Blueprint





Exhibit
4.01










EXHIBIT 4.01


 



THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
IN ACCORDANCE WITH REGULATION S OR PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

 



Freedom Holding Corp.

 

 



(incorporated with limited liability under

 

 



the laws of the State of Nevada,

 

 



United States of America)

 

 



TERMS AND CONDITIONS OF THE U.S.$50,000,000

 

 



NOTES DUE 2022 (ISIN: KZX000000294)

 

 


issued
by Freedom Holding Corp.

 

 


The
U.S.$50,000,000 aggregate principal amount of 7.000% Notes due 2022
(the “Notes”,
and each a “Note”) of Freedom Holding Corp.
(the “Issuer”)
will be issued in accordance with and governed by the Acting law of
the Astana International Financial Center (the “AIFC”) and these terms and
conditions in the denomination of U.S.$100,000 each Note. This
document constitutes the Terms and Conditions of the Notes (the
“Note Terms and
Conditions”) described herein and is prepared for the
purposes of AIFC rules. Full information on the Issuer and the
initial purchase of the Notes is only available on the basis of the
Offering Memorandum, dated 24 December 2019, including the Note
Terms and Conditions therein. The Note Terms and Conditions have
been published on the website of the Astana International Exchange
(hereinafter – the “AIX”) at
https://www.aix.kz.

 


An
application has been made for the Notes to be admitted to the
Official List of the AIX and to be admitted to trading on the AIX
as "Wholesale Notes" in accordance with section 16-1 of the AIX
Markets Listing Rules by the Lead manager of admission to AIX.
Wholesale Notes may only be offered and sold to Accredited
Investors (as defined in section 16-1 of the AIX Markets Listing
Rules). The AIX does not guarantee that the Notes will be admitted
to the Official List of the AIX. The AIX reserves the right to
grant admission of the Notes to the Official List of Securities of
the AIX only when it is satisfied that such admission is in
accordance with AIX Markets Listing Rules. The Issuer did not seek
independent legal advice with respect to the listing of the Notes
on the AIX in accordance with the Note Terms and
Conditions.

 



The AIX does not accept responsibility for the content of the
information included in this document including the accuracy or
completeness of such information. Liability for this document lies
with the Issuer. Nor has the AIX assessed the suitability of the
securities to which the document relates for any particular
investor or type of investor. If you do not understand the contents
of this document or are unsure whether the securities are suitable
for your individual circumstances, you should consult an authorized
financial advisor. The AIX, its directors, officers or employees,
do not accept responsibility for the content of the information
included in the Note Terms and Conditions, including the accuracy
or completeness of such information. Nor has the AIX, its
directors, officers or employees, assessed the suitability of the
securities to which the Note Terms and Conditions relates for any
particular investor or type of investor.

 


These
Notes constitute debt instruments. An investment in the Notes
involves risks. By subscribing to the Notes, investors lend money
to the Issuer who undertakes to pay interest on a semi-annual basis
and to reimburse the principal on the Maturity Date. In case of
bankruptcy or default by the Issuer, the investors may not recover
the amounts they are entitled to and risk losing all or part of
their investment. The Notes are intended for investors who are
capable of evaluating the interest rates in light of their
knowledge and financial experience. Each potential investor must
investigate carefully whether it is appropriate for the investor to
invest in the Notes, taking into account his or her knowledge and
experience, and must, if needed, obtain professional
advice.

 



 

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Definitions


 

	

Whenever
used in these Note Terms and Conditions, unless there is something
in the subject matter or context inconsistent therewith, the
following words and phrases will have the respective meanings
ascribed to them as follows:


 “Accredited
Investor” has the meaning set forth in Rule 1.1.2(6)
of the AIX Market Rules, i.e., (i) any natural person who acquires
or intends to acquire securities for a total consideration of at
least U.S.$100,000 (one hundred thousand U.S. dollars) per person
for each separate offer; or (ii) an “authorized
person;” or (iii) a “body corporate” as defined
under the AIX Market Rules;


“AIFC”
means the Astana International Financial Centre;


“AIFC
Laws” means the Acting law of the Astana International
Financial Centre;


“AIX”
means the Astana International Exchange, operated by the Astana
International Exchange Ltd.;


“AIX
CSD” means the Astana International Exchange Central
Securities Depository, Ltd.;


“Day
Count Fraction" means, for purposes of determining Note
interest payments, time calculated on the basis of a year of 360
(three hundred and sixty) days consisting of 12 (twelve) months of
30 (thirty) days each;


“Depository”
means the AIX CSD;


“Exchange
Act” means the United States Securities Exchange Act
of 1934, as amended;


“Face
Value” means U.S.$100,000 (one hundred thousand U.S.
Dollars) per one Note;


“Interest
Payment Date” means the 27 of December and 27 of June
in each year, the first Interest Payment Date being 27 June
2020;


“Interest
Period” means each period beginning on (and including)
the Issue Date or any subsequent Interest Payment Date and ending
on (but excluding) the next Interest Payment Date;


“Investor”
means a person that purchases one or more Notes pursuant to a
subscription under the Offering Memorandum;


“ISIN”
means the International Securities Identification Number that
uniquely identifies the Notes, as defined by the
“International Organization for Standardization” in ISO
6166;


“Issue
Date” means 27 December 2019;


“Issuer”
means Freedom Holding Corp., a corporation organized in the State
of Nevada, United States of America, with Entity No.
C3081-2004;


“Lead
Manager of admission to AIX” means Freedom Finance
JSC, 77/7, Al-Farabi ave., Esentai Tower BC, 3rd floor, Almaty,
A15E3H4 (050040), the Republic of Kazakhstan;


“Maturity
Date” means 27 December 2022, the third anniversary
date of Issue Date;


“Notes”
means the U.S.$50,000,000 aggregate principal amount of 7.000%
Notes due 27 December, 2022 of the Issuer;


“Offering”
means the offer and sale of the Notes by the Issuer made through
the Offering Memorandum;


“Offering
Memorandum” means the Issuer’s offering
memorandum, dated 24 December 2019;


“Official
List” means the Official List of Securities maintained
by the AIX;


“Person”
means any individual, company, corporation, firm, partnership,
joint venture, association, organization, state or agency of a
state or other entity, whether or not having separate legal
personality;


“Placement
Agent” means jointly and severally, Freedom Finance
JSC, 77/7, Al-Farabi ave., Esentai Tower BC, Floor 3and 7, Almaty,
A15E3H4 (050059), Kazakhstan and Freedom Finance Cyprus
Ltd.”, Andrea Zappa 1, office 1, 4040 Limassol,
Cyprus;


“Rate
of Interest” means 7.000 per cent per
annum;


“Regulation
S” means Regulation S under the Securities
Act;


“Registrar”
means Astana International Exchange Registrar Limited, a company
incorporated in the AIFC under company identification number
180840900010;


“Registry
Agreement” means the Registry Services Agreement (as
amended or supplemented from time to time), between the Issuer and
the Registrar; acting from the AIFC as registrar and transfer agent
for the Notes, acting in accordance with the Acting law of the
AIFC.


“Relevant
Date” means, in relation to any payment in respect of
a Note, whichever is the later of (1) the date on which the payment
in question first becomes due and (2) if the full amount payable
has not been received by the Noteholder prior to such due date, the
date on which the full amount has been so received by the
Noteholder;


“SEC”
means the United States Securities and Exchange
Commission;


“Securities
Act” means the United States Securities Act of 1933,
as amended;


“Transfer
Agent” means the Registrar acting as a transfer agent
under the Registry Agreement.


“U.S.
Dollars” and “U.S.$” means the lawful currency
of the United States;


“U.S.
GAAP” means accounting principles generally accepted
in the United States;


“United
States” means the United States of
America;


“Wholesale
Notes” means the Notes that are (i) offered and sold
exclusively to Accredited Investors; and (2) have a principal
amount of at least U.S.$100,000 (one hundred thousand U.S.
dollars).


 






 



 

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Aggregate Principal Amount of the Notes


 

	

The
aggregate principal amount of the Notes is U.S.$50,000,000 (fifty
million U.S. dollars).


 


	


Note Issue Price


 

	

Each
Note will be sold by the Issuer for 100% (one hundred percent) of
the face value of the Note, plus accrued interest premium from the
Issue Date, if any. The proceeds from Offering shall be paid to the
Issuer in U.S.$.


 


	


Currency


 

	

The
Notes will be denominated in U.S. Dollars
(“U.S.$”).


 


	


Note ISIN


 

	


KZX000000294


 


	


Placement of the Notes


 

	

The
Notes will be sold by the Issuer through the Placement Agent. The
Placement Agent will be paid a fee equal to 1% of the Notes sold by
the Placement Agent.


 


	


Note Form and Denomination


 

	

Notes
are in registered form, without certificates, in denominations of
U.S.$100,000 (one hundred thousand dollars) per Note issued under the Acting law of AIFC,
including AIX Markets Listing Rules (section 16-1);


If
Notes are admitted to trading on the AIX, the Notes shall be
tradeable only in the minimum authorized denomination of
U.S.$100,000 (one hundred thousand U.S. dollars).


 


	


Register, Title and Transfer


 

	

The
Notes are subject to the terms of the Registry Services Agreement.
All Note registrations and transfers will be conducted exclusively
by Registrar under the terms of the Registry Agreement. Holders of
the Notes are bound by, and are deemed to have notice of, all the
provisions of the Registry Agreement applicable to them. Copies of
the Registry Agreement are available for inspection during normal
business hours at the office of the Registrar.


 

 

(a) Register: The Registrar will maintain a
register (the
“Register”) in
electronic book-entry form in respect of the Notes in accordance
with the provisions of the Registry Agreement. In these Terms and
Conditions, the “Holder” or “Noteholder” of a Note means the
person in whose name such Note is for the time being registered in
the Register (or, in the case of a joint holding, the first named
thereof). In case of nominee holding, recording of the Notes shall
be made by way of registration thereof through a brokerage or
direct accounts opened with the AIX CSD.

 

(b) Title: The Holder of each Note shall
(except as otherwise required by law) be treated as the absolute
owner of such Note for all purposes whether or not it is overdue
and regardless of any notice of ownership, trust or any other
interest therein. No person other than a Holder shall have any
right to enforce any term or condition of the Notes.

 

(c) Transfers: Subject to paragraph (e)
(Closed periods), a Note
may be transferred only in conformity to the Registry Agreement,
Regulation S and the market rules of an exchange where the Notes
are admitted to trading on the exchange.

 

(d) Charge: The transfer of a Note may be
subject to a reasonable and normal charge imposed by the Registrar
in connection with such transfer.

 

(e) Closed
periods: Noteholders may not require transfers to be
registered during the period of 15 days ending on the due date for
any payment of principal or interest in respect of the
Notes.

 


 


	


Role of Registrar


 

	

In
acting under the Registry Agreement and in connection with the
Notes, the Registrar acts solely as agent of the Issuer and does
not assume any obligations towards or relationship of agency or
trust for or with any of the Noteholders.


 






 



 

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Status of the Notes


 

	

The
Notes shall constitute direct, general and unconditional
obligations of the Issuer which will rank pari passu among
themselves and rank pari passu, in terms of payment rights, with
all other current or future unsubordinated obligations of the
Issuer, except for liabilities mandatorily preferred by
law.


 


	


Interest


 

	

The
Notes will bear interest at the Rate of Interest on the outstanding
principal amount from (and including) the relevant Issue Date to
(but excluding) the Maturity Date. Interest amount per one Note
shall be calculated using the following formula: Specified Denomination × Rate of Interest
× Day Count Fraction, and rounding the resulting figure
to the nearest cent (half a cent being rounded
upwards).


 


	


Payments


 

	

The
Rate of Interest for an Interest Period will be paid semi-annually
in arrears within 10 (ten) calendar days after (and including) each
Interest Payment Date.


 

 



Principal and Interest


Principal
and interest on the Notes shall be paid to Holders as shown on the
Register at the close of business on the third day before the due
date for payment thereof (the “Record Date”). Interest on Notes
shall be paid within 10 (ten) calendar days after (and including)
the relevant Interest Payment Dates by a bank wire transfer (in
U.S.$ only) to bank accounts of the Holders as stated in the
Noteholder Register at the Record Date. The final payment of
interest shall be made concurrently with payment of the principal
of the Notes within 10 (ten) calendar days after (and including)
the relevant Maturity Date. All payments in respect of the Notes
shall be made in U.S.$.


 

 


Each
Holder shall be responsible for maintaining current, complete, and
accurate bank wire instructions in the Register. The Issuer shall
have no liability to a Holder for nonpayment of Interest in a
timely manner due to the failure of the Holder to provide required
bank wire instructions.


 

 


Holder
claims for principal or interest shall become void if the Holder
fails to provide complete and accurate bank wire instructions in
the Register within 1 (one) year (in the case of principal) or
within 1 (one) year (in the case of interest) of the appropriate
Relevant Date.


 

 


All
payments in respect of the Notes are subject in all cases to any
applicable fiscal or other laws and regulations in the place of
payment. No commissions or expenses shall be charged to the
Noteholders in respect of such payments.


 

 


The
Notes are not subject to a trust deed or indenture and there is no
paying agent to oversee payments of interest and principal. The
Issuer will be directly responsible to effect all payments to be
made pursuant to the Note Terms and Conditions according to the
records of the AIX Registrar.


 


	


Penalty


 

	

The
Issuer shall pay a penalty to Holders of the Notes for each day, on
which any amount payable under the Notes remains due and unpaid
(the “Unpaid Amount”), at the rate equal to the Rate of
Interest. The amount of penalty payable per any Unpaid Amount in
respect of any Notes shall be equal to the product of the Rate of
Interest, the Unpaid Amount and the number of calendar days on
which any such Unpaid Amount remains due and unpaid divided by 360
(three hundred and sixty), rounding the resultant figure to the
nearest cent, half of any such cent being rounded
upwards.


 






 



 

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Non-business Days


 

	

If any
date for payment in respect of the Notes is not a business day, the
holder shall not be entitled to payment until the next following
business day nor to any interest or other sum in respect of such
postponed payment. In this paragraph, “business day”
means a day on which banks and exchange markets are open for
business in the Republic of Kazakhstan.


 


	


Redemption


 

	

Notes
shall be redeemable at par. The redemption of the Notes shall be
made concurrently with the final payment of interest within 10
(ten) calendar days after (and including) the relevant Maturity
Date.


 


	


Early Redemption


 

	


Early redemption at the option of the Issuer


The
Notes may be redeemed in whole at par before their stated maturity
at the option of the Issuer only if the Issuer has secured prior
written consent(s) of the Holders of at least three-fourth in
principal amount of the Notes then outstanding.


 

 



Early redemption at the option of Holders of the Notes


If at
any time while any of the Notes remains outstanding an Event of
Default occurs, the Issuer shall, at the option of the holder of
the Notes, upon the holder of the Notes giving not less than 15
(fifteen) nor more than 30 (thirty) day notice to the Issuer,
redeem such Notes on the day specified in such notice at 100% (one
hundred percent) of its principal amount together with the interest
accrued to (but excluding) the date specified for the
redemption.


 

 


Following
the occurrence of any Event of Default the Issuer may arrange
negotiations with the Holders of the Notes in respect of the early
redemption at the option of the Holders of the Notes.


 

 


Within
10 (ten) calendar days after (and including) the second and fourth
Interest Payment Dates the Issuer shall, at the option of the
holder of the Notes, upon the holder of the Notes giving not less
than 10 (ten) calendar day notice before the relevant Interest
Payment Date to the Issuer, redeem such Notes at 100% (one hundred
percent) of its principal amount together with the interest to be
paid on the relevant Interest Payment Dates.


 


	


Open Market Purchases


 

	

The
Issuer or its affiliates may at any time purchase Notes in the open
market or otherwise at any price. Any such purchased Notes will not
be resold, except in compliance with applicable requirements or
exemptions under the relevant securities laws.


	


Events of Default


 

	

If any
of the following events (each an “Event of Default”)
occurs, the Issuer within 2 (two) business days shall notify the
Holders of the Notes about such Event of Default, and any Holder of
a Note then outstanding is entitled to give notice to the Issuer
that the Note is, and shall immediately become, due and payable at
100% (one hundred percent) of its principal amount together with
accrued interest to the date specified for redemption in such
notice:

(a) Non-payment: the
Issuer fails to pay the principal of any of the Notes when such
principal becomes due and payable at maturity, by declaration or
otherwise, or the Issuer is in default with respect to the payment
of interest or penalty on the Notes, and such default continues for
a period of at least 10 (ten) business days; or


 

(b) Breach of other
obligations: the Issuer is in default of the performance, or is
otherwise in breach, of any covenant, obligation, undertaking or
other agreement, including but not limited to, the breach of
Condition “Other obligations of the Issuer” below, and
such default or breach is not remedied within 30 (thirty) calendar
days after a notice thereof has been given to the Issuer by any
holder of the Notes.


 


Any
claim against the Issuer in respect of the Notes other than for
payments of principal and interest shall become invalid, unless it
is filed within 1 (one) year from the date of the nonpayment or
breach.


 






 



 

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Other Obligations of the Issuer


 

	

So long
as the Notes remain outstanding:

(a) the Issuer will
not, and will not permit any subsidiary outside the course of
ordinary business to enter into a single transaction or in a series
of transactions (whether related or not) with a view to sell, lease
with transfer of ownership rights, transfer or otherwise dispose of
its assets involving aggregate dispositions exceeding 20% (twenty
percent) of the total assets of the Issuer, calculated by reference
to the Issuer’s most recent available consolidated financial
statements as of the most reporting date preceding such a
disposal;

 

(b) the Issuer will not
allow any default under its liabilities, including but not limited
to, obligations evidenced by bonds, debentures, notes, loans or
other similar instruments, for an aggregate amount exceeding 5%
(five percent) of the Issuer’s total assets calculated by
reference to the Issuer’s most recent available consolidated
financial statements as of the most recent reporting date preceding
such a default;

 

(c) the Issuer will not
undertake any reorganization as a legal entity without prior
written consent of Holders of at least three-fourth in principal
amount of the Notes outstanding;

 

(d) the Issuer will not
allow the occurrence of any of the following events: initiation of
bankruptcy proceedings or similar measures by any person in
accordance with the legislation of countries where its subsidiaries
operate, including any insolvency, rehabilitation, readjustment of
debt, marshalling of assets and liabilities, moratorium of payments
or similar arrangements involving the Issuer, or the appointment of
a rehabilitation manager, interim manager, bankruptcy trustee or
similar insolvency officer in relation to the Issuer or its
assets;

 

(e) the Issuer will not
terminate a listing of the Notes in the Official List of the AIX
after a listing is granted; and

 

(f) the Issuer will not
amend or substitute any entity in place of the Issuer as the
principal debtor in respect of the Notes, without prior written
consent of Holders of at least three-fourth in principal amount of
the Notes then outstanding;

 


 


	


Listing and Admission to Trading


 

	

Issuer
has made application for the Notes to be admitted to the Official
List of the AIX and to be admitted to trading on the AIX as
“Wholesale Notes” in accordance with section 16-1 of
the AIX Markets Listing Rules.


 


	


Estimated Expenses


 

	

All
fees shall be paid in accordance with a listing agreement entered
into between the Issuer and the AIX. The services of the AIX
Registrar during the period beginning at the effective date through
31 December 2019 (inclusive) shall be rendered to the Issuer at no
charge.


 

 


The
services of AIX CSD shall be paid in accordance with the AIX CSD
Rules, procedures and notices.


 


	


Investment Restrictions


 

	

The
Offering of the Notes shall be subject to applicable laws and
regulations, including the AIX Market Listing Rules (section 16-1),
and the Notes may not be sold in other jurisdictions, including
without limitation the Russian Federation, the United Kingdom and
the European Economic Area, other than in compliance with
applicable laws and regulations.


 

 


The
Notes have not been and will not be registered under the Securities
Act, and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except in accordance
with Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act.


 

 


Notes
may not be sold to U.S. persons and all Notes sales must occur in
off shore transactions outside the United States.


 

 


In
Kazakhstan the Notes may only be offered or sold to Accredited
Investor(s).


 






 



 

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Taxation


 

	


The Constitutional Law “On Astana International Financial
Centre”, provides that any interest or capital gain on the
securities listed on the AIX are tax exempt until 1 January 2066.
Accordingly, following the admission of the Notes to the Official
List of the AIX, any income derived from owning or selling such
Notes will be tax exempt as long as the Notes are listed on the
AIX. Delisting of the
Notes from the official list of AIX may subject gains and interest
payments on the Notes to tax in the Republic of
Kazakhstan.


 

 



All payments of principal and interest in respect of the Notes by
or on behalf of the Issuer shall be made free and clear of, and
without withholding or deduction for or on account of, any present
or future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by
or on behalf of the United States or the Republic of Kazakhstan or
any political subdivision thereof or any authority therein or
thereof having power to tax, unless the withholding or deduction of
such taxes, duties, assessments or governmental charges is required
by law. In the event the Issuer shall pay such additional amounts
as will result in receipt by the Noteholders of such amounts after
such withholding or deduction as would have been received by them
had no such withholding or deduction been required.


 

 



Any reference in these Terms and Conditions to principal or
interest shall be deemed to include any additional amounts in
respect of principal or interest (as the case may be) which may be
payable under this condition.


 

 



If the Issuer becomes subject at any time to any taxing
jurisdiction other than the United States or the Republic of
Kazakhstan references in these Note Terms and Conditions to the
United States or (as the case may be) the Republic of Kazakhstan
shall be construed as references to the United States or (as the
case may be) the Republic of Kazakhstan and/or such other
jurisdiction.


 


	


Placement Methods, Delivery, Clearing and Settlements


 

	

The
delivery of the Notes shall be done over the counter through the
AIX Registrar system. The primary placement of the Notes with
subscribers shall be done through a subscription agreement to be
entered into by the Issuer and each subscriber.


 

 


The
proceeds from primary placement of the Notes shall be paid to the
Issuer in accordance with such subscription agreement. Recording of
the Notes shall be made by way of registration thereof with the
Registrar. In case of nominee holding, recording of the Notes shall
be made by way of registration thereof through a brokerage or
direct account opened with the AIX CSD.


 

 


The
Issuer, at its sole discretion, may also opt to conduct the primary
placement of the Notes through subscription using the book-building
platform of the trading system of the AIX in accordance with the
AIX Market Rules and relevant AIX market notice. In that case the
payment and settlement will be made through the settlement system
of the AIX CSD in accordance with the rules and regulations of the
AIX CSD, in particular delivery of the Notes through the system of
the AIX CSD. In order to participate in the offering of the Notes
through the book-building procedure, take delivery of the Notes and
trade the Notes on the AIX, investors are required to have an
account opened with a brokerage company admitted as an AIX Trading
Member and an AIX CSD Participant. The Notes will be held on behalf
of investors in the relevant AIX Trading Member’s custodial
account at AIX CSD.


 


	


Notices


 

	


To the Holders of the Notes


All
notices to the Holders of the Notes shall be deemed to have been
duly given if, so long as the Notes are listed on the AIX and so
long as the rules of the AIX so require, by publication (i) on the
internet website of the AIX at www.aix.kz or (ii) otherwise in
accordance with the regulations of the AIX. If the Notes cease to
be listed on the AIX, any notice shall be sent to the Holders of
the Notes by first class mail (or its equivalent) or (if posted to
an overseas address) by airmail at their respective addresses in
the Register, and any such notice shall be deemed to have been
given on the fourth day after the date of mailing.


 

 



To the Issuer


Notices
to the Issuer will be deemed to be validly given if delivered to
the Issuer at 324 South 400 West, Suite 250, Salt Lake City, Utah,
84101, USA for the attention of the Secretary and will be deemed to
have been validly given when received by the Issuer, or such other
United States administrative office address as stated on its
corporate website:


https://www.freedomholdingcorp.com/about/office-locations


 






 



 

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Amendments


 

	

No
amendment to the Note Terms and Conditions shall be made by the
Issuer unless the Issuer has secured prior written consent(s) of
the Holders of at least three-fourth in principal amount of the
Notes then outstanding, except the Issuer may without the consent
or vote of and Holders of the Notes, amend or supplement the Note
Terms and Conditions for the following purposes:

(a) to cure any
ambiguity, omission, defect or inconsistency;

 

(b) to add to the
covenants of the Issuer for the benefit of the
Noteholders;

 

(c) to surrender any
right conferred upon the Issuer;

 

(d) to provide for the
issuance of additional Notes;

 

(e) make any other
change that does not materially and adversely affect the rights of
any Noteholder; and

 


(f)     
to comply with any applicable requirements of the AIX or
SEC.


 







	


Authorizations


 

	

The
Issuer has obtained all necessary consents, approvals and
authorizations in connection with its entry into, and the
performance of its obligations under the documents to be entered
into by the Issuer in relation to the issue of the
Notes.


 


	


Use of Proceeds


 

	

Proceeds
from the issue of the Notes will be used for restructuring
corporate borrowing, general corporate purposes and financing of
business development initiatives.


 






 



 

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Risk Factors


 

	


Investment in the Notes is subject to various types of risk. The
following brief summaries of risk are taken from the Offering
Memorandum and are subject to the more detailed descriptions of
risk factors stated in the Offering Memorandum.


 

 



Risks related to the Issuer



The Issuer (also referred to in these risk factors as
“our” and “we”) is exposed to the following
significant risks that might impact its operations and ability to
make interest payments and principal payments:

● Our
business is affected by general business and economic conditions,
which could materially and adversely affect our business, financial
position, results of operations or cash flows.

● We
operate in emerging consumer financial services sector in Eastern
Europe and Central Asia, which is a competitive landscape where
increased competition from larger service providers with greater
resources or superior service offerings could materially and
adversely affect our business, financial position, results of
operations or cash flows.

● Failure
to meet capital adequacy and liquidity guidelines could affect the
financial condition and operations of our
subsidiaries.

● We
may suffer significant losses from credit exposures.

● Our
investments can expose us to a significant risk of capital
loss.

● We
are subject to risks associated with our securities lending
business.

● Operating
risks associated with our securities lending business may result in
counterparty losses, and in certain circumstances, potential
financial liabilities.

● Larger
and more frequent capital commitments in our trading and
underwriting business activities increases the potential for us to
incur significant losses.

● We
may need to raise additional capital, and we cannot be sure that
additional financing will be available.

● We
are dependent on our executive management team, in particular Timur
Turlov. If we are unable to hire, engage and retain skilled
personnel, our business, financial position, results of operations
or cash flows could be materially and adversely
affected.

● Interruptions
in the proper functioning of our information technology, or
“IT” systems, including from cybersecurity threats,
could disrupt operations and cause unanticipated increases in costs
or decreases in revenues, or both.

● We
face risks relating to doing business internationally that could
materially and adversely affect our business, financial position,
results of operations or cash flows.

● The
countries in which we operate have changing regulatory regimes,
regulatory policies, and interpretations.

● We
are exposed to foreign currency fluctuations that could negatively
impact our financial results.

● We
are dependent upon our relationship with U.S. securities
broker-dealer and clearing firms to receive and transmit funds
internationally.

● We
may be unable to identify, acquire, close or integrate acquisition
targets successfully.

● We
could be adversely affected by violations of the anti-corruption
and anti-criminal regulations in effect in the United States and
the foreign jurisdictions where we conduct business.

● We
are a holding company with little or no operations of our own other
than the funding and management of our operating subsidiaries,
however, our financial statements are presented on a consolidated
basis.

● Timur
Turlov has control over key decision making as a result of his
ownership of a majority of our voting stock.

● Fulfilling
our obligations incident to being a public company, including with
respect to the requirements of and related rules under the
Sarbanes-Oxley Act and the Dodd-Frank Act, are expensive and
time-consuming, and any delays or difficulties in satisfying these
obligations could have a material adverse effect on our future
results of operations and our stock price.



Risks related to the Note Offering

● Holders
of the notes must depend on the Issuer’s subsidiaries to
provide the Issuer with sufficient funds to make payments on the
notes when due.

● We
may incur additional indebtedness ranking equally to the
notes.

● The
obligations under the notes will be subordinated to certain
statutory liabilities.

● There
are no financial covenants in the notes or the note terms and
conditions.

● The
notes are subject to transfer restrictions and are a new issue of
securities for which there is currently no public market. You may
be unable to sell your notes if a trading market for the notes does
not develop.

● Changes
in certain laws could lead to the redemption of the notes by the
Issuer.

● The
Issuer may choose to redeem notes when prevailing interest rates
are relatively low.


 






 



 

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Applicable Law and Jurisdiction


 

	

The
Notes, these Note Terms and Conditions, and any non-contractual
obligations arising out of, or in connection with, the Notes shall
be governed by, and construed in accordance with, the laws of the
AIFC. The Issuer has agreed herein the conditions in favor of the
Holders of the Notes that any claim, dispute or discrepancy of any
nature arising out of, or in connection with, the Notes (including
claims, disputes or discrepancies regarding the existence,
termination thereof, or any non-contractual obligations arising out
of, or in connection with, the Notes) shall be brought to, and
finally resolved by, the Court of the AIFC in accordance with the
rules thereof, or the International Arbitration Center of the AIFC
in accordance with the rules thereof, currently in effect, such
rules shall be deemed incorporated herein.


 


	


Future Issuances


 

	

The
Issuer may, from time to time, without the consent of the Holders
of the Notes, create and issue further debt securities including
debentures, debenture stock, bonds, loan notes, having either the
same terms and conditions as any outstanding debt securities of any
series (including the Notes) so that such further issue shall be
consolidated and form a single series with the outstanding debt
securities of the relevant series (including the Notes), or upon
such terms as the Issuer may determine at the time of their
issue.


 


	


Noteholder Meetings


 

	

The
Noteholders may require the Issuer to convene a meeting of the
Holders of the Notes to transact matters concerning the Notes,
including the amendment of any provision of these Terms and
Conditions. No amendment to the Terms and Conditions shall be
allowed, unless it is approved by a resolution of the Holders of at
least three-fourth in principal amount of the Notes then
outstanding.


 A
meeting shall be convened by the Issuer at a written request of the
Holders of not less than 10% (ten percent) of the total face amount
of the unredeemed Notes upon at least 30 day notice (exclusive of
the day on which notice is given and of the day on which the
relevant meeting is to be held).


The
quorum at any meeting of the Noteholder(s) convened for voting on
any matter in relation to these Terms and Conditions shall
constitute two or more Persons holding or representing at least 50%
(fifty percent) of the total amount of the unredeemed Notes, or, in
case of a meeting in absentia, two or more Persons acting as
Holders of the Notes or representatives thereof, holding or
representing at least 50% (fifty percent) of the total amount of
the unredeemed Notes. Any resolution passed at any such meeting
shall be binding upon all Holders of the Notes, regardless of
whether they present at such meeting or not. If all outstanding
Notes are owned by a single holder, no meeting of the Holders of
the Notes shall be held.


 


	


Headings


 

	

The
headings and sub-headings are for ease of reference only and shall
not affect the construction of these Terms and
Conditions.


 






  

 

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