwriter, broker or any
other Person acting on
behalf of such holder of
Registrable Securities and each
other Controlling Person, if
any, who
controls any of
the
foregoing
Persons,
against
all
losses,
claims,
actions,
damages,
liabilities
and
expenses,
joint
or
several,
to
which
any
of
the
foregoing
Persons
may
become
subject
under
the
Securities
Act
or
otherwise,
insofar
as
such
losses,
claims,
actions,
damages,
liabilities or
expenses arise
out of
or are
based upon
(A) any
untrue or
alleged untrue
statement of
a material
fact contained
in any
Registration Statement, Prospectus,
preliminary Prospectus, free
writing prospectus (as
defined in Rule
405 under the Securities
Act
or any successor rule thereto) or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact
required to be
stated therein or
necessary to make
the statements therein
(in the case
of a Prospectus,
preliminary Prospectus
or free
writing prospectus, in light of the circumstances under which
they were made) not misleading or (B) any violation
or alleged violation
by
the
Company
of
the
Securities
Act
or
any
other
similar
federal
or
state
securities
laws
or
any
rule
or
regulation
promulgated
thereunder
applicable
to
the
Company
and
relating
to
action
or
inaction
required
of
the
Company
in
connection
with
any
such
registration, qualification or compliance; and shall reimburse such Persons
for any reasonable and documented legal or
other expenses
incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar
as the same are
caused by or contained
in any information furnished
in writing to
the Company by
such holder expressly for
use therein
or by such holder’s failure to deliver a
copy of the Registration Statement, Prospectus, preliminary Prospectus, free writing
prospectus
(as defined in Rule 405 under the Securities Act or any successor rule thereto) or
any amendments or supplements thereto (if the same
was required by applicable law to be so delivered) after the Company has furnished
such holder with a sufficient number of copies of
the same prior to any written confirmation of the sale of Registrable Securities.
This indemnity shall be in addition to any liability the
Company may otherwise have.
(ii)
In connection
with any
registration in
which
a holder
of Registrable
Securities is
participating,
each such
holder
shall furnish
to the
Company in
writing such
information as
the Company
reasonably requests
for use
in connection
with any
such
Registration
Statement
or
Prospectus
and,
to
the
extent
permitted
by
law,
shall
indemnify
and
hold
harmless,
the
Company,
each
director of the Company,
each officer of the
Company who shall sign such
Registration Statement, each
underwriter, broker
or other
Person acting on behalf of
the holders of Registrable
Securities and each Controlling Person
who controls any of
the foregoing Persons
against any losses, claims,
actions, damages, liabilities
or expenses resulting
from any untrue or
alleged untrue statement of
material
fact contained in the
Registration Statement, Prospectus, preliminary Prospectus, free
writing prospectus (as defined
in Rule 405 under
the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission or alleged omission
of a
material fact
required to
be stated
therein or
necessary to
make the
statements therein
(in the
case of
a Prospectus,
preliminary
Prospectus or free writing prospectus,
in light of the
circumstances under which they were
made) not misleading, but only
to the extent
that
such
untrue
statement
or
omission
is
contained
in
any
information
so
furnished
in writing
by
such
holder;
provided,
that
the
obligation to indemnify shall be
several, not joint and several,
for each holder and shall
not exceed an amount equal
to the net proceeds
(after underwriting fees, commissions
or discounts) actually received
by such holder from the sale
of Registrable Securities pursuant
to such Registration Statement.
This indemnity shall be in addition to any liability the selling holder may otherwise have.
(iii)
Promptly
after
receipt
by
an indemnified
party
of
notice
of
the
commencement
of
any
action
involving
a
claim
referred to
in this Section
3.07(d), such
indemnified party
shall, if a
claim in respect
thereof is made
against an indemnifying
party,
give written notice to the latter
of the commencement of such action.
The failure of any indemnified party
to notify an indemnifying
party
of
any
such
action
shall
not
(unless
such
failure
shall
have
a
material
adverse
effect
on
the
indemnifying
party)
relieve
the
indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder.
In case any such
action is brought against
an indemnified party,
the indemnifying party shall
be entitled to participate
in and to assume the
defense of
the claims in any such action that are subject or potentially
subject to indemnification hereunder,
jointly with any other indemnifying
party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after written
notice from the indemnifying party
to such indemnified party of its election
so to assume the defense thereof,
the indemnifying party
shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense
thereof; provided that, if (A) any
indemnified party shall have reasonably
concluded that there may be one or more
legal or equitable
defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party,
or that
such claim or
litigation involves or
could have an
effect upon matters
beyond the scope
of the indemnity
provided hereunder,
or (B)
such action
seeks an
injunction or
equitable relief
against any
indemnified party
or involves
actual or
alleged criminal
activity,
the
indemnifying party
shall not
have the
right to
assume the
defense of
such action
on behalf
of such
indemnified party
without
such
indemnified
party’s
prior
written consent
(but,
without
such consent,
shall
have
the right
to
participate
therein
with
counsel
of its
choice) and such indemnifying party shall reimburse such indemnified party and
any Controlling Person of such indemnified party for
that
portion
of
the
fees
and
expenses
of
any
counsel
retained
by
the
indemnified
party
which
is
reasonably
related
to
the
matters
covered by
the indemnity
provided hereunder.
If the
indemnifying party
is not
entitled to,
or elects
not to,
assume the
defense of
a
18
claim, it shall not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by such
indemnifying
party with respect to such
claim, unless in the
reasonable judgment of
any indemnified party a conflict
of interest may exist
between
such
indemnified
party
and
any
other
of
such
indemnified
parties
with
respect
to
such
claim.
In
such
instance,
the
conflicting
indemnified parties shall have a
right to retain one separate counsel,
chosen by the holders of a majority
of the Registrable Securities
included in the registration, at the expense of the indemnifying
party.
An indemnifying party shall not be liable for any settlement
of
any action or
claim referred
to in
this Section 3.07(d)
effected without its
written consent, such
consent not to
be unreasonably
withheld,
conditioned or delayed.
(iv)
If the
indemnification provided
for hereunder
is held
by a
court of
competent jurisdiction
to be
unavailable to
an
indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party,
in lieu of
indemnifying such indemnified party hereunder,
shall contribute to the amounts paid or payable by such indemnified party as a result
of such loss, claim, damage,
liability or action in such
proportion as is appropriate to reflect
the relative fault of the
indemnifying party
on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such loss,
claim, damage, liability or
action as well as
any other relevant equitable
considerations; provided that the maximum
amount of liability
in respect
of such
contribution
shall be
limited,
in the
case of
each holder
of Registrable
Securities, to
an amount
equal to
the net
proceeds (after underwriting
fees, commissions or
discounts) actually received
by such seller
from the sale
of Registrable Securities
effected pursuant
to such registration.
The relative fault
of the indemnifying
party and of
the indemnified party
shall be determined
by
reference
to,
among
other
things,
whether
the
untrue
or
alleged
untrue
statement
of a
material
fact
or
the
omission
or
alleged
omission to
state a
material fact
relates to
information supplied
by the
indemnifying party
or by
the indemnified
party,
whether the
violation
of
the
Securities
Act
or
any
other
similar
federal
or
state
securities
laws
or
rule
or
regulation
promulgated
thereunder
applicable to the Company and
relating to action or inaction required
of the Company in connection with
any applicable registration,
qualification
or
compliance
was
perpetrated
by
the
indemnifying
party
or
the
indemnified
party
and
the
parties’
relative
intent,
knowledge, access
to information
and opportunity
to correct or
prevent such
statement or omission.
The parties agree
that it would
not be just
and equitable if contribution
pursuant hereto were
determined by pro
rata allocation or by
any other method or
allocation
which
does
not
take
account
of
the
equitable
considerations
referred
to
herein.
No
Person
guilty
or
liable
of
fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(e)
Participation
in
Underwritten
Registrations.
No
Person
may
participate
in
any
registration
hereunder
which
is
underwritten
unless such
Person (i)
agrees to
sell such
Person’s
securities on
the basis
provided
in any
underwriting
arrangements
approved by the Person or
Persons entitled hereunder to
approve such arrangements and (ii)
completes and executes all questionnaires,
powers
of
attorney,
indemnities,
underwriting
agreements
and
other
documents
required
under
the
terms
of
such
underwriting
arrangements; provided
that no
holder of
Registrable Securities
included in
any underwritten
registration shall
be required
to make
any representations or warranties
to the Company or
the underwriters (other than
representations and warranties regarding
such holder,
such
holder’s
ownership
of
its
shares
of
Registrable
Securities
to
be
sold
in
the
offering
and
such
holder’s
intended
method
of
distribution)
or
to
undertake
any
indemnification
obligations
to
the
Company
or
the
underwriters
with
respect
thereto,
except
as
otherwise provided in Section 3.07(d).
(f)
Rule 144 Compliance.
With a view to making available to the Investors the benefits of Rule 144 and any other rule
or regulation of the SEC
that may at any time permit
a holder to sell securities of
the Company to the public
without registration, the
Company shall:
(i)
make and keep public information available, as those terms are understood and defined in Rule 144, at
all times after the
date hereof;
(ii)
use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of
the Company under the Exchange Act; and
(iii) furnish
to
any
Investor
so
long
as
it
owns
Registrable
Securities,
promptly
upon
request,
a
written
statement
by
the
Company as
to its
compliance with
the reporting
requirements of
Rule 144
and the
Exchange Act,
a copy
of the
most
recent
annual or
quarterly
report of
the Company,
and such
other reports
and documents
so filed
or furnished
by the
Company
as
such
Investor
may
reasonably
request
in
connection
with
the
sale
of
Registrable
Securities
without
registration.
(g)
Lock-up Agreement.
Each Investor
agrees that
in connection
with any
registered offering
of Equity
Securities of
the Company,
and upon
the request
of the
managing underwriter
in such
offering, such
Investor shall
not, without
the prior
written
consent of such managing underwriter, during the period commencing on the effective date
of such registration and ending on the
date
specified by such managing underwriter (such period not to exceed
ninety (90) days), (i) offer,
pledge, sell, contract to sell, grant any
option
or contract
to purchase,
purchase
any option
or contract
to sell,
hedge
the beneficial
ownership
of or
otherwise dispose
of,
directly or
indirectly,
any shares
of Common
Stock or
any securities
convertible into,
exercisable for
or exchangeable
for shares
of
Common
Stock held immediately before
the effectiveness of the
Registration Statement for such
offering, or (ii) enter
into any swap
or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of such securities,
whether any such transaction described in
clause (i) or (ii) above
is to be settled
by delivery of Common Stock or
such other securities,
in cash or otherwise, provided, however, that the foregoing shall not prevent any Investor from exercising the Put Option with respect
to its Investor Shares.
The foregoing provisions of this Section 3.07(g) shall
not apply to sales of Registrable Securities
to be included
19
in such offering pursuant
to Section 3.07(a), and shall
be applicable to the Investors
only if all officers and
directors of the Company
and
all
stockholders
owning
more
than
five
percent
(5%)
of
the
Company’s
outstanding
Common
Stock
are
subject
to
the
same
restrictions.
Each Investor agrees
to execute and
deliver such other
agreements as may
be reasonably requested
by the Company
or
the
managing
underwriter
which
are
consistent
with
the
foregoing
or
which
are
necessary
to
give
further
effect
thereto.
Notwithstanding anything to the contrary contained in this Section 3.07(g),
each Investor shall be released, pro rata, from any lock-up
agreement entered into
pursuant to this Section
3.07(g) in the event
and to the extent
that the managing underwriter
or the Company
permit any discretionary waiver or termination of
the restrictions of any lock-up
agreement pertaining to any officer, director or holder
of greater than five percent (5%) of the outstanding Common Stock.
(h)
Preservation of Rights.
The Company shall not (i) grant any demand or “piggyback” registration rights to any third
party without also granting the
same rights to each Investor
or (ii) enter into any
agreement, take any action, or
permit any change to
occur, with respect to its securities that violates or
subordinates the rights expressly granted to the Investors in this Agreement.
Section 3.08.
Further Assurances
.
The Company shall
exercise all such
rights and powers
as are available
to it to
take, or
cause to be taken, such actions, and do, perform, execute and deliver, or cause to be done, performed, executed and delivered, all acts,
deeds and documents necessary,
proper or advisable to ensure compliance with
and to fully and effectually
implement the provisions
of
this
Agreement,
including
making,
or
causing
to
be
made,
all
governmental,
regulatory
and
administrative
filings
with
any
appropriate Authority,
as promptly as reasonably possible.
ARTICLE
IV
The Put Option
Section 4.01.
The Put Option
.
(a)
The Company hereby grants to each Investor an option (the “
Put Option
”) to sell to the Company on one occasion,
and the Company
is obligated to purchase
from each Investor
upon exercise of each
such option, all of
such Investor’s Put
Shares in
accordance with the terms of this Article IV.
(b)
The Put Option may be exercised by each Investor by delivery to the Company of
a Put Notice at any time within
(i) in the
case of a
Put Trigger
Event, ninety (90)
days following the
earlier of (x)
receipt by the
Investors of written
notice
from the
Company that
a Put
Trigger
Event has
occurred or
(y) written
notice given
to the
Company by
the Investors
that a Put Trigger Event has occurred;
(ii) in the case of a Plan Put Trigger Event, thirty
(30) days following the Company’s
receipt of a Bona Fide Offer, provided
that any
increase in
such the
price offered
in such
Bona Fide
Offer,
or any
Bona Fide
Offer
by another
Person, shall
trigger a new thirty (30) day period; and
(iii) in
the case
of a
Threshold Put
Trigger
Event, ninety
(90) days
following
the earlier
of (x)
receipt by
the Investors
of
written
notice
from
the
Company
that
a
Threshold
Put
Trigger
Event
has
occurred
or
(y) written
notice
given
to
the
Company by the Investors that a Threshold Put Trigger
Event has occurred.
The Put Notice
shall specify the
Put Price for
the Put Shares
(and the basis
for its determination
of the Put
Price), the bank
account into which the Put
Price shall be paid, the
nature of the relevant Put
Trigger Event, if applicable, and the applicable
Settlement
Date.
The failure of any Investor to exercise the Put Option following (i) the occurrence of a Put Trigger Event shall not preclude
the
subsequent exercise of
the Put Option if
a subsequent Put Trigger
Event occurs, (ii) the
occurrence of a Plan
Put Trigger Event
shall
not
preclude
the
subsequent
exercise
of
the
Put
Option
if
a
subsequent
Bona
Fide
Offer
is
received
and
(iii)
the
occurrence
of
a
Threshold Put Trigger Event shall not preclude the subsequent exercise of the Put Option if a new Shareholder Rights Plan is adopted
that constitutes a Threshold Put Trigger Event.
(c)
On the Settlement Date:
(i)
the Company
shall pay
to each Investor,
into the
bank account
specified by
such Investor,
the Put
Price set
out in
the
Put
Notice
in
Dollars
in
immediately
available
funds,
without
deduction
whatsoever
for
any
fees,
Taxes
(excluding for
the avoidance
of doubt
Taxes
on any
gains realized
by any
Investor), duties,
costs or
other charges
howsoever called (all of which shall be borne by the Company); and
(ii)
such Investor shall, simultaneously with receipt of the Put Price, transfer to the Company free of all Liens and other
encumbrances
and
rights
of
third
parties
the
certificates,
if
any,
or
book-entry
shares
evidencing
title
to
the
Put
Shares
together
with
such
instruments
of
transfer,
if
any,
as
required
by
Applicable
Law
(“
Settlement
Completion
”).
In the event
the Company is
prohibited by Applicable
Law from repurchasing,
or otherwise does
not have sufficient cash
to repurchase,
all the Put Shares, as reasonably
determined by the Board in good
faith and certified to such Investor
by the Chairman, the Company
shall repurchase as many Put Shares as it can for cash (pro rata among the Investors exercising the Put Option based on the number of
20
Put Shares
specified in
their Put
Notices).
With
respect to
the Put
Shares that
the Company
is unable
to purchase
pursuant
to the
preceding sentence, each
Investor shall have the
option to either retain
the unrepurchased Put Shares
or receive a promissory
note in
the principal
amount equal
to the
Put Price
for the
unrepurchased Put
Shares, bearing
interest at
the rate
of ten
percent (10%)
per
annum (with
quarterly interest
payments), payable
in eight
(8) equal
quarterly installments
with a
final maturity
date two
(2) years
from the date of issuance, and otherwise in form and substance reasonably
acceptable to such Investor.
(d)
For the avoidance of doubt, each
Investor shall be entitled to
any dividends, distributions or return of capital
relating
to the Put Shares which are the subject of the relevant Put Notice which were declared or otherwise had a record date on or before the
Settlement Completion, even if the payment
date is after the
Settlement Completion.
Until Settlement Completion, each Investor shall
be
entitled to
all of
its rights
as a
stockholder
(or
attached to
such Put
Shares) whether
under
this Agreement,
Applicable
Law or
otherwise.
(e)
After delivery of a Put Notice to
the Company but prior to Settlement Completion, each
Investor shall have the right
(but not the obligation) in its sole discretion to withdraw the Put Notice and its
exercise of the Put Option thereunder by written notice
to the Company at any time or times.
(f)
The calculation by each Investor
of the Put Price
or Put Price Per
Share as set forth
in the Put Notice
shall be binding
and conclusive for all purposes, absent manifest error.
(g)
The Company shall notify the Investors promptly, and in any case no later than one (1) Business Day, following the
occurrence
of
a
Plan
Put
Trigger
Event,
Put
Trigger
Event
or
Threshold
Put
Trigger
Event,
setting
forth
in
reasonable
detail
the
circumstances giving rise to such Plan Put Trigger
Event, Put Trigger Event or Threshold Put Trigger
Event.
Section 4.02.
Failure to Perform by
the Company
.
Without prejudice
to the remedies available to
each Investor under this
Agreement or otherwise,
if the Company
fails to make
payment of the
Put Price by
the Settlement Date
as specified pursuant
to this
Article
IV,
then
the
Company
shall
pay
to
each
Investor having
delivered
a
Put
Notice, in
Dollars
on
demand,
at
a bank
account
designated by such Investor, a late payment charge which will accrue at a rate per annum of ten percent
(10%) on the amount required
to be paid to
such Investor pursuant to Section
4.01(c)(i), such late payment charge to accrue
daily from (and including) the
Settlement
Date until (but
excluding) the date
the Put Price
is paid in
full prorated on
the basis of
a 360-day year
for the actual
number of days
elapsed.
In the
case of
a failure
to perform by
the Company, Settlement Completion
shall be
deemed to occur
for all
purposes hereunder
(including, but
not limited
to, Section
4.01(d) above)
on the
date such
Investor effectively
transfers the
Put Shares
to the
Company
after receipt of
the Put Price and
any additional amounts
payable by the Company
pursuant to this
Section 4.02 and
otherwise under
this Agreement.
Section
4.03.
Obligations
Irrevocable
.
The
obligations
of
the
Company
hereunder
are
irrevocable
and
shall
not
be
terminated, suspended or affected
in any manner by the deterioration
of the financial situation or the interruption
of the operations of
the Company (whether by
condemnation, expropriation, nationalization
or otherwise) or the insolvency
of the Company or the
filing
of any bankruptcy proceeding or any similar proceeding by or against the
Company or any other circumstances whatsoever.
ARTICLE V
Term
of Agreement
Section 5.01.
Term
of Agreement
.
Except as otherwise expressly set forth
herein, this Agreement shall become
effective as
of the date on which the Investors first subscribe for the Investor Shares and shall continue in force until such time as the Investors no
longer hold
any Investor Shares
(or any promissory
note issued to
pay all or
a portion of
the Put Price);
provided,
however, that
the
termination of this
Agreement or cessation of
effectiveness with respect
to a party shall
be without prejudice to
such party’s
accrued
rights and obligations
at the date
of its termination
and any legal
or equitable remedies
of any kind
which may accrue
in connection
therewith.
ARTICLE VI
Representations and Warranties
Section 6.01.
Representations
and
Warranties
.
The Company
hereby
represents and
warrants that
each of
the following
statements is true, accurate and not misleading as of the date of this Agreement:
(a)
Organization
and Authority.
The Company
is a corporation duly organized and validly existing under the
laws of its place of
incorporation and has the corporate power and authority to enter into, deliver and
perform its obligations
under this
Agreement;
(b)
Validity.
This Agreement has been duly authorized and executed by the Company and constitutes its valid
and legally binding
obligation, enforceable in
accordance with its
terms, except as
the same may
be limited by
bankruptcy,
insolvency,
reorganization,
moratorium
or other
similar
laws affecting
the
rights
and
remedies
of
creditors
generally
and
general principles of equity;
21
(c)
No Conflict
.
The execution, delivery and performance
of this Agreement will not contravene: (i) any law,
regulation, order,
decree or
Authorization applicable
to the
Company or
any of
its Subsidiaries;
(ii) any
provision of
the Company’s
or any
Subsidiary’s Charter;
or (iii)
any contractual
restriction binding
on or
affecting the
Company or
any of
the Company’s
assets (including its Subsidiaries); and
(d)
Status of Authorizations.
All Authorizations required for the execution and
delivery of this Agreement and
the performance of its
obligations hereunder have been obtained
and are in full
force and effect, other than
the filings required
to be made pursuant to Section 3.07.
Section 6.02.
Investors Reliance
.
The Company acknowledges that it has
made the representations and warranties in
Section
6.01 (
Representations and Warranties
), with the intention of inducing each Investor to enter into this Agreement and the Subscription
Agreement
and
to
make
its
Investors
Subscription
and
that
each
Investor
has
entered
into
this
Agreement
and
the
Subscription
Agreement and made its Investors Subscription on the basis of and in full reliance
on such representations and warranties.
ARTICLE VII
Miscellaneous
Section 7.01.
Notices
.
(a)
Any notice, request or other communication to be given
or made under this Agreement shall be in writing.
Subject
to Section 7.04
(
Applicable Law and Jurisdiction
), any such communication to the Company shall be delivered by email and any
such
communication by any
other party shall be
delivered by hand,
established courier service
or email (and facsimile
in the case of
IFC)
to the party to which it is required or permitted to be given or made at such party’s address specified below or at such other address as
such party has from time
to time designated by written
notice to the other parties
hereto, and shall be effective
upon the earlier of (a)
actual receipt and (b) deemed receipt under Section 7.01(b) below.
For the Company:
Lesaka Technologies,
Inc.
President Place, 4
th
Floor,
Cnr. Jan Smuts Avenue
and Bolton Road
Rosebank, Johannesburg 2196, South Africa
Attention:
Mr. Ali Mazanderani,
Executive Chair
Telephone:
Email:
XXX
For IFC:
International Finance Corporation
2121 Pennsylvania Avenue,
N.W.
Washington,
D.C.
20433
United States of America
Attention:
Director, TMT,
Venture
Capital & Funds
Facsimile:
XXX
Email:
XXX
With a copy
(in the
case of
communications relating to
payments) sent
to the
attention of
the Director, Department of
Financial
Operations at:
Facsimile:
+XXX
For ALAC:
IFC African, Latin American and Caribbean Fund, LP
2121 Pennsylvania Avenue,
N.W.
Washington,
D.C. 20433
United States of America
Attention:
Head, IFC African, Latin American and Caribbean Fund, LP
Email:
XXX
22
For FIG:
IFC Financial Institutions Growth Fund, LP
2121 Pennsylvania Avenue,
N.W.
Washington,
D.C. 20433
United States of America
Attention:
Head, IFC Financial Institutions Growth Fund, LP
Email:
XXX
(b)
Unless there
is reasonable
evidence that
it was received
at a
different time,
notice pursuant
to this
Section 7.01
is
deemed given if: (i) delivered by hand, when left
at the address referred to in Section 7.01(a); (ii) sent
by established courier services
within
a
country,
three
(3)
Business
Days
after
posting
it;
(iii)
sent
by
established
courier
service
between
two
countries,
six
(6)
Business Days
after posting
it; and
(iv) sent
by email,
when receipt
has been
confirmed by
telephone and
a copy
has been
sent by
established courier service; provided that
in the case
of IFC, any
notice sent by email
shall also be sent
by facsimile and will
be deemed
given when confirmation of its transmission has been recorded by the sender’s
facsimile machine.
Section 7.02.
Saving of Rights
.
(a)
The rights and remedies of the Investors in relation to
any misrepresentation or breach of warranty on the part of
the
Company shall not be
prejudiced by any investigation
by or on
behalf of the Investors
into the affairs of
the Company, by the execution
or the performance of
this Agreement or by any
other act or thing by
or on behalf of the
Investors which might prejudice
such rights
or remedies.
(b)
No course of dealing and no failure or delay by the Investors in exercising any power, remedy,
discretion, authority
or other right under this Agreement or any other
agreement shall impair, or be construed
to be a waiver of or an acquiescence in, that
or any
other power,
remedy,
discretion, authority
or right
under this
Agreement, or
in any
manner preclude
its additional
or future
exercise.
Section 7.03.
English Language
.
All documents to
be provided or
communications to be
given or made
under this Agreement
shall be in
English and, where
the original version
of any such
document or communication
is not in
English, shall be
accompanied
by an English
translation certified by
an Authorized Representative
to be a true
and correct translation
of the original.
Any Investor
may, if it so requires, obtain
an English translation of any document or communication received in any other
language at the cost and
expense of the Company (except
for documents or communications provided
by any Investor).
The Investors and the Company may
deem any such translation to be the governing version.
Section 7.04.
Applicable Law and Jurisdiction
.
(a)
This Agreement shall be
governed by and construed
in accordance with the laws
of the State of
New York,
United
States of America,
without giving effect
to principles or
rules of conflict
of laws to the
extent such principles
or rules would
require
or permit the application of the laws of another jurisdiction.
(b)
Each of the Company and each
Investor irrevocably agrees to venue being
laid in the courts of the United
States of
America located in the Southern District of New York or in the courts of the State of New York
located in the Borough of Manhattan,
in any legal
action, suit or
proceeding arising out
of or relating
to this Agreement,
and waives any
objections to venue
based on grounds
of forum non conveniens or inconvenient forum.
Nothing contained herein shall be construed as a waiver of the
right of the Company
or any Investor to seek removal to federal court in any action brought hereunder.
(c)
Final judgment against the Company in any such action, suit
or proceeding shall be conclusive and may be enforced
in any other
jurisdiction by suit
on the judgment,
a certified or
exemplified copy of which
shall be conclusive
evidence of the
judgment,
or in any other
manner provided by law,
and the Company
irrevocably also submits
to personal jurisdiction
of any such court
in any
such action, suit or proceeding to enforce any judgment.
(d)
The
parties
acknowledge
and
agree
that
no
provision
of
this
Agreement,
nor
the
consent
to
venue
by
IFC
in
subsection (b), in any
way constitutes or implies
a waiver, termination or modification
by IFC of
any privilege, immunity or
exemption
of IFC granted in the Articles of Agreement establishing IFC, international conventions,
or Applicable Law.
(e)
The Company
hereby irrevocably
designates, appoints
and empowers
Corporation Service
Company with
offices
currently located at
1180 Avenue
of the Americas,
Suite 210, New
York,
New York
10036, as its
authorized agent solely
to receive
for and
on its
behalf service
of any
summons, complaint
or other
legal process
in any
action, suit
or proceeding
the Investors
may
bring in the State of New York
in respect of this Agreement.
(f)
As long as this
Agreement remains in
force, the Company
shall maintain a
duly appointed and
authorized agent to
receive for and on its
behalf service of any
summons, complaint or other
legal process in any action,
suit or proceeding the Investors
may bring in New York, New York,
United States of America, with respect to this
Agreement.
The Company shall keep the Investors
advised of the identity and location of such agent.
23
(g)
The Company
also irrevocably
consents to
the service of
such papers
being made
by mailing
copies of the
papers
by to the
Company at its address
and in the
manner specified in
Section 7.01 (
Notices
).
In such a case,
the Investors shall
also send
by email, or have sent by email, a copy of the papers to the Company.
(h)
Service
in the
manner
provided in
Sections 7.04(e)
,
(f) and
(g)
in any
action,
suit or
proceeding
will be
deemed
personal service,
will be accepted
by the Company
as such and
will be valid
and binding upon
the Company for
all purposes of
any
such action, suit or proceeding.
(i)
THE
COMPANY
IRREVOCABLY
WAIVES
TO
THE
FULLEST
EXTENT
PERMITTED
BY
APPLICABLE
LAW
ANY
AND
ALL
RIGHTS
TO
DEMAND
A
TRIAL
BY
JURY
IN
ANY
SUCH
ACTION,
SUIT
OR
PROCEEDING
BROUGHT AGAINST THE COMPANY
BY ANY INVESTOR.
(j)
The Company
hereby acknowledges
that IFC
shall be
entitled under
Applicable Law,
including the
provisions of
the International
Organizations Immunities
Act, to
immunity from
a trial
by jury
in any
action, suit
or proceeding
arising out
of or
relating to this Agreement or
the transactions contemplated hereby brought
against IFC in any court of the
United States of America.
The Company hereby waives any
and all rights to demand a trial by
jury in any action, suit or proceeding
arising out of or relating to
this Agreement or the transactions contemplated
by this Agreement, brought against IFC
in any forum in which IFC is not
entitled to
immunity from a trial by jury.
(k)
To
the extent
that the
Company may,
in any
action, suit
or proceeding
brought in
any of
the courts
referred to
in
Section 7.04(b) or in any other court or elsewhere arising out of or in connection with this
Agreement, be entitled to the benefit of any
provision of
law requiring
any Investor
in such action,
suit or proceeding
to post security
for the costs
of the Company,
or to
post a
bond or
to take similar
action, the
Company hereby
irrevocably waives
such benefit,
in each case
to the fullest
extent now
or in
the
future permitted under Applicable Law or,
as the case may be, the jurisdiction in which such court is located.
(l)
Nothing in this Agreement shall affect the right of any Investor to (i) commence legal proceedings or otherwise sue
the Company
in South
Africa, the
U.S. federal
courts sitting
in the
State of
Florida or
the state courts
of the
State of
Florida, or
(ii)
commence legal proceedings
to enforce any judgment
against the Company
in any appropriate jurisdiction
or (iii), and in
either case
to serve process, pleadings and other legal papers upon the Company
in any manner authorized by the laws of any such jurisdiction.
Section
7.05.
Immunity
.
To
the
extent
the
Company
may
be
entitled
in
any
jurisdiction
to
claim
for
itself
or
its
assets
immunity
in
respect
of
its
obligations
under
this
Agreement
or
the
Subscription
Agreement
from
any
suit,
execution,
attachment
(whether provisional
or final,
in aid
of execution,
before judgment
or otherwise)
or other
legal process
or to
the extent
that in
any
jurisdiction that immunity (whether
or not claimed) may be attributed
to it or its assets, the Company
irrevocably agrees not to
claim
and irrevocably waives such immunity to the fullest extent permitted now
or in the future by the laws of such jurisdiction.
Section 7.06.
Announcements / Confidentiality
.
(a)
The Company
may not
represent any
Investor’s
views on
any matter,
or,
except to
the extent
required by
law or
regulation (including, but
not limited
to, SEC,
Nasdaq and JSE
Limited rules), use
any Investor’s name
in any written
material provided
to third parties, without such Investor’s prior written consent.
(b)
The Company shall not:
(i)
disclose any information either in writing or orally to any Person which is not
a party to this Agreement; or
(ii)
make or issue a public announcement, communication or circular,
about
the
Investors
Subscription
or
the
subject
matter
of,
or
the
transactions
referred
to
in,
this
Agreement
or
the
Subscription
Agreement, including
by way
of press
release, promotional
and publicity
materials, posting
of information
on websites,
granting of
interviews or
other communications
with the
press, or
otherwise, other
than: (A)
to such
of its
officers,
employees and
advisers as
reasonably require such
information in connection
with the Investors
Subscription or to
comply with the
terms of this Agreement
or
the Subscription
Agreement; (B) to
the extent required
by law or
regulation (including
SEC, Nasdaq and
JSE Limited
rules); (C)
to
the extent required
for it to
enforce its rights
under this Agreement;
and (D) with
the prior written
consent of each
Investor.
Before
any
information
is
disclosed
or
any
public
announcement,
communication
or
circulation
made
or
issued
pursuant
to
this
Section
7.06(b),
the
Company
must
consult
with
each
Investor
in
advance
about
the
timing,
manner
and
content
of
the
disclosure,
announcement, communication or circulation (as the case may be).
(c)
Each Investor shall hold any Confidential Information it receives from the Company in confidence, and (for so long
as it
remains
Confidential
Information)
shall
not
without
the consent
of
the
Company
reveal
any
Confidential
Information
to
any
Person
other
than
such
Investor’s
directors,
officers,
employees,
attorneys,
independent
registered
public
accounting
firm,
rating
agencies,
contractors
and
consultants
(including,
without
limitation,
technical
and
financial
advisors)
who
need
to
know
such
information in connection with the performance of their duties for such Investor.
The Investors agree that money damages would not
be a sufficient
remedy for any breach
of the confidentiality
obligation contained herein
and that the Company
shall have the right
to
seek equitable relief,
including injunction and specific
performance, as a remedy
for any such breach or
threat thereof, subject to
the
24
privileges and immunities contained
in IFC’s Articles
of Agreement, international
treaties and Applicable Law.
Such remedies shall
not be deemed to
be the exclusive remedies
for a breach of
such confidentiality provisions and shall
be in addition to
all other remedies
available at law or in equity to the Company.
Section 7.07.
Successors and
Assigns
.
This Agreement
binds and
benefits the
respective successors
and assignees
of the
parties.
However, (i) the
Company may not assign, transfer or
delegate any of its rights or obligations
under this Agreement without
the prior
written consent
of each
Investor and
(ii) no
Investor may
assign, transfer
or delegate
any of
its rights
or obligations
under
this Agreement other than to (x) one of the other Investors, (y) an Affiliate of such Investor or (z) any Person (other than those in sub-
clauses (x) and (y)) without the prior written consent of the Company.
Section 7.08.
Amendments, Waivers and Consents
.
Any amendment or waiver of, or any consent
given under, any provision
of this Agreement shall be in writing and, in the case of an amendment, signed
by all of the parties hereto.
Section 7.09.
Counterparts
.
This Agreement may
be executed in
several counterparts, each
of which is
an original, but all
of which constitute one and the same agreement.
Section 7.10.
Costs, Expenses and Third Party
Claims
.
The Company shall (a) pay to the Investors
or as the Investors may
direct the reasonable and documented costs and expenses incurred by
any Investor in relation to efforts to enforce or protect its rights
under this Agreement, or the
exercise of its rights
or powers consequent upon or
arising out of any
breach of this Agreement, including
reasonable and documented
legal and other
professional consultants’ fees,
if the Investors
are successful in
whole or in
part, and (b)
shall indemnify, defend and hold harmless each
Investor and its
Affiliates from, against and in
respect of any damages,
losses, charges,
liabilities,
claims,
payments,
judgments,
settlements,
assessments,
and
costs
and
expenses
(including
attorneys’
fees,
charges
and
disbursements)
imposed
on,
sustained,
incurred
or suffered
by,
or asserted
against
such Investor
or
its Affiliates
arising
out of,
in
connection with,
or related
to any
actual or
prospective third
party claim,
litigation, investigation
or proceeding
relating to
(x) any
breach by the Company of
any of its obligations under
the Transaction Documents or
(y) the gross negligence,
willful misconduct or
fraudulent acts of the Company or its directors, officers or employees
in connection with any transaction contemplated thereby.
Section 7.11.
Entire Agreement
.
This Agreement, together
with the
Subscription Agreement, supersedes
all prior
discussions,
memoranda of
understanding, agreements
and arrangements
(whether written
or oral,
including all
correspondence and
that certain
Confidentiality
Agreement
between
the
parties
dated
September
24,
2015),
if
any,
between
the
parties
with
respect
to
the
subject
matter of this Agreement, and this Agreement (together with any
amendments or modifications and the other Transaction Documents)
contains
the
sole
and
entire
agreement
between
the
parties
with
respect
to
the
subject
matter
of
this
Agreement
and
the
other
Transaction Documents.
This Agreement restates
and replaces, in
its entirety,
the Original Policy
Agreement; and any
references in
any of the other Transaction Documents
to the Original Policy Agreement shall mean this Agreement.
Section 7.12.
Invalid Provisions
. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any
law from time to time: (a) such provision will be fully severable; (b) this Agreement will be construed
and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof; and (c) the remaining provisions of this Agreement will remain
in full force and effect and will not be affected
by the illegal, invalid or unenforceable provision or by its severance
herefrom so long
as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the
subject
matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair
the
respective
expectations
or
reciprocal
obligations
of
the
parties
or
the
practical
realization
of
the
benefits
that
would
otherwise
be
conferred upon
the parties.
The parties
will endeavor
in good
faith negotiations
to replace
the prohibited,
invalid or
unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable
provision(s).
(
Signature Pages Follow)
25
IN WITNESS WHEREOF,
the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be
signed in their respective names as of the date first written above.
LESAKA TECHNOLOGIES, INC.
By:
/s/
Ali
Mazanderani__________
Name:
Ali
Mazanderani
Title: Executive Chair
INTERNATIONAL
FINANCE CORPORATION
By:
/s/
Andi
Dervishi__________________________
Name:
Andi
Dervishi
Title: Global Head, Fintech Investments
IFC AFRICAN, LATIN
AMERICAN AND CARIBBEAN FUND, LP
By:
IFC
African,
Latin
American
and
Caribbean
Fund
(GP)
LLC,
its general partner
By:
/s/
Selena
Baxa__________________________
Name:
Selena
Baxa
Title: Authorized Signatory
IFC FINANCIAL INSTITUTIONS GROWTH FUND, LP
By: IFC FIG Fund (GP), LLP,
its general partner
By:
/s/
Jun
Nitta______________________
Name:
Jun
Nitta
Title: Authorized Signatory
26
1
ANNEX A
ANTI-CORRUPTION
GUIDELINES
FOR
IFC TRANSACTIONS
The purpose of these Guidelines is to clarify the meaning of the terms “Corrupt Practice”, “Fraudulent Practice”, “Coercive Practice”,
“Collusive Practice” and “Obstructive Practice” in the context of the Investors’
operations.
1.
C
ORRUPT
P
RACTICES
A “Corrupt Practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly
the actions of another party.
I
NTERPRETATION
A.
Corrupt Practices are
understood as
kickbacks and bribery.
The conduct in
question must involve
the use
of improper
means (such as bribery) to violate or derogate a duty owed by the recipient in order for the payor to obtain an undue
advantage or to
avoid an obligation.
Antitrust, securities
and other violations
of law that
are not of
this nature are
excluded from the definition of Corrupt Practices.
B.
It is acknowledged that foreign investment agreements, concessions
and other types of contracts commonly require
investors to make
contributions for bona
fide social development
purposes or to
provide funding for
infrastructure
unrelated to the project.
Similarly, investors are often required or expected to make contributions to bona fide local
charities.
These practices are not viewed
as Corrupt Practices for purposes
of these definitions, so long
as they are
permitted under
local law
and fully disclosed
in the
payor’s books
and records.
Similarly,
an investor
will not be
held liable
for corrupt
or fraudulent
practices committed
by entities
that administer
bona fide
social development
funds or charitable contributions.
C.
In the context of conduct
between private parties, the offering, giving,
receiving or soliciting of corporate hospitality
and
gifts
that
are customary
by
internationally-accepted
industry
standards
shall
not
constitute
Corrupt
Practices
unless the action violates Applicable Law.
D.
Payment by
private sector
persons of
the reasonable
travel and
entertainment expenses
of public
officials that
are
consistent
with
existing
practice
under relevant
law
and
international
conventions
will not
be viewed
as Corrupt
Practices.
E.
The
World
Bank
Group
does
not
condone
facilitation
payments.
For
the
purposes
of
implementation,
the
interpretation
of
“Corrupt
Practices”
relating
to
facilitation
payments
will
take
into
account
relevant
law
and
international conventions pertaining to corruption.
2.
F
RAUDULENT
P
RACTICES
A “Fraudulent Practice” is any action or omission, including a misrepresentation that knowingly or recklessly misleads, or attempts to
mislead, a party to obtain a financial or other benefit or to avoid an obligation.
I
NTERPRETATION
A.
An action, omission, or
misrepresentation will be regarded
as made recklessly if
it is made
with reckless indifference
as to whether it is true or
false.
Mere inaccuracy in such information,
committed through simple negligence, is
not
enough to constitute a “Fraudulent Practice” for purposes of this Agreement.
B.
Fraudulent Practices are intended
to cover actions or omissions
that are directed to
or against a World
Bank Group
entity.
It also covers Fraudulent Practices directed
to or against a World Bank Group member country
in connection
with the award or implementation
of a government contract or
concession in a project financed
by the World
Bank
Group.
Frauds
on
other
third
parties
are
not
condoned
but
are
not
specifically
sanctioned
in
IFC,
Multilateral
Investment
Guarantee
Agency,
or
Partial
Risk
Guarantee
operations.
Similarly,
other
illegal
behavior
is
not
condoned, but will not be considered as a Fraudulent Practice for purposes of this Agreement.
3.
C
OERCIVE
P
RACTICES
A “Coercive Practice” is impairing or harming, or threatening to impair or
harm, directly or indirectly, any party or the property of the
party to influence improperly the actions of a party.
1
The “World
Bank” is the International
Bank for Reconstruction and
Development, an international organization
established
by Articles of
Agreement among its
member countries and
the “World Bank Group” refers
to the
International Bank for
Reconstruction
and
Development,
the
International
Development
Association,
the
International
Finance
Corporation,
the
Multilateral
Investment
Guarantee Agency,
and the International Centre for Settlement of Investment Disputes.
27
I
NTERPRETATION
A.
Coercive Practices
are actions undertaken
for the purpose
of bid rigging
or in connection
with public procurement
or government contracting or in furtherance of a Corrupt Practice or a Fraudulent
Practice.
B.
Coercive Practices are threatened or actual illegal actions such as personal injury or abduction, damage
to property,
or injury to legally recognizable
interests, in order to obtain an
undue advantage or to avoid an
obligation.
It is not
intended to cover hard bargaining, the exercise of legal or contractual
remedies or litigation.
4.
C
OLLUSIVE
P
RACTICES
A “Collusive Practice” is
an arrangement between two or
more parties designed to
achieve an improper purpose,
including to influence
improperly the actions of another party.
I
NTERPRETATION
Collusive
Practices
are
actions
undertaken
for
the
purpose
of
bid
rigging
or
in
connection
with
public
procurement
or
government contracting or in furtherance of a Corrupt Practice or a Fraudulent
Practice.
5.
O
BSTRUCTIVE
P
RACTICES
An
“Obstructive
Practice”
is
(i)
deliberately
destroying,
falsifying,
altering
or
concealing
of
evidence
material
to
the
investigation
or making
of false
statements
to
investigators,
in
order to
materially
impede a
World
Bank
Group investigation
into
allegations
of
a
Corrupt
Practice,
Fraudulent
Practice,
Coercive
Practice
or
Collusive
Practice,
and/or
threatening,
harassing
or
intimidating
any
party
to
prevent
it
from
disclosing
its
knowledge
of
matters
relevant
to
the
investigation
or
from
pursuing
the
investigation,
or
(ii)
an
act
intended
to
materially
impede
the
exercise
of
IFC’s
access
to
contractually
required
information
in
connection with
a World
Bank Group
investigation into
allegations of
a Corrupt
Practice, Fraudulent
Practice, Coercive
Practice or
Collusive Practice.
I
NTERPRETATION
Any action legally or otherwise properly taken by a party to maintain or preserve its regulatory,
legal or constitutional rights
such as the attorney-client
privilege, regardless of whether
such action had the effect
of impeding an investigation, does
not
constitute an Obstructive Practice.
G
ENERAL
I
NTERPRETATION
A person should
not be liable for
actions taken by
unrelated third parties
unless the first party
participated in the
prohibited
act in question.
28
ANNEX B
FORM OF ANNUAL MONITORING REPORT
I
NTERNATIONAL
F
INANCE
C
ORPORATION
●
ENVIRONMENTAL AND
SOCIAL PERFORMANCE
ANNUAL MONITORING REPORT (AMR)
South Africa
Lesaka Technologies,
Inc.
37402
R
EPORTING
P
ERIOD
:
(month/year) through (month/year)
AMR COMPLETION DATE
:
(day/month/year)
Environment and Social Development Department
2121 Pennsylvania Avenue,
NW
Washington,
DC 20433 USA
www.ifc.org/enviro
29
●
INTRODUCTION
The Annual Monitoring Report
The Investors’ Policy Agreement
requires the Company to
prepare a comprehensive Annual
Monitoring Report (AMR) for
all of the
Company’s
relevant
facilities
and
operations.
This
document
comprises
the
Investors’
and
the
Company’s
agreed
format
for
environmental and social performance reporting.
The AMR informs the Investors’ Environment and
Social Development Department
about the environmental and social state of the investment.
●
Preparation Instructions
The
following
points
should
assist
you
in
completing
this
form.
Please
be
descriptive
in
your
responses
and
attach
additional
information as needed.
●
The Investors’ Policy Agreement requires the Company to complete and submit annual environmental and social monitoring
reports in compliance with the schedule stipulated in the Policy Agreement.
●
The Company must collect
relevant information in all
of its relevant
operations, and report qualitative
and quantitative project
performance data each year of the Investors’ investment for the environmental
and social monitoring parameters included in
this report format.
●
The main purpose of completing this form is to provide the following information:
1.
Environmental and Social Management
2.
Occupational Health and Safety (OHS) Performance
3.
Significant Environmental and Social Events
4.
General Information and Feedback
5.
Sustainability of Project and Associated Operations
6.
Compliance with World
Bank Group and local environmental requirements as specified in the Investment
Agreement
7.
Compliance with World
Bank Group and local social requirements as specified in the Investment Agreement
8.
Data Interpretation and Corrective Measures
30
Specialist Contact Information
If you
have any
questions regarding
the AMR or
wish to discuss
its completion,
please contact
the following
Investment Officer
or
Environmental Specialist
.
Investment
Officer
Name: Henrik Blaeute
Telephone
Number:
In U.S.A., XXX
Email
XXX
Environment
Specialist
Name: Jeff Anhang
Telephone
Number:
In U.S.A., XXX
Email
XXX
31
2
●
1 ENVIRONMENTAL
AND SOCIAL MANAGEMENT
1.1
AMR Preparer
To
be
completed
by
the
Company
authorized representative
Name and Title:
Phone:
Email:
Company Information
The Company office physical address:
The Company web page address:
I certify
that the
data contained
in this
AMR completely
and
accurately
represents the
Company
operations
during
this reporting
period. I
further certify
that analytical
data summaries
incorporated in
Section 6
are based
upon data
collected and
analyzed in
a
manner consistent with the applicable IFC Environmental Health, & Safety (EHS)
Guidelines.
The Company Employee Name
Signature
2
Raw analytical data upon which
summaries are based should not be
submitted with this AMR but
must be preserved by the
Company
and presented to each Investor upon request.
32
1.2
Environmental Responsibility Chart
Name below the individual(s) in
the Company who hold(s) responsibility
for environmental and social performance (e.g.
Environment
Manager,
Occupational Health
and Safety
Manager, Community
Relations Manager)
for all relevant
Company Operations
and give
their contact information (Name, Address, Telephone
Number, E-mail Address).
1.3
Summary of Current Operations
Describe any significant
changes since the
last report in
the company or
in day-to-day operations
that may affect
environmental and
social performance.
Describe any management initiatives (e.g. ISO 14001, ISO
9001, OHSAS 18001, SA8000, or equivalent Quality,
Environmental and Occupational Health and Safety certifications). Attach
summary reports, if relevant.
Provide the following information
Brief outcome description
Indicator
Financial
Performan
ce
Returns
to
all
capital
providers
Annual ROE
Economic
Performanc
e
Returns to Society
Annual ERR
Access to Financial Services
Number
of
EPE
Transaction Accounts
Environme
ntal
and
Social
Performanc
e
Development
of
ESMS
in
compliance
with
IFC
policy
requirements
ESMS
in
place
(yes
/
no)
Definitions:
-
Annual ROE
is calculated as net
income for the most
recent year divided by
average equity (average between
the most recent
year and the previous year)
-
Annual ERR
is calculated
as net
income for
the most
recent year
adjusted for
costs and
benefits to
the society
as a whole
(such as taxes paid) divided by average equity (average between the most
recent year and the previous year)
-
EPE Transaction Accounts
are the EasyPay Everywhere accounts offered by the
Company in South Africa
-
ESMS
refers to “S&E Management System” as defined by the Policy Agreement
33
3
4
5
6
●
2 OCCUPATIONAL
HEALTH
AND SAFETY PERFORMANCE (OHS)
The Company is required to monitor, record,
and report OHS incidents at all its facilities throughout the reporting period.
2.1 Host Country Compliance
Please
list
any
reports
submitted
to
Host
Country
authorities,
e.g.
on
pharmaceutical
safety,
OHS,
fire
and
safety
inspections,
compliance monitoring, emergency exercises, as well as comments received and corrective
actions taken.
Monitoring and inspections
from authorities with subsequent actions taken shall also be summarized
and reported.
2.2 Incident Statistics Monitoring
Please report on incidents during
the reporting year.
Contractor employees are required
to adhere to comparable occupational
health
and safety standards.
Expand or shrink the tables as needed.
●
1.
Incident Summary
This reporting period
Reporting
period-
1
year ago
Reporting period- 2 years ago
●
Report TOTAL
#s for
each parameter
Company
employees
Contractor
employees
Company
employees
Contractor
employees
Company
employees
Contractor
employees
Employees
Man-hours worked
Fatalities
Non-fatal injuries
Lost workdays
Vehicle
collisions
Incidence
2.
Fatality details for this reporting period
State whether fatality was of
a The
Company employee or
a contractor employee
Time of
death after accident
(e.g.
immediate,
within
a
month, within a year)
Cause of fatality
Corrective
measures
to
prevent reoccurrence
3
Incapacity to work for at
least one full
workday beyond
the day on
which the accident
or illness occurred.
4
Lost workdays are the number
of workdays (consecutive or not)
beyond the date of injury or
onset of illness that the employee
was
away from work or limited to restricted work activity because of an occupational
injury or illness.
5
Vehicle
Collision:
When
a
vehicle
(device
used
to
transport
people
or
things)
collides
(comes
together
with
violent
force)
with
another vehicle or inanimate or animate object(s) and results in injury (other
than the need for First Aid) or death.
6
Calculate incidence using the following equation: incidence= total lost workdays/
100,000 man-hours worked.
Use the total
lost workdays to calculate
the incidence for this
reporting period, reporting periods
1 year ago
and 2 years
ago, as required
above.
34
7
8
3.
Fatality details for this reporting period
State
whether
fatality
was
of
a
The
Company
employee
or
a
contractor
employee
Time
of
death
after
accident
(e.g.
immediate,
within
a
month,
within
a
year)
Cause of fatality
Corrective
measures
to
prevent reoccurrence
4.
Non-fatal injuries details for this reporting period
State
whether
non-
fatal
injury
was
of
a
The
Company
employee
or
a
contractor employee
Total workdays lost
Description of injury
Cause of accident
Corrective
measures
to
prevent
reoccurrence
5.
Training
for this reporting period
State whether
training
involved
The
Company
employees
or
contractor
employees
Description of training
Number of employees that attended
2.3 Significant OHS Events
If applicable, please explain any significant Occupational Health and Safety events not covered in
the above OHS tables.
This section
could cover issues relating to road safety or activity of security guards, for
example.
●
3 SIGNIFICANT ENVIRONMENTAL
AND SOCIAL EVENTS
The Company personnel are required to report all environmental and
social events
at all its facilities that may have caused damage;
caused
health
problems;
attracted the
attention
of outside
parties; affected
project
labor or
adjacent
populations;
affected
cultural
property; and/or Company liabilities.
Attach photographs, plot plans, newspaper articles and all relevant supporting information that
the Investors will need to be completely familiar with the incident and associated
environmental and social issues.
Please report on the following topics, expanding or collapsing the table where
needed.
Date of event
Event description
Affected
people/environment
Reports
sent
to
the
Investors
and/or
local
regulatory
agencies
Corrective
actions
(including
cost
and
time
schedule
for
implementation)
7
Company personnel should
be trained in
environmental, health and
safety matters including
accident prevention, safe
lifting practices,
the
use
of
Material
Safety
Data
Sheets
(MSDS),
proper
control
and
maintenance
of
equipment
and
facilities,
personal
protective
equipment (PEP), emergency response, etc., as needed.
8
Examples of
significant incidents
follow.
Fire; fatalities;
ecological
damage/destruction;
legal/administrative
notice of
violation;
penalties, fines, or increase in pollution charges; negative media attention;
labor unrest or disputes.
35
Date of event
Event description
Affected
people/environment
Reports
sent
to
the
Investors
and/or
local
regulatory
agencies
Corrective
actions
(including
cost
and
time
schedule
for
implementation)
●
4 GENERAL INFORMATION
AND FEEDBACK
Provide any additional information including the following:
1.
Describe print or broadcast media attention given to the Company during this reporting period related to Environmental, Social or
Health and Safety performance of the Company.
2.
Describe interactions with non-governmental organizations
(NGOs) or public scrutiny of the Company.
3.
Describe any
Company public
relations efforts
in the
context of
communicating environmental,
social and
safety aspects
of the
Company’s operations to
external interested parties (e.g. establishment of a web page, sponsorship events,
etc.).
●
5 SUSTAINABILITY OF
PROJECT AND ASSOCIATED
OPERATIONS
The Investors have
developed a framework
to help assess the
development impacts of
their investments. Many
of their projects
take
on
initiatives,
develop
processes,
or
install
equipment
that
exceeds
the
Investors’
environmental
and
social
requirements.
This
framework permits the Investors to rate project performance in various areas. Over the past year, has the Company made any changes
to operations or participated in any efforts that have impacted the
Company in the following areas?
q
Implemented an environmental and social management system (if not already
established)
q
Published an environment/sustainability or a corporate social responsibility
report (please send copy or provide web link)
q
Established formal and regular consultation with local community and other stakeholders
q
Decreased use of resources, increased emission controls, or increased by-product
recycling
q
Worked to
improve local supplier relationships or provided technical assistance to suppliers
q
Programs to benefit the local community
q
Employee programs - training, health, safety
If so, please offer details so we can assess your performance beyond
our compliance criteria.
36
ANNEX C
MINIMUM INSURANCE REQUIREMENTS
The insurances required to
be arranged by
the Company are
those customarily expected
of a similarly
situated prudent public
company,
including but not limited to the following:
1.
Crime insurance with cover to include, without limitation, the following:
(a)
Infidelity of employees;
(b)
Forgery or alteration; and
(c)
Electronic and computer crime;
2.
Cyber Insurance with cover including cyber liability and business interruption;
3.
Professional Liability / Errors and Omissions;
4.
Business Continuity plan;
5.
Directors and Officers Liability with worldwide coverage as required
by the Investors; and
6.
All insurances required by Applicable Law.
37
ANNEX D
List
of
Developing
or
Emerging
Market
Countries
in which the Proceeds Must be Used
AFGHANISTAN
GHANA
OMAN
ALBANIA
GRENADA
PAKISTAN
ALGERIA
GUATEMALA
PALAU
ANGOLA
GUINEA
PANAMA
ARGENTINA
GUINEA-BISSAU
PAPUA NEW
GUINEA
ARMENIA
GUYANA
PARAGUAY
AZERBAIJAN
HAITI
PERU
BAHAMAS, THE
HONDURAS
PHILIPPINES
BANGLADESH
HUNGARY
POLAND
BARBADOS
INDIA
REPUBLIC
OF
SOUTH
AFRICA
ROMANIA
BELIZE
INDONESIA
RWANDA
BENIN
IRAN, ISLAMIC REPUBLIC OF
SAMOA
BHUTAN
IRAQ
SAO TOME AND PRINCIPE
BOLIVIA
ISRAEL
SAUDI ARABIA
BOSNIA
AND
HERZEGOVINA
JORDAN
SENEGAL
BOTSWANA
KAZAKHSTAN
SERBIA
BRAZIL
KENYA
SIERRA LEONE
BURKINA FASO
KIRIBATI
SINGAPORE
BURUNDI
KOREA, REPUBLIC OF
SLOVAK
REPUBLIC
CABO VERDE
KOSOVO
SOLOMON ISLANDS
CAMBODIA
KYRGYZ REPUBLIC
SOMALIA
CAMEROON
LAO
PEOPLE'S
DEMOCRATIC
REPUBLIC
SOUTH SUDAN
CENTRAL
AFRICAN
REPUBLIC
LEBANON
SRI LANKA
CHAD
LESOTHO
ST. KITTS AND NEVIS
CHILE
LIBERIA
ST. LUCIA
CHINA
LIBYA
ST.
VINCENT
AND
THE
GRENADINES
COLOMBIA
MACEDONIA,
FORMER
YUGOSLAV
REPUBLIC OF
SUDAN
COMOROS
MADAGASCAR
SWAZILAND
CONGO,
DEMOCRATIC
REPUBLIC OF
MALAWI
SYRIAN ARAB REPUBLIC
CONGO, REPUBLIC OF
MALAYSIA
TAJIKISTAN
COSTA RICA
MALDIVES
TANZANIA
COTE D'IVOIRE
MALI
THAILAND
CROATIA
MARSHALL ISLANDS
TIMOR-LESTE
CYPRUS
MAURITANIA
TOGO
CZECH REPUBLIC
MAURITIUS
TONGA
DJIBOUTI
MEXICO
TRINIDAD AND TOBAGO
DOMINICA
MICRONESIA,
FEDERATED
STATES
OF
TUNISIA
DOMINICAN REPUBLIC
MOLDOVA
TURKEY
ECUADOR
MONGOLIA
TUVALU
EGYPT, ARAB REPUBLIC OF
MONTENEGRO
UGANDA
38
EL SALVADOR
MOROCCO
UKRAINE
EQUATORIAL
GUINEA
MOZAMBIQUE
UZBEKISTAN
ERITREA
MYANMAR
VANUATU
ETHIOPIA
NEPAL
VIETNAM
FIJI
NICARAGUA
YEMEN, REPUBLIC OF
GABON
NIGER
ZAMBIA
GAMBIA, THE
NIGERIA
ZIMBABWE
GEORGIA
39
SCHEDULE 1
FORM OF LETTER TO COMPANY’S
AUDITORS
[Letterhead of the Company]
[Date]
[NAME OF AUDITORS]
[ADDRESS]
IFC Investment No. 37402
Letter to Auditors
Ladies and Gentlemen:
We
hereby
authorize
and
instruct
you
to
give
to
International
Finance
Corporation,
2121
Pennsylvania
Avenue,
N.W.,
Washington,
D.C.
20433,
United
States
of
America
(“
IFC
”),
IFC
African,
Latin
American
and
Caribbean
Fund,
LP,
2121
Pennsylvania Avenue,
N.W.,
Washington,
D.C. 20433,
United States
of America
(“
ALAC
”) and
IFC Financial
Institutions Growth
Fund, LP,
2121 Pennsylvania Avenue,
N.W.,
Washington,
D.C. 20433, United
States of America (“
FIG
”and, together with IFC
and
ALAC, the
“
Investors
”), all
such information
as any
Investor may
reasonably request
with regard
to the
financial statements
(both
audited and unaudited),
accounts and operations
of the undersigned
company.
We
have agreed to
supply that information
and those
statements under
the terms
of an
Amended &
Restated Policy
Agreement, dated
October 28,
2024, by
and among
the undersigned
company
and
the
Investors
named
therein
(the
“
Policy
Agreement
”).
For
your
information
we
enclose
a
copy
of
the
Policy
Agreement.
We
understand that
any such
information request
will be
evaluated with
reference to
the relevant
auditing standards,
laws
and your formal policy and may be declined on these grounds. Should any request be declined, please provide the requesting Investor
and the
Company with
a written
explanation containing
the reasons
for your
decision.
We
hereby agree
to execute
any customary
indemnity and/or engagement letter you may require in advance of your providing
to the Investors any information they may request.
For our records, please ensure that you send
to us a copy of
every letter that you receive from the
Investors immediately upon
receipt and a copy of each reply made by you immediately upon the issue of that
reply.
Yours
faithfully,
LESAKA TECHNOLOGIES, INC.
By: ________________________
Name:
Title: [Authorized Representative]
Enclosure: Policy Agreement
cc:
Director,
TMT, Venture
Capital & Funds
International Finance Corporation
2121 Pennsylvania Avenue,
N.W.
Washington,
D.C.
20433
United States of America
40
SCHEDULE 2
ACTION PLAN
Net1 – Environmental and Social Action Plan (ESAP)
PS/Action Item
Due Date
PS1: At
least one
qualified person
will be
nominated to
be an
Environmental
and Social
(E&S) coordinator for the Company.
Subscription
Date
(as
defined
in
the
Subscription Agreement)
PS1:
Provision
and
implementation
of
E&S
policies
and
procedures
satisfactory
to
each
Investor,
consistent
with
IFC
Performance
Standards
and
IFC
Telecommunications
Guidelines
–
to
integrate
pollution
control,
waste
management,
rehabilitation
activities,
road
safety,
emergency
preparedness,
life
and
fire
safety,
and
monitoring/reporting,
especially regarding the development, installation, operation, maintenance and
repair of the
Company’s stationary and mobile ATMs
and associated vehicle fleet.
90
days
after
the
Subscription Date or May
15,
2016
(whichever
comes first)
PS2:
Provision and implementation
of policies
and procedures satisfactory
to each Investor,
consistent with IFC Performance Standards –
to ensure that workers
are provided a safe
and
healthy work environment,
including provision of
appropriate training
and equipment and
reporting on key health and safety statistics.
30 days after Subscription
Date
or
May
15,
2016
(whichever comes first)
PS3: Provision and implementation of
policies and procedures satisfactory
to each Investor,
consistent with IFC Performance
Standards – to provide
for waste management
consistent
with
Section
1.6
of
the
World
Bank
Group
General
EHS
Guidelines,
and
to
provide
for
screening
of
automotive
service
providers
for
any
significant
environmental,
health
and
safety concerns, including potential use of harmful child labor.
30 days after Subscription
Date
or
May
15,
2016
(whichever comes first)
41
9
SCHEDULE 3
FORM OF PUT NOTICE
[DATE]
VIA ELECTRONIC EMAIL AND COURIER
LESAKA TECHNOLOGIES, INC.
President Place, 4
th
Floor,
Cnr. Jan Smuts Avenue
and Bolton Road
Rosebank, Johannesburg 2196, South Africa
Attention:
Ali Mazanderani
, Executive Chair
Ladies and Gentlemen,
Re: Put Notice - IFC Investment Number 37402
1.
Please refer to the Amended &
Restated Policy Agreement dated October 28, 2024 (the
“
Policy Agreement
”), by and among
Lesaka Technologies, Inc. (the “
Company
”), International Finance Corporation (“
IFC
”), IFC African, Latin
American and Caribbean
Fund, LP (“
ALAC
”) and IFC Financial
Institutions Growth Fund,
LP (“
FIG
” and, together with IFC,
and ALAC , the “
Investors
”).
Unless otherwise defined
in this notice, capitalized
terms defined in the
Policy Agreement have
the same defined meaning
wherever
used in this Put Notice.
2.
Without prejudice
to the undersigned Investor’s
rights under the Transaction
Documents, in accordance
with the provisions
of Section
4.01 (
The Put
Option
) of the
Policy Agreement, the
undersigned Investor
hereby exercises
the Put
Option by
delivery of
this Put Notice.
3.
The Put Shares
are (x) all
of the Investor
Shares owned by
the undersigned Investor
that were either
purchased pursuant to
the Subscription Agreement or
pursuant to Section 3.06
(
Preemptive Rights
) of the
Policy Agreement, and any
Equity Securities issued
by way
of stock
split or
stock dividend
on such
Investor Shares
and (y)
all of
the Additional
Put Shares,
and any
Equity Securities
issued by way of stock split or stock dividend on such Additional Put Shares.
4.
The Put
Price is
[
]
($[
]) based
on a
Put Price
Per Share
of [
] ($[
])
in respect
of the
Investors Shares
and ($[
]) in
respect of the Additional Put Shares, calculated in accordance with the methodology set forth in the Policy
Agreement and annexed to
this Put Notice.
5.
The Settlement Date shall be [date].
6.
On the Settlement Date, the purchase and sale of the Put Shares shall be effected
and:
(i)
the
Put
Price
shall
be
paid
by
the
Company
no
later
than
1:00
PM
(New
York)
to
the
following
account:
[_____________________],
for
credit
to
the
undersigned
Investor’s
account
number
___________
–
Reference:
project ID# [
] – Put Proceeds; and
(ii)
the undersigned Investor shall, after receipt of the Put Price, transfer the Put
Shares to the Company.
7.
Notwithstanding
the
delivery
to
the
Company
of
this Put
Notice
by
the
undersigned
Investor
and
the
exercise
of
the Put
Option pursuant hereto, and without prejudice to the terms and conditions and any other rights the undersigned Investor has under the
Policy Agreement
or any other
Transaction
Document, pursuant
to Section 4.01
(e) of the
Put Option Agreement
if the undersigned
Investor delivers
to the
Company,
before the
Settlement Date,
a written
notice of
withdrawal of
this Put
Notice, then,
immediately
thereupon and
with no
further action
by the
undersigned Investor
or the
Company,
this Put
Notice and
the Put
Option exercise
the
subject of this
Put Notice
shall be
deemed for
all purposes to
be withdrawn
by the undersigned
Investor and
cancelled as if
this Put
Notice and its related exercise of the Put Option had not been exercised.
[8.
The
undersigned
Investor hereby
certifies
that it
does not
have
any
agreement,
arrangement
or understanding,
directly
or
indirectly,
with
the
Person(s)
who
have
made
the
Bona
Fide
Offer
to
the
Company
in
respect
of
which
this
Put
Option
is
being
exercised.]
Yours
truly,
[Name of Investor]
9
To be included
if Put Notice is being delivered in respect of a Plan Put Trigger Event.
42
______________________
[AUTHORIZED SIGNATORY]