Document:

Net 1 UEPS Technologies, Inc.: Exhibit 10.32 - Filed by newsfilecorp.com

	Exhibit 10.32 
	EXECUTION VERSION 
	 

IFC INVESTMENT NUMBER 37402 

Policy Agreement 

By and Among 

     NET 1 UEPS TECHNOLOGIES, INC.

and 

EACH OF THE INVESTORS SIGNATORY HERETO 

Dated April 11, 2016 

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 

- 2 - 

	
    ARTICLE VI 
	
    
	30 
	
      Representations and Warranties 
	30 
	
           Section 6.01.

	
      Representations and Warranties.
    
	30 
	
           Section 6.02.

	
    Investors Reliance. 
	30 
	
      
	
    
	  
	
      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.

	
      Announcements / 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 

- 3 - 

	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 
	ARTICLE VII  	31

- 4 - 

	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. 	ANNOUNCEMENTS /
      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

POLICY AGREEMENT 

POLICY AGREEMENT (this “Agreement”), dated April 11,
2016, between: 

(1)     NET 1 UEPS 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”); 

(4)     IFC Financial Institutions Growth
Fund, LP, a limited partnership formed under the laws of the United Kingdom
(“FIG”); and 

(5)     Africa Capitalization Fund, Ltd., a
Mauritius limited company (“AFCAP” and together with IFC, ALAC and FIG,
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 has severally agreed to
purchase 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 have adopted certain
operational policy requirements for their transactions and the Investors require
adherence by the Company to these specific requirements and provisions as
provided for in this Agreement as a condition of the Investors Subscription; and

(C)     Accordingly, as a condition of the
Investors’ obligations under the Subscription Agreement, the Company and the
Investors have agreed to enter into this 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); 

“AFCAP” has the meaning set forth in the preamble; 

- 2 - 

“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; 

“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; 

- 3 - 

“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; 

“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; 

“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); 

- 4 - 

“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;

- 5 - 

(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); 

(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; 

- 6 - 

“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/Su
stainability+Framework/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, 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
Put Price Per Share by the 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, 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 Trigger Event, as
      applicable; and

- 7 - 

	 	(b) 	
      in the case of a Plan Put Trigger Event, the highest
      price offered in any Bona Fide Offer;

“Put Shares” means the Investor Shares owned by any
Investor exercising its Put Option that were purchased by such Investor pursuant
to the Subscription Agreement or 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; 

“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; 

“Rule 144” means Rule 144 under the Securities Act or
any successor rule thereto; 

“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; 

- 8 - 

“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; 

- 9 - 

“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;

(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. 

- 10 - 

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). 

(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. 

- 11 - 

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. 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, 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, 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. 

- 12 - 

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

- 13 - 

		
      (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 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. 

- 14 - 

(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 Applicable 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/IFCPolic
      yDisclosureInformation.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. 

- 15 - 

(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;

	 	 	 
	 	(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.

- 16 - 

(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

	 	 	 
	 	(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. 

- 17 - 

(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. 

- 18 - 

(b)     For the
avoidance of doubt, the Company shall not issue any New Securities until after
the Notification Date.

(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 (10th) 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;

- 19 - 

	 	(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)     As soon as practicable, but in any
event no later than thirty (30) days, after the Subscription Date, the Company
shall (i) prepare and file 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 (a “Shelf 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”) and (ii) use its
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the SEC as soon as practicable thereafter. 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. 

(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. 

- 20 - 

(iii)   If (A) the Company has filed a Registration
Statement (the “Initial Registration Statement”) with the SEC that covers
Registrable Securities (the “Initial Registrable Securities”), (B)
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 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. 

- 21 - 

(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;

	 	 	 
	 	(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); 

- 22 - 

		
    (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 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; 

- 23 - 

		
      (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;
  

- 24 - 

	 	
    (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 complying 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 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. 

- 25 - 

(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 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. 

- 26 - 

(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;

- 27 - 

	 	(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 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.

- 28 - 

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”).

- 29 - 

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 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. 

- 30 - 

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’saccrued 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; 

(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.

- 31 - 

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: 

Net 1 UEPS Technologies, Inc.

President Place, 4th Floor, 
Cnr. Jan Smuts Avenue and Bolton
Road 
Rosebank, Johannesburg 2196, South Africa 
Attention: Mr. Serge C.P.
Belamant, Chief Executive Officer 
Telephone: 
Email: sergeb@net1.com

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: +1 (202) 522-3743 
Email: FinTech@ifc.org

With a copy (in the case of
communications relating to payments) sent to the attention of the Director,
Department of Financial Operations at: Facsimile: +1 (202) 522-3064 

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: amcfinance@ifc.org

- 32 - 

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: amcfinance@ifc.org

For AFCAP: 

Africa Capitalization Fund, Ltd.

2121 Pennsylvania Avenue, N.W. 
Washington, D.C. 20433 
United States
of America 
Attention: Head, Africa Capitalization Fund, Ltd. 
Email:
amcfinance@ifc.org

(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.

- 33 - 

(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.

(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. 

- 34 - 

(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). 

- 35 - 

(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 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. 

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;

- 36 - 

(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) 

- 37 - 

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.

	NET 1 UEPS TECHNOLOGIES, INC. 
	  	  
	  	  
	By: 	/s/
      Serge C.P. Belamant
	  	Name: Serge C.P. Belamant 
	  	Title: Chief Executive Officer 
	  	  
	  	  
	  	  
	INTERNATIONAL FINANCE CORPORATION 
	  	  
	  	  
	By: 	/s/ Atul Mehta    
	  	Name: Atul Mehta 
	  	Title: Global Head
	  	  
	IFC AFRICAN, LATIN AMERICAN AND CARIBBEAN FUND,
      LP 
	  	  
	By: IFC African, Latin American and Caribbean
      Fund (GP) LLC, 
	  	its general partner 
	  	  
	  	  
	By: 	/s/ Eileen M. Fargis    
	  	Name: Eileen M. Fargis 
	  	Title: Authorized Signatory
	  	  
	  	  
	IFC FINANCIAL INSTITUTIONS GROWTH FUND, LP 
	  	  
	By: IFC FIG Fund (GP), LLP, its general partner
    
	  	  
	  	  
	By: 	/s/ Timothy M. Krause    
	  	Name: Timothy M. Krause 
	  	Title: Authorized Signatory
	  	  
	AFRICA CAPITALIZATION FUND, LTD. 
	  	  
	  	  
	By: 	/s/ Sheref Zurga    
	  	Name: Sheref Zurga
	  	Title: Director

Signature Page – Policy Agreement 

- 38 - 

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. 	
      CORRUPT PRACTICES

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. 

INTERPRETATION 

	 	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 Group1 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.

_____________________________________
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. 

- 39 - 

	2. 	
      FRAUDULENT PRACTICES

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. 

INTERPRETATION 

	 	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. 	
      COERCIVE PRACTICES

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. 

INTERPRETATION 

	 	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. 	
      COLLUSIVE PRACTICES

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. 

INTERPRETATION 

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. 	
      OBSTRUCTIVE PRACTICES

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. 

- 40 - 

INTERPRETATION 

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.

GENERAL INTERPRETATION 

A person should not be liable for
actions taken by unrelated third parties unless the first party participated in
the prohibited act in question. 

- 41 - 

ANNEX B 

FORM OF ANNUAL MONITORING REPORT

INTERNATIONAL FINANCE
CORPORATION 

	• 	ENVIRONMENTAL AND SOCIAL
      PERFORMANCE 	 
	  	   ANNUAL
MONITORING REPORT (AMR) 	 

South Africa 

Net 1 UEPS Technologies, Inc. 

37402 

REPORTING PERIOD: (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

- 42 - 

	 	• 	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

- 43 - 

	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., 202 473-6154 
Email
      HBlaeute@ifc.org 	Environment 
Specialist
      

	Name: Jeff Anhang 
Telephone
      Number: 
In U.S.A., 202 473-3591 
Email JAnhang@ifc.org
      

- 44 - 

	 	• 	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 summaries2 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. 

- 45 - 

	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 	Returns to all capital providers 	Annual ROE 
	Economic
        

      Performacence 	Returns to Society 	Annual ERR 
	Access to Financial Services 	Number of EPE Transaction Accounts 
	Environm 

      ental and 

      Social
      

      Performance 	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 

- 46 - 

	 	• 	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 injuries3 	  	  	  	  	  	  
	Lost workdays4 	  	  	  	  	  	  
	Vehicle collisions5 	  	  	  	  	  	  
	Incidence6 	  	  	  	  	  	  

	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. 

- 47 - 

	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. 	
      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. 	
      Training7 for this reporting
      period

	State whether training involved 

      The
      Company employees or 
contractor employees 	Description of training 	Number of employees that
      

    attended 

	 	 	 
	 	 	 

__________________________________________
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. 

- 48 - 

	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 events8 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)
  

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

	 	• 	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.).

__________________________________________
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.

- 49 - 

	 	• 	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? 

	 	[  ]	Implemented an environmental and social
      management system (if not already established) 
		[  ]	Published an environment/sustainability or a
      corporate social responsibility report (please send copy or provide web
      link) 
	 	[  ]	Established formal and regular consultation
      with local community and other stakeholders 
	 	[  ]  	Decreased use of resources, increased emission
      controls, or increased by-product recycling 
	 	[  ]  	Worked to improve local supplier relationships
      or provided technical assistance to suppliers 
	 	[  ]	Programs to benefit the local community 
	 	[  ]	Employee programs - training, health, safety
  

If so, please offer details so we can assess your performance
beyond our compliance criteria. 

- 50 - 

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.

- 51 - 

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 
	  	  	REPUBLIC OF SOUTH 
	  	  	AFRICA 
	BARBADOS 	INDIA 	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 
	  	LAO PEOPLE'S DEMOCRATIC 	  
	CAMEROON 	REPUBLIC 	SOUTH SUDAN 
	CENTRAL AFRICAN 	  	  
	REPUBLIC 	LEBANON 	SRI LANKA 
	CHAD 	LESOTHO 	ST. KITTS AND NEVIS 
	CHILE 	LIBERIA 	ST. LUCIA 
	  	  	ST. VINCENT AND THE 
	CHINA 	LIBYA 	GRENADINES 
	 	MACEDONIA, FORMER
      YUGOSLAV   	 
	COLOMBIA 	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 

- 52 - 

	DJIBOUTI 	MEXICO 	TRINIDAD AND TOBAGO 
	 	MICRONESIA, FEDERATED
      STATES   	 
	DOMINICA 	OF 	TUNISIA 
	DOMINICAN REPUBLIC 	MOLDOVA 	TURKEY 
	ECUADOR 	MONGOLIA 	TUVALU 
	EGYPT, ARAB REPUBLIC 	  	  
	OF 	MONTENEGRO 	UGANDA 
	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 	  	  

- 53 - 

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”), IFC Financial Institutions Growth
Fund, LP, 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States
of America (“FIG”) and Africa Capitalization Fund, Ltd., 2121
Pennsylvania Avenue, N.W., Washington, D.C. 20433, United States of America
(“AFCAP” and, together with IFC, ALAC and FIG, 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 a Policy Agreement, dated April 11, 2016, 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, 
	  	 
	NET 1 UEPS TECHNOLOGIES, INC. 
	  	 
	By: 	 
		                 Name:
    
		                 Title:
      [Authorized Representative] 

Enclosure: Policy Agreement 

	cc: 	
      Director, TMT, Venture Capital & Funds
      
International Finance Corporation 
2121 Pennsylvania Avenue,
      N.W.

- 54 - 

Washington, D.C. 20433 
United
States of America 

- 55 - 

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) 

- 56 - 

SCHEDULE 3 

FORM OF PUT NOTICE 

[DATE] 

	VIA ELECTRONIC EMAIL AND COURIER
  
	  	  
	Net 1 UEPS Technologies, Inc. 
	President Place, 4th Floor, 
	Cnr. Jan Smuts Avenue and Bolton Road 
	Rosebank, Johannesburg 2196, South Africa 
	Attention: 	Serge C.P. Belamant, Chief Executive
      Officer 

Ladies and Gentlemen, 

Re: Put Notice - IFC Investment Number 37402 

1.      Please refer to the Policy
Agreement dated April 11, 2016 (the “Policy Agreement”), by and among Net
1 UEPS Technologies, Inc. (the “Company”), International Finance
Corporation (“IFC”), IFC African, Latin American and Caribbean Fund, LP
(“ALAC”), IFC Financial Institutions Growth Fund, LP (“FIG”) and
Africa Capitalization Fund, Ltd., 2121 Pennsylvania Avenue, N.W., Washington,
D.C. 20433, United States of America (“AFCAP” and, together with IFC,
ALAC and FIG, 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 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.

4.      The Put Price is [•] ($[•])
based on a Put Price Per Share of [•] ($[•]), 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. 

- 57 - 

[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.]9 

Yours truly, 

[Name of Investor] 

______________________
[AUTHORIZED SIGNATORY]

__________________________________________
9 To be included if Put Notice is being delivered in
respect of a Plan Put Trigger Event.Silver Dragon Resources Inc. - Exhibit 4.1  - Filed by newsfilecorp.com

SECURED CONVERTIBLE
PROMISSORY NOTE

	Effective Date: April 7, 2016 	U.S. $6,836,556.53 

      
     FOR VALUE RECEIVED, SILVER DRAGON RESOURCES INC.,
a Delaware corporation (“Borrower”), promises to pay to TONAQUINT, INC.,
a Utah corporation, or its successors or assigns (“Lender”),
$6,836,556.53 and any interest, fees, charges, and late fees on March 31, 2019
(the “Maturity Date”) in accordance with the terms set forth herein and
to pay interest on the Outstanding Balance at the rate of twelve percent (12%)
per annum from the Purchase Price Date until the same is paid in full. This
Secured Convertible Promissory Note (this “Note”) is issued and made
effective as of April 7, 2016 (the “Effective Date”). This Note is issued
pursuant to that certain Settlement and Securities Purchase Agreement dated
April 7, 2016, as the same may be amended from time to time, by and between
Borrower and Lender (the “Purchase Agreement”). All interest calculations
hereunder shall be computed on the basis of a 360-day year comprised of twelve
(12) thirty (30) day months, shall compound daily and shall be payable in
accordance with the terms of this Note. Certain capitalized terms used herein
are defined in Attachment 1 attached hereto and incorporated herein by
this reference. 

            Borrower
agrees to pay $20,000.00 to Lender to cover Lender’s legal fees, accounting
costs, due diligence, monitoring and other transaction costs incurred in
connection with the purchase and sale of this Note (the “Transaction Expense
Amount”), all of which amount is included in the initial principal balance
of this Note. The purchase price for this Note shall be $6,816,556.53 (the
“Purchase Price”), computed as follows: $6,836,556.53 original principal
balance, less the Transaction Expense Amount. The Purchase Price shall be
payable by Lender’s cancellation of the Prior Note (as defined in the Purchase
Agreement) and a wire transfer of immediately available funds in the amount of
the $400,000.00.

            1.       
Payment; Prepayment. Provided there is an Outstanding Balance, on each
Installment Date (as defined below), Borrower shall pay to Lender an amount
equal to the Installment Amount (as defined below) due on such Installment Date
in accordance with Section 8. The entire remaining Outstanding Balance of this
Note shall be due and payable on the Maturity Date. All payments owing hereunder
shall be in lawful money of the United States of America or Conversion Shares
(as defined below), as provided for herein, and delivered to Lender at the
address furnished to Borrower for that purpose. All payments shall be applied
first to (a) costs of collection, if any, then to (b) fees and charges, if any,
then to (c) accrued and unpaid interest, and thereafter, to (d) principal.
Notwithstanding the foregoing, Borrower may, but only with Lender’s prior
written consent, pay, without penalty, all or any portion of the Outstanding
Balance along with any accrued but unpaid interest on this Note at any time
prior to the Maturity Date.

            2.       
Security. This Note is secured by: (a) that certain Security Agreement of
even date herewith by and between Borrower and Lender, as the same may be
amended from time to time (the “Security Agreement”), whereby Borrower
granted a security interest in all of its assets in favor of Lender to secure
the performance of its obligations under this Note, as more specifically set
forth in the Security Agreement, all the terms and conditions of which are
hereby incorporated into and made a part of this Note; and (b) that certain
Pledge Agreement of even date herewith by and between Borrower and Lender, as
the same may be amended from time to time (the “Pledge Agreement”),
whereby Borrower pledged all of its right, title and interest in and to the
Sino-Top Interest to secure the performance of its obligations under this Note,
as more specifically set forth in the Pledge Agreement, all the terms and
conditions of which are hereby incorporated into and made a part of this Note

            3.       
Lender Optional Conversion. 

                      
3.1.        Lender Conversion Price.
Subject to adjustment as set forth in this Note, the conversion price for each
Lender Conversion (as defined below) shall be $0.015 (the “Lender Conversion
Price”). However, in the event the Market Capitalization falls below
$4,000,000.00 at any time, then in such event (a) the Lender Conversion Price
for all Lender Conversions occurring after the first date of such occurrence
shall equal the lower of the Lender Conversion Price and the Market Price as of
any applicable date of Conversion, and (b) the true-up provisions of Section 11
below shall apply to all Lender Conversions that occur after the first date the
Market Capitalization falls below $4,000,000.00 provided that all references to
the “Installment Notice” in Section 11 shall be replaced with references to a
“Lender Conversion Notice” for purposes of this Section 3.1, all references to
“Installment Conversion Shares” in Section 11 shall be replaced with references
to “Lender Conversion Shares” for purposes of this Section 3.1, and all
references to the “Installment Conversion Price” in Section 11 shall be replaced
with references to the “Lender Conversion Price” for purposes of this Section
3.1. 

                      3.2.       
Lender Conversions. Lender has the right at any time after the six (6)
month anniversary of the Purchase Price Date until the Outstanding Balance has
been paid in full, including without limitation during or after any Fundamental
Default Measuring Period, at its election, to convert (each instance of
conversion is referred to herein as a “Lender Conversion”) all or any
part of the Outstanding Balance into shares (“Lender Conversion Shares”)
of fully paid and non-assessable common stock, $0.0001 par value per share
(“Common Stock”), of Borrower as per the following conversion formula:
the number of Lender Conversion Shares equals the amount being converted (the
“Conversion Amount”) divided by the Lender Conversion Price. Conversion
notices in the form attached hereto as Exhibit A (each, a “Lender
Conversion Notice”) may be effectively delivered to Borrower by any method
of Lender’s choice (including but not limited to facsimile, email, mail,
overnight courier, or personal delivery), and all Lender Conversions shall be
cashless and not require further payment from Lender. Borrower shall deliver the
Lender Conversion Shares from any Lender Conversion to Lender in accordance with
Section 9 below.

                      
3.3.        Application to
Installments. Notwithstanding anything to the contrary herein, including
without limitation Section 8 hereof, Lender may, in its sole discretion, apply
all or any portion of any Lender Conversion toward any Installment Conversion
(as defined below), even if such Installment Conversion is pending, as
determined in Lender’s sole discretion, by delivering written notice of such
election (which notice may be included as part of the applicable Lender
Conversion Notice) to Borrower at any date on or prior to the applicable
Installment Date. In such event, Borrower may not elect to allocate such portion
of the Installment Amount being paid pursuant to this Section 3.3 in the manner
prescribed in Section 8.3; rather, Borrower must reduce the applicable
Installment Amount by the Conversion Amount described in this Section 3.3.

            4.       
Defaults; Remedies. 

                      
4.1.        Defaults. The following
are events of default under this Note (each, an “Event of
Default”); provided, however, that the occurrence of any event
described in Section 4.1(d) – (q) shall not be considered an Event of Default if
such event is cured within five (5) Trading Days of its occurrence: (a) Borrower
shall fail to pay any principal, interest, fees, charges, or any other amount
when due and payable hereunder; (b) Borrower shall fail to deliver any Lender
Conversion Shares in accordance with the terms hereof; (c) Borrower shall fail
to deliver any Installment Conversion Shares (as defined below) or True-Up
Shares (as defined below) in accordance with the terms hereof; (d) a receiver,
trustee or other similar official shall be appointed over Borrower or a material
part of its assets and such appointment shall remain uncontested for twenty (20)
days or shall not be dismissed or discharged within sixty (60) days; (e)
Borrower shall become insolvent or generally fails to pay, or admits in writing
its inability to pay, its debts as they become due, subject to applicable grace
periods, if any; (f) Borrower shall make a general assignment for the benefit of
creditors; (g) Borrower shall file a petition for relief under any bankruptcy,
insolvency or similar law (domestic or foreign); (h) an involuntary proceeding
shall be commenced or filed against Borrower; (i) Borrower shall fail in any
material way to observe or perform any covenant, obligation, condition or
agreement of Borrower contained herein or in any other Transaction Document (as
defined in the Purchase Agreement), other than those specifically set forth in
this Section 4.1 and Section 6 of the Purchase Agreement; (j) any
representation, warranty or other statement made or furnished by or on behalf of
Borrower to Lender herein, in any Transaction Document, or otherwise in
connection with the issuance of this Note shall be materially false, incorrect,
incomplete or misleading in any material respect when made or furnished; (k) the
occurrence of a Fundamental Transaction without Lender’s prior written consent;
(l) Borrower shall fail to put in place and maintain the Share Reserve as
required under the Purchase Agreement; (m) Borrower effectuates a reverse split
of its Common Stock without twenty (20) Trading Days prior written notice to
Lender; (n) any money judgment, writ or similar process shall be entered or
filed against Borrower or any subsidiary of Borrower or any of its property or
other assets for more than $200,000.00, and shall remain unvacated, unbonded or
unstayed for a period of twenty (20) calendar days unless otherwise consented to
by Lender; (o) Borrower shall fail to be DWAC Eligible; or (p) Borrower shall
fail to observe or perform any covenant set forth in Section 6 of the Purchase
Agreement. 

2

                      
4.2.        Remedies. At any time and
from time to time after Lender becoming aware of the occurrence of any Event of
Default, Lender may accelerate this Note by written notice to Borrower, with the
Outstanding Balance becoming immediately due and payable in cash at the
Mandatory Default Amount. Notwithstanding the foregoing, at any time following
the occurrence of any Event of Default, Lender may, at its option, elect to
increase the Outstanding Balance by applying the Default Effect (subject to the
limitation set forth below) via written notice to Borrower without accelerating
the Outstanding Balance, in which event the Outstanding Balance shall be
increased as of the date of the occurrence of the applicable Event of Default
pursuant to the Default Effect, but the Outstanding Balance shall not be
immediately due and payable unless so declared by Lender (for the avoidance of
doubt, if Lender elects to apply the Default Effect pursuant to this sentence,
it shall reserve the right to declare the Outstanding Balance immediately due
and payable at any time and no such election by Lender shall be deemed to be a
waiver of its right to declare the Outstanding Balance immediately due and
payable as set forth herein unless otherwise agreed to by Lender in writing).
Notwithstanding the foregoing, upon the occurrence of any Event of Default
described in clauses (d), (e), (f), (g) or (h) of Section 4.1, the Outstanding
Balance as of the date of acceleration shall become immediately and
automatically due and payable in cash at the Mandatory Default Amount, without
any written notice required by Lender. At any time following the occurrence of
any Event of Default, upon written notice given by Lender to Borrower, interest
shall accrue on the Outstanding Balance beginning on the date the applicable
Event of Default occurred at an interest rate equal to the lesser of 22% per
annum or the maximum rate permitted under applicable law (“Default
Interest”); provided, however, that no Default Interest shall accrue
during the Fundamental Default Measuring Period. For the avoidance of doubt,
Lender may continue making Lender Conversions at any time following an Event of
Default until such time as the Outstanding Balance is paid in full.
Additionally, following the occurrence of any Event of Default, Borrower may, at
its option, pay any Lender Conversion in cash instead of Lender Conversion
Shares by paying to Lender on or before the applicable Delivery Date (as defined
below) a cash amount equal to the number of Lender Conversion Shares set forth
in the applicable Lender Conversion Notice multiplied by the highest intra-day
trade price of the Common Stock that occurs during the period beginning on the
date the applicable Event of Default occurred and ending on the date of the
applicable Lender Conversion Notice. In connection with acceleration described
herein, Lender need not provide, and Borrower hereby waives, any presentment,
demand, protest or other notice of any kind, and Lender may immediately and
without expiration of any grace period enforce any and all of its rights and
remedies hereunder and all other remedies available to it under applicable law.
Such acceleration may be rescinded and annulled by Lender at any time prior
to payment hereunder and Lender shall have all rights as a holder
of the Note until such time, if any, as Lender receives full payment pursuant to
this Section 4.2. No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon. Nothing herein shall
limit Lender’s right to pursue any other remedies available to it at law or in
equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to Borrower’s failure to timely deliver
Conversion Shares upon Conversion of the Notes as required pursuant to the terms
hereof. 

3

                      
4.3.        Fundamental Default
Remedies. Notwithstanding anything to the contrary herein, in addition to
all other remedies set forth herein, the Fundamental Liquidated Damages Amount
shall be added to the Outstanding Balance upon Lender’s delivery to Borrower of
a notice (which notice Lender may deliver to Borrower at any time following the
occurrence of a Fundamental Default) setting forth its election to declare a
Fundamental Default and the Fundamental Liquidated Damages Amount that will be
added to the Outstanding Balance. 

                      
4.4.        Certain Additional Rights.
Notwithstanding anything to the contrary herein, in the event Borrower fails to
make any payment or otherwise to deliver any Conversion Shares as and when
required under this Note, then (a) the Lender Conversion Price for all Lender
Conversions occurring after the date of such failure to pay shall equal the
lower of the Lender Conversion Price and the Market Price as of any applicable
date of Conversion, and (b) the true-up provisions of Section 11 below shall
apply to all Lender Conversions that occur after the date of such failure to
pay, provided that all references to the “Installment Notice” in Section 11
shall be replaced with references to a “Lender Conversion Notice” for purposes
of this Section 4.4, all references to “Installment Conversion Shares” in
Section 11 shall be replaced with references to “Lender Conversion Shares” for
purposes of this Section 4.4, and all references to the “Installment Conversion
Price” in Section 11 shall be replaced with references to the “Lender Conversion
Price” for purposes of this Section 4.4. For the avoidance of doubt, Lender’s
exercise of the rights granted to it pursuant to this Section 4.4 shall not
relieve Borrower of its obligation to continue paying the Installment Amount on
all future Installment Dates. 

                      
4.5.        Cross Default. A breach or
default by Borrower of any covenant or other term or condition contained in any
Other Agreements shall, at the option of Lender, be considered an Event of
Default under this Note, in which event Lender shall be entitled (but in no
event required) to apply all rights and remedies of Lender under the terms of
this Note. 

            5.       
Unconditional Obligation; No Offset. Borrower acknowledges that this Note
is an unconditional, valid, binding and enforceable obligation of Borrower not
subject to offset, deduction or counterclaim of any kind. Borrower hereby waives
any rights of offset it now has or may have hereafter against Lender, its
successors and assigns, and agrees to make the payments or Conversions called
for herein in accordance with the terms of this Note. 

            6.       
Waiver. No waiver of any provision of this Note shall be effective unless
it is in the form of a writing signed by the party granting the waiver. No
waiver of any provision or consent to any prohibited action shall constitute a
waiver of any other provision or consent to any other prohibited action, whether
or not similar. No waiver or consent shall constitute a continuing waiver or
consent or commit a party to provide a waiver or consent in the future except to
the extent specifically set forth in writing. 

            7.       
Rights Upon Issuance of Securities.

                      
7.1.        Subsequent Equity Sales.
Except with respect to Excluded Securities, if Borrower or any subsidiary
thereof, as applicable, at any time this Note is outstanding, shall sell, issue
or grant any Common Stock, option to purchase Common Stock, right to reprice,
preferred shares convertible into Common Stock, or debt, warrants, options or other instruments
or securities to Lender or any third party which are convertible into or
exercisable for shares of Common Stock (collectively, the “Equity
Securities”), including without limitation any Deemed Issuance, at an
effective price per share less than the then effective Lender Conversion Price
(such issuance is referred to herein as a “Dilutive Issuance”), then, the
Lender Conversion Price shall be automatically reduced and only reduced to equal
such lower effective price per share. If the holder of any Equity Securities so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options, or rights per share which are issued in connection
with such Dilutive Issuance, be entitled to receive shares of Common Stock at an
effective price per share that is less than the Lender Conversion Price, such
issuance shall be deemed to have occurred for less than the Lender Conversion
Price on the date of such Dilutive Issuance, and the then effective Lender
Conversion Price shall be reduced and only reduced to equal such lower effective
price per share. Such adjustments described above to the Lender Conversion Price
shall be permanent (subject to additional adjustments under this section), and
shall be made whenever such Equity Securities are issued. Borrower shall notify
Lender, in writing, no later than the Trading Day following the issuance of any
Equity Securities subject to this Section 7.1, indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price, or
other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not Borrower provides a Dilutive
Issuance Notice pursuant to this Section 7.1, upon the occurrence of any
Dilutive Issuance, on the date of such Dilutive Issuance the Lender Conversion
Price shall be lowered to equal the applicable effective price per share
regardless of whether Borrower or Lender accurately refers to such lower
effective price per share in any Installment Notice or Lender Conversion Notice. 

4

                      
7.2.        Adjustment of Lender
Conversion Price upon Subdivision or Combination of Common Stock. Without
limiting any provision hereof, if Borrower at any time on or after the Effective
Date subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Lender Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any
provision hereof, if Borrower at any time on or after the Effective Date
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the
Lender Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7.2 shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this Section 7.2 occurs
during the period that a Lender Conversion Price is calculated hereunder, then
the calculation of such Lender Conversion Price shall be adjusted appropriately
to reflect such event. 

                     
 7.3.        Other Events. In the
event that Borrower (or any subsidiary) shall take any action to which the
provisions hereof are not strictly applicable, or, if applicable, would not
operate to protect Lender from dilution or if any event occurs of the type
contemplated by the provisions of this Section 7 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then Borrower’s board of directors shall in good faith determine and implement
an appropriate adjustment in the Lender Conversion Price so as to protect the
rights of Lender, provided that no such adjustment pursuant to this Section 7.3
will increase the Lender Conversion Price as otherwise determined pursuant to
this Section 7, provided further that if Lender does not accept such adjustments
as appropriately protecting its interests hereunder against such dilution, then
Borrower’s board of directors and Lender shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such
appropriate adjustments, whose determination shall be final and binding and
whose fees and expenses shall be borne by Borrower. 

5

            8.       
Borrower Installments. 

              
       
8.1.        Installment Conversion
Price. Subject to the adjustments set forth herein, the conversion price for
each Installment Conversion (the “Installment Conversion Price”) shall be
the lesser of (a) the Lender Conversion Price, and (b) the Market Price.

             
        
8.2.        Installment Conversions.
Beginning on December 31, 2016 and on the same day of each month thereafter
until the Maturity Date (each, an “Installment Date”), if paying in cash,
Borrower shall pay to Lender the applicable Installment Amount due on such date
subject to the provisions of this Section 8, and if paying in Installment
Conversion Shares (as defined below), Borrower shall deliver such Installment
Conversion Shares on or before the Delivery Date. Payments of each Installment
Amount may be made (a) in cash, or (b) by converting such Installment Amount
into shares of Common Stock (“Installment Conversion Shares”, and
together with the Lender Conversion Shares, the “Conversion Shares”) in
accordance with this Section 8 (each an “Installment Conversion”) per the
following formula: the number of Installment Conversion Shares equals the
portion of the applicable Installment Amount being converted divided by the
Installment Conversion Price, or (c) by any combination of the foregoing, so
long as the cash is delivered to Lender on the applicable Installment Date and
the Installment Conversion Shares are delivered to Lender on or before the
applicable Delivery Date. Notwithstanding the foregoing, Borrower will not be
entitled to elect an Installment Conversion with respect to any portion of any
applicable Installment Amount and shall be required to pay the entire amount of
such Installment Amount in cash if on the applicable Installment Date there is
an Equity Conditions Failure, and such failure is not waived in writing by
Lender. Moreover, in the event Borrower desires to pay all or any portion of any
Installment Amount in cash, it must notify Lender in writing of such election
and the portion of the applicable Installment Amount it elects to pay in cash
not more than twenty-five (25) or less than fifteen (15) Trading Days prior to
the applicable Installment Date. If Borrower fails to so notify Lender, it shall
not be permitted to elect to pay any portion of such Installment Amount in cash
unless otherwise agreed to by Lender in writing or proposed by Lender in an
Installment Notice delivered by Lender to Borrower. Notwithstanding that failure
to repay this Note in full by the Maturity Date is an Event of Default, the
Installment Dates shall continue after the Maturity Date pursuant to this
Section 8 until the Outstanding Balance is repaid in full, provided that Lender
shall, in Lender’s sole discretion, determine the Installment Amount for each
Installment Date after the Maturity Date. 

                      
8.3.        Allocation of Installment
Amounts. Subject to Section 8.2 regarding an Equity Conditions Failure, for
each Installment Date, Borrower may elect to allocate the amount of the
applicable Installment Amount between cash and via an Installment Conversion, by
email or fax delivery of a notice to Lender substantially in the form attached
hereto as Exhibit B (each, an “Installment Notice”), provided,
that to be effective, each applicable Installment Notice must be received by
Lender not more than twenty-five (25) or less than fifteen (15) Trading Days
prior to the applicable Installment Date. If Lender has not received an
Installment Notice within such time period, then Lender may prepare the
Installment Notice and deliver the same to Borrower by fax or email. Following
its receipt of such Installment Notice, Borrower may either ratify Lender’s
proposed allocation in the applicable Installment Notice or elect to change the
allocation by written notice to Lender by email or fax on or before 12:00 p.m.
New York time on the applicable Installment Date, so long as the sum of the cash
payments and the amount of Installment Conversions equal the applicable
Installment Amount, provided that Lender must approve any increase to the
portion of the Installment Amount payable in cash. If Borrower fails to notify
Lender of its election to change the allocation prior to the deadline set forth
in the previous sentence (and seek approval to increase the amount payable in
cash), it shall be deemed to have ratified and accepted the allocation set forth
in the applicable Installment Notice prepared by Lender. If neither Borrower nor
Lender prepare and deliver to the other party an Installment Notice as outlined
above, then Borrower shall be deemed to have elected that the entire Installment
Amount be converted via an Installment Conversion. Borrower acknowledges and agrees that regardless of which party
prepares the applicable Installment Notice, the amounts and calculations set
forth thereon are subject to correction or adjustment because of error, mistake,
or any adjustment resulting from an Event of Default or other adjustment
permitted under the Transaction Documents (an “Adjustment”). Furthermore,
no error or mistake in the preparation of such notices, or failure to apply any
Adjustment that could have been applied prior to the preparation of an
Installment Notice may be deemed a waiver of Lender’s right to enforce the terms
of any Note, even if such error, mistake, or failure to include an Adjustment
arises from Lender’s own calculation. Borrower shall deliver the Installment
Conversion Shares from any Installment Conversion to Lender in accordance with
Section 9 below on or before each applicable Delivery Date. 

6

            9.       
Method of Conversion Share Delivery. On or before the close of business
on the third (3rd) Trading Day following the Installment Date or the
third (3rd) Trading Day following the date of delivery of a Lender
Conversion Notice, as applicable (the “Delivery Date”), Borrower shall,
provided it is DWAC Eligible at such time, deliver or cause its transfer agent
to deliver the applicable Conversion Shares electronically via DWAC to the
account designated by Lender in the applicable Lender Conversion Notice or
Installment Notice. If Borrower is not DWAC Eligible, it shall deliver to
Lender or its broker (as designated in the Lender Conversion Notice or
Installment Notice, as applicable), via reputable overnight courier, a
certificate representing the number of shares of Common Stock equal to the
number of Conversion Shares to which Lender shall be entitled, registered in the
name of Lender or its designee. For the avoidance of doubt, Borrower has not met
its obligation to deliver Conversion Shares by the Delivery Date unless Lender
or its broker, as applicable, has actually received the certificate representing
the applicable Conversion Shares no later than the close of business on the
relevant Delivery Date pursuant to the terms set forth above. Moreover, and
notwithstanding anything to the contrary herein or in any other Transaction
Document, in the event Borrower or its transfer agent refuses to deliver any
Conversion Shares to Lender on grounds that such issuance is in violation of
Rule 144 under the Securities Act of 1933, as amended (“Rule 144”),
Borrower shall deliver or cause its transfer agent to deliver the applicable
Conversion Shares to Lender with a restricted securities legend, but otherwise
in accordance with the provisions of this Section 9. In conjunction therewith,
Borrower will also deliver to Lender a written opinion from its counsel or its
transfer agent’s counsel opining as to why the issuance of the applicable
Conversion Shares violates Rule 144.

            10.    
 Conversion Delays. If Borrower fails to deliver Conversion Shares
or True-Up Shares in accordance with the timeframes stated in Sections 9 or 11,
as applicable, Lender, at any time prior to selling all of those Conversion
Shares or True-Up Shares, as applicable, may rescind in whole or in part that
particular Conversion attributable to the unsold Conversion Shares or True-Up
Shares, with a corresponding increase to the Outstanding Balance (any returned
amount will tack back to the Purchase Price Date for purposes of determining the
holding period under Rule 144). In addition, for each Lender Conversion, in the
event that Lender Conversion Shares are not delivered by the fourth Trading Day
(inclusive of the day of the Lender Conversion), a late fee equal to the greater
of (a) $500.00 and (b) 2% of the applicable Lender Conversion Share Value
rounded to the nearest multiple of $100.00 (but in any event the cumulative
amount of such late fees for each Lender Conversion shall not exceed 200% of the
applicable Lender Conversion Share Value) will be assessed for each day after
the third Trading Day (inclusive of the day of the Lender Conversion) until
Lender Conversion Share delivery is made; and such late fee will be added to the
Outstanding Balance (such fees, the “Conversion Delay Late Fees”). For
illustration purposes only, if Lender delivers a Lender Conversion Notice to
Borrower pursuant to which Borrower is required to deliver 100,000 Lender
Conversion Shares to Lender and on the Delivery Date such Lender Conversion
Shares have a Lender Conversion Share Value of $20,000.00 (assuming a Closing
Trade Price on the Delivery Date of $0.20 per share of Common Stock), then in
such event a Conversion Delay Late Fee in the amount of $500.00 per day (the
greater of $500.00 per day and $20,000.00 multiplied by 2%, which is $400.00)
would be added to the Outstanding Balance of the Note until such Lender
Conversion Shares are delivered to Lender. For purposes of this example, if the
Lender Conversion Shares are delivered to Lender twenty (20) days
after the applicable Delivery Date, the total Conversion Delay Late Fees that
would be added to the Outstanding Balance would be $10,000.00 (20 days
multiplied by $500.00 per day). If the Lender Conversion Shares are delivered to
Lender one hundred (100) days after the applicable Delivery Date, the total
Conversion Delay Late Fees that would be added to the Outstanding Balance would
be $40,000.00 (100 days multiplied by $500.00 per day, but capped at 200% of the
Lender Conversion Share Value). 

7

            11.     
True-Up. On the date that is twenty (20) Trading Days (a “True-Up
Date”) from each date that the Installment Conversion Shares delivered by
Borrower to Lender become Free Trading, there shall be a true-up where Borrower
shall deliver to Lender additional Installment Conversion Shares (“True-Up
Shares”) if the Installment Conversion Price as of the True-Up Date is less
than the Installment Conversion Price used in the applicable Installment Notice.
In such event, Borrower shall deliver to Lender within three (3) Trading Days of
the True-Up Date (the “True-Up Share Delivery Date”) a number of True-Up
Shares equal to the difference between the number of Installment Conversion
Shares that would have been delivered to Lender on the True-Up Date based on the
Installment Conversion Price as of the True-Up Date and the number of
Installment Conversion Shares originally delivered to Lender pursuant to the
applicable Installment Notice. For the avoidance of doubt, if the Installment
Conversion Price as of the True-Up Date is higher than the Installment
Conversion Price set forth in the applicable Installment Notice, then Borrower
shall have no obligation to deliver True-Up Shares to Lender, nor shall Lender
have any obligation to return any excess Installment Conversion Shares to
Borrower under any circumstance. For the convenience of Borrower only, Lender
may, in its sole discretion, deliver to Borrower a notice (pursuant to a form of
notice substantially in the form attached hereto as Exhibit C) informing
Borrower of the number of True-Up Shares it is obligated to deliver to Lender as
of any given True-Up Date, provided that if Lender does not deliver any such
notice, Borrower shall not be relieved of its obligation to deliver True-Up
Shares pursuant to this Section 11. Notwithstanding the foregoing, if Borrower
fails to deliver any required True-Up Shares on or before any applicable True-Up
Share Delivery Date, then in such event the Outstanding Balance of this Note
will automatically increase by a sum equal to the number of True-Up Shares
deliverable as of the applicable True-Up Date multiplied by the Market Price for
the Common Stock as of the applicable True-Up Date (under Lender’s and
Borrower’s expectations that any such increase will tack back to the Purchase
Price Date for purposes of determining the holding period under Rule 144).

            12.      Sale
of Sino-Top Interest.

                      
12.1.        Upon the sale of the Sino-Top
Interest or all or substantially all of Borrower’s assets, Lender may, at its
election, cause Borrower to either (a) repay the Outstanding Balance, or (b)
redeem this Note in the amount of the Redemption Value (either (a) or (b) above,
as elected by Lender, the “Payoff Amount”). 

                      
12.2.        In furtherance of the foregoing,
at any time while this Note is outstanding, if Borrower desires to engage in any
transaction whereby the Sino-Top Interest would be sold, transferred or assigned
(the “Interest Sale”), then the following shall apply: (a) Borrower will
notify Lender in writing of the final terms and conditions of the Interest Sale
and (i) if the purchase price (in U.S. Dollars) of the Interest Sale is greater
than the Redemption Value, request a Payoff Letter from Lender, or (i) if the
purchase price (in U.S. Dollars) of the Interest Sale is less than the
Redemption Value, request Lender’s consent to the Interest Sale and a Payoff
Letter from Lender; (b) if applicable, Lender will provide the Payoff Amount by
delivering a Payoff Letter to Borrower; (c) upon the closing of the Interest
Sale, Borrower shall cause the buyer to deliver the Payoff Amount directly to
the account designated by Lender in the Payoff Letter; and (d) upon receipt of
the Payoff Amount, Lender shall promptly confirm such receipt and take any
actions reasonably necessary to release Lender’s lien on and security interest
in the Sino-Top Interest.

8

            13.       
Ownership Limitation. Notwithstanding anything to the contrary contained
in this Note or the other Transaction Documents, if at any time Lender shall or
would be issued shares of Common Stock under any of the Transaction Documents,
but such issuance would cause Lender (together with its affiliates) to
beneficially own a number of shares exceeding 9.99% of the number of shares of
Common Stock outstanding on such date (including for such purpose the shares of
Common Stock issuable upon such issuance) (the “Maximum Percentage”),
then Borrower must not issue to Lender shares of Common Stock which would exceed
the Maximum Percentage. For purposes of this section, beneficial ownership of
Common Stock will be determined pursuant to Section 13(d) of the 1934 Act. The
shares of Common Stock issuable to Lender that would cause the Maximum
Percentage to be exceeded are referred to herein as the “Ownership
Limitation Shares”. Borrower will reserve the Ownership Limitation
Shares for the exclusive benefit of Lender. From time to time, Lender may notify
Borrower in writing of the number of the Ownership Limitation Shares that may be
issued to Lender without causing Lender to exceed the Maximum Percentage. Upon
receipt of such notice, Borrower shall be unconditionally obligated to
immediately issue such designated shares to Lender, with a corresponding
reduction in the number of the Ownership Limitation Shares. By written notice to
Borrower, Lender may increase, decrease or waive the Maximum Percentage as to
itself but any such waiver will not be effective until the 61st day after
delivery thereof. The foregoing 61-day notice requirement is enforceable,
unconditional and non-waivable and shall apply to all affiliates and assigns of
Lender. 

            14.       
Payment of Collection Costs. If this Note is placed in the hands of an
attorney for collection or enforcement prior to commencing arbitration or legal
proceedings, or is collected or enforced through any arbitration or legal
proceeding, or Lender otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note, then Borrower shall pay the
costs incurred by Lender for such collection, enforcement or action including,
without limitation, attorneys’ fees and disbursements. Borrower also agrees to
pay for any costs, fees or charges of its transfer agent that are charged to
Lender pursuant to any Conversion or issuance of shares pursuant to this Note.

            15.       
Opinion of Counsel. In the event that an opinion of counsel is needed for
any matter related to this Note, Lender has the right to have any such opinion
provided by its counsel provided such counsel is reasonably acceptable to
Lender. Lender also has the right to have any such opinion provided by
Borrower’s counsel. 

            16.       
Governing Law; Venue. This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal
laws of the State of Utah, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Utah or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Utah. The provisions set forth in the Purchase Agreement
to determine the proper venue for any disputes are incorporated herein by this
reference. 

            17.       
Resolution of Disputes.

                      
17.1.        Arbitration of Disputes.
By its acceptance of this Note, each party agrees to be bound by the Arbitration
Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the
Purchase Agreement. 

                      
17.2.        Calculation Disputes.
Notwithstanding the Arbitration Provisions, in the case of a dispute as to any
Calculation (as defined in the Purchase Agreement), such dispute will be
resolved in the manner set forth in the Purchase Agreement. 

9

            18.       
Cancellation. After repayment or conversion of the entire Outstanding
Balance (including without limitation delivery of True-Up Shares pursuant to the
payment of the final Installment Amount, if applicable), this Note shall be
deemed paid in full, shall automatically be deemed canceled, and shall not be
reissued. 

            19.       
Amendments. The prior written consent of both parties hereto shall be
required for any change or amendment to this Note. 

            20.       
Assignments. Borrower may not assign this Note without the prior written
consent of Lender. This Note and any shares of Common Stock issued upon
conversion of this Note may be offered, sold, assigned or transferred by Lender
without the consent of Borrower. 

            21.       
Time is of the Essence. Time is expressly made of the essence with
respect to each and every provision of this Note and the documents and
instruments entered into in connection herewith. 

            22.       
Notices. Whenever notice is required to be given under this Note, unless
otherwise provided herein, such notice shall be given in accordance with the
subsection of the Purchase Agreement titled “Notices.” 

            23.       
Liquidated Damages. Lender and Borrower agree that in the event Borrower
fails to comply with any of the terms or provisions of this Note, Lender’s
damages would be uncertain and difficult (if not impossible) to accurately
estimate because of the parties’ inability to predict future interest rates,
future share prices, future trading volumes and other relevant factors.
Accordingly, Lender and Borrower agree that any fees, balance adjustments,
Default Interest or other charges assessed under this Note are not penalties but
instead are intended by the parties to be, and shall be deemed, liquidated
damages (under Lender’s and Borrower’s expectations that any such liquidated
damages will tack back to the Purchase Price Date for purposes of determining
the holding period under Rule 144). 

            24.       
Waiver of Jury Trial. EACH OF LENDER AND BORROWER IRREVOCABLY WAIVES ANY
AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO
ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY. 

            25.       
Voluntary Agreement. Borrower has carefully read this Note and has asked
any questions needed for Borrower to understand the terms, consequences and
binding effect of this Note and fully understand them. Borrower has had the
opportunity to seek the advice of an attorney of Borrower’s choosing, or has
waived the right to do so, and is executing this Note voluntarily and without
any duress or undue influence by Lender or anyone else. 

            26.       
Severability. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of Borrower and
Lender to the fullest extent permitted by law and the balance of this Note shall
remain in full force and effect. 

            27.       
Par Value Adjustments. If at any time Lender delivers a Lender Conversion
Notice to Borrower and as of such date the Lender Conversion Price would be less
than the Par Value, then, as liquidated damages, Borrower must pay to Lender the
Par Value Adjustment Amount in cash within one

10

(1) Trading Day of delivery of the applicable Conversion Notice
(a “Par Value Adjustment”). If Borrower does not deliver the Par Value
Adjustment Amount as required, then such amount shall automatically be added to
the Outstanding Balance. The number of Conversion Shares deliverable pursuant to
any relevant Lender Conversion Notice following a Par Value Adjustment shall be
equal to (a) the Conversion Amount, divided by (b) the Par Value. In the event
of a Par Value Adjustment, Lender will use a Lender Conversion Notice in
substantially the form attached hereto as Exhibit D. 

[Remainder of page intentionally left blank; signature page
follows]

11

            IN
WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the
Effective Date.

BORROWER: 

SILVER DRAGON
RESOURCES INC. 

 

By: /s/ Marc Hazout                                      

Name:
Marc Hazout

Title: President and CEO

ACKNOWLEDGED, ACCEPTED AND AGREED: 

LENDER: 

TONAQUINT, INC.

 

By: /s/ John M. Fife                     

       John M. Fife,
President 

[Signature Page to Secured Convertible Promissory Note]

ATTACHMENT 1
DEFINITIONS 

            For
purposes of this Note, the following terms shall have the following
meanings:

            A1.       
“Adjusted Outstanding Balance” means the Outstanding Balance of this Note
as of the date the applicable Fundamental Default occurred less any Conversion
Delay Late Fees included in such Outstanding Balance. 

            A2.       
“Approved Stock Plan” means any stock option plan which has been approved
by the board of directors of Borrower and is in effect as of the Purchase Price
Date, pursuant to which Borrower’s securities may be issued to any employee,
officer or director for services provided to Borrower. 

            A3.       
“Balance Reduction Amount” means the portion of the Outstanding Balance
that Lender elects to use to calculate the Deemed Redemption Shares;
provided, however, that Lender may not elect to use a Balance Reduction
Amount that would result in the deemed issuance of Deemed Redemption Shares that
would exceed the Share Cap.

            A4.       
“Bloomberg” means Bloomberg L.P. (or if that service is not then
reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by Lender and reasonably
satisfactory to Borrower). 

            A5.       
“Closing Bid Price” and “Closing Trade Price” means the last
closing bid price and last closing trade price, respectively, for the Common
Stock on its principal market, as reported by Bloomberg, or, if its principal
market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price (as the case may be) then the last
bid price or last trade price, respectively, of the Common Stock prior to
4:00:00 p.m., New York time, as reported by Bloomberg, or, if its principal
market is not the principal securities exchange or trading market for the Common
Stock, the last closing bid price or last trade price, respectively, of the
Common Stock on the principal securities exchange or trading market where the
Common Stock is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing bid price or last trade price, respectively, of
the Common Stock in the over-the-counter market on the electronic bulletin board
for the Common Stock as reported by Bloomberg, or, if no closing bid price or
last trade price, respectively, is reported for the Common Stock by Bloomberg,
the average of the bid prices, or the ask prices, respectively, of any market
makers for the Common Stock as reported by OTC Markets Group, Inc., and any
successor thereto. If the Closing Bid Price or the Closing Trade Price cannot be
calculated for the Common Stock on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Trade Price (as the case may be) of
the Common Stock on such date shall be the fair market value as mutually
determined by Lender and Borrower. If Lender and Borrower are unable to agree
upon the fair market value of the Common Stock, then such dispute shall be
resolved in accordance with the procedures in Section 17.2. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period. 

            A6.       
“Conversion” means a Lender Conversion under Section 3 or an Installment
Conversion under Section 8. 

            A7.       
“Conversion Factor” means 70%, subject to the following adjustments. If
at any time after the Effective Date, Borrower is not DWAC Eligible, then the
then-current Conversion Factor will automatically be reduced by 5% for all
future Conversions. If at any time after the Effective Date, the Conversion
Shares are not DTC Eligible, then the then-current Conversion Factor will
automatically be reduced by an additional 5% for all future Conversions.
Finally, in addition to the Default Effect, if any Major Default occurs after
the Effective Date, the Conversion Factor shall automatically be reduced for all
future Conversions by an additional 5% for each of the first three (3) Major
Defaults that occur after the Effective Date (for the avoidance of doubt, each
occurrence of any Major Default shall be deemed to be a separate occurrence for
purposes of the foregoing reductions in Conversion Factor, even if the same
Major Default occurs three (3) separate times). For example, the first time
Borrower is not DWAC Eligible, the Conversion Factor for future Conversions
thereafter will be reduced from 70% to 65% for purposes of this example.
Following such event, the first time the Conversion Shares are no longer DTC
Eligible, the Conversion Factor for future Conversions thereafter will be
reduced from 65% to 60% for purposes of this example. If, thereafter, there are
three (3) separate occurrences of a Major Default pursuant to Section 4.1(c),
then for purposes of this example the Conversion Factor would be
reduced by 5% for the first such occurrence, and so on for each of the second
and third occurrences of such Major Default. 

Attachment 1 to Secured Convertible Promissory Note, Page 1

            A8.       
“Deemed Issuance” means an issuance of Common Stock that shall be deemed
to have occurred on the latest possible permitted date pursuant to the terms
hereof in the event Borrower fails to deliver Conversion Shares as and when
required pursuant to Section 9 of the Note. For the avoidance of doubt, if
Borrower has elected or is deemed under Section 8.3 to have elected to pay an
Installment Amount in Installment Conversion Shares and fails to deliver such
Installment Conversion Shares, such failure shall be considered a Deemed
Issuance hereunder even if an Equity Conditions Failure exists at that time or
other relevant date of determination. 

            A9.       
“Deemed Redemption Shares” means the number of shares of Common Stock
Lender would be deemed to receive upon exercise of its redemption right set
forth in Section 12 above calculated as follows: the Balance Reduction Amount
divided by the Redemption Conversion Price.

            A10.       
“Default Effect” means multiplying the Outstanding Balance as of the date
the applicable Event of Default occurred by (a) 15% for each occurrence of any
Major Default, or (b) 5% for each occurrence of any Minor Default, and then
adding the resulting product to the Outstanding Balance as of the date the
applicable Event of Default occurred, with the sum of the foregoing then
becoming the Outstanding Balance under this Note as of the date the applicable
Event of Default occurred; provided that the Default Effect may only be applied
to the first three (3) Major Defaults hereunder and to the first three (3) Minor
Defaults hereunder; and provided further that the Default Effect shall not apply
to any Event of Default pursuant to Section 4.1(b) hereof. 

            A11.       
“DTC” means the Depository Trust Company or any successor thereto.

            A12.       
“DTC Eligible” means, with respect to the Common Stock, that such Common
Stock is eligible to be deposited in certificate form at the DTC, cleared and
converted into electronic shares by the DTC and held in the name of the clearing
firm servicing Lender’s brokerage firm for the benefit of Lender. 

            A13.       
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer
program. 

            A14.       
“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system. 

            A15.       
“DWAC Eligible” means that (a) Borrower’s Common Stock is eligible at DTC
for full services pursuant to DTC’s operational arrangements, including without
limitation transfer through DTC’s DWAC system, (b) Borrower has been approved
(without revocation) by DTC’s underwriting department, (c) Borrower’s transfer
agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares
are otherwise eligible for delivery via DWAC; (e) Borrower has previously
delivered all Conversion Shares to Lender via DWAC; and (f) Borrower’s transfer
agent does not have a policy prohibiting or limiting delivery of the Conversion
Shares via DWAC. 

            A16.       
“Equity Conditions Failure” means that any of the following conditions
has not been satisfied during any applicable Equity Conditions Measuring Period
(as defined below): (a) with respect to the applicable date of determination all
of the Conversion Shares would be freely tradable under Rule 144 or without the
need for registration under any applicable federal or state securities laws (in
each case, disregarding any limitation on conversion of this Note); (b) on each
day during the period beginning one month prior to the applicable date of
determination and ending on and including the applicable date of determination
(the “Equity Conditions Measuring Period”), the Common Stock is listed or
designated for quotation (as applicable) on any of NYSE, NASDAQ, OTCQX, or OTCQB
(each, an “Eligible Market”) and shall not have been suspended from
trading on any such Eligible Market (other than suspensions of not more than two
(2) Trading Days and occurring prior to the applicable date of determination due
to business announcements by Borrower); (c) on each day during the Equity
Conditions Measuring Period, Borrower shall have delivered all shares of Common
Stock issuable upon conversion of this Note on a timely basis as set forth in
Section 9 hereof and all other shares of capital stock required to be delivered
by Borrower on a timely basis as set forth in the other Transaction Documents;
(d) any shares of Common Stock to be issued in connection with the event
requiring determination may be issued in full without violating Section 12
hereof (Lender acknowledges that Borrower shall be entitled to assume that this
condition has been met for all purposes hereunder absent written notice from
Lender); (e) any shares of Common Stock to be issued in connection with the
event requiring determination may be issued in full without violating the rules
or regulations of the Eligible Market on which the Common Stock is then listed
or designated for quotation (as applicable); (f) on each day during the Equity
Conditions Measuring Period, no public announcement of a pending, proposed or
intended Fundamental Transaction shall have occurred which has not been
abandoned, terminated or consummated;

Attachment 1 to Secured Convertible Promissory Note, Page 2

(g) Borrower shall have no knowledge of any fact that would
reasonably be expected to cause any of the Conversion Shares to not be freely
tradable without the need for registration under any applicable state securities
laws (in each case, disregarding any limitation on conversion of this Note); (h)
on each day during the Equity Conditions Measuring Period, Borrower otherwise
shall have been in material compliance with each, and shall not have breached
any, term, provision, covenant, representation or warranty of any Transaction
Document; (i) without limiting clause (j) above, on each day during the Equity
Conditions Measuring Period, there shall not have occurred an Event of Default
or an event that with the passage of time or giving of notice would constitute
an Event of Default; (k) on each Installment Date, the average and median daily
dollar volume of the Common Stock on its principal market for the previous
twenty (20) Trading Days shall be greater than $2,500.00 (l) the ten (10) day
average VWAP of the Common Stock is greater than $0.005, and (m) the Common
Stock shall be DWAC Eligible as of each applicable Installment Date or other
date of determination. 

           
A17.        “Excluded Securities”
means any shares of Common Stock, options, or convertible securities issued or
issuable in connection with any Approved Stock Plan; provided that the
option term, exercise price or similar provisions of any issuances pursuant to
such Approved Stock Plan are not amended, modified or changed on or after the
Purchase Price Date. 

            A18.       
“Free Trading” means that (a) the shares or certificate(s) representing
the applicable shares of Common Stock have been cleared and approved for public
resale by the compliance departments of Lender’s brokerage firm and the clearing
firm servicing such brokerage, and (b) such shares are held in the name of the
clearing firm servicing Lender’s brokerage firm and have been deposited into
such clearing firm’s account for the benefit of Lender. 

            A19.       
“Fundamental Default” means that Borrower either fails to pay the entire
Outstanding Balance to Lender on or before the Maturity Date or fails to pay the
Mandatory Default Amount within three (3) Trading Days of the date Lender
delivers any notice of acceleration to Borrower pursuant to Section 4.2 of this
Note. 

            A20.       
“Fundamental Default Conversion Value” means the Adjusted Outstanding
Balance multiplied by the highest Fundamental Default Ratio that occurs during
the Fundamental Default Measuring Period. 

            A21.       
“Fundamental Default Measuring Period” means a number of months equal to
the Outstanding Balance as of the date the Fundamental Default occurred divided
by the Installment Amount, with such number being rounded up to the next whole
month; provided, however, that if Borrower repays the entire Outstanding
Balance prior to the conclusion of the Fundamental Default Measuring Period, the
Fundamental Default Measuring Period shall end on the date of repayment. For
illustration purposes only, if the Outstanding Balance were equal to $125,000.00
as of the date a Fundamental Default occurred and if the Installment Amount were
$28,500.00, then the Fundamental Default Measuring Period would equal five (5)
months calculated as follows: $125,000.00/ $28,500.00 equals 4.386, rounded up
to five (5). 

            A22.       
“Fundamental Default Ratio” means a ratio that will be calculated on each
Trading Day during the Fundamental Default Measuring Period by dividing the
Closing Trade Price for the Common Stock on a given Trading Day by the Lender
Conversion Price (as adjusted pursuant to the terms hereof) in effect for such
Trading Day. 

            A23.       
“Fundamental Liquidated Damages Amount” means the greater of (a) (i) the
quotient of the Outstanding Balance on the date the Fundamental Default occurred
divided by the then-current Conversion Factor, minus (ii) the Outstanding
Balance on the date the Fundamental Default occurred, or (b) the Fundamental
Default Conversion Value. 

            A24.       
“Fundamental Transaction” means that (a) (i) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
consolidate or merge with or into (whether or not Borrower or any of its
subsidiaries is the surviving corporation) any other person or entity, or (ii)
Borrower or any of its subsidiaries shall, directly or indirectly, in one or
more related transactions, sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of its respective properties or
assets to any other person or entity, or (iii) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions,
allow any other person or entity to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
voting stock of Borrower (not including any shares of voting stock of Borrower
held by the person or persons making or party to, or associated or affiliated
with the persons or entities making or party to, such purchase, tender or
exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, consummate a stock or share
purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with any other person or
entity whereby such other person or entity acquires more than 50% of the
outstanding shares of voting stock of Borrower (not including any shares of
voting stock of Borrower held by the other persons or entities making or party
to, or associated or affiliated with the other persons or entities making or
party to, such stock or share purchase agreement or other business combination),
or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one
or more related transactions, reorganize, recapitalize or reclassify the Common
Stock, other than an increase in the number of authorized shares of Borrower’s
Common Stock, or (b) any “person” or “group” (as these terms are used for
purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and
regulations promulgated thereunder) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of
the aggregate ordinary voting power represented by issued and outstanding voting
stock of Borrower, or (vi) a change in the composition Borrower’s board of
directors occurs whereby fewer than a majority of the members of Borrower’s
board of directors are Incumbent Directors (for example, if there are currently
four (4) members of Borrower’s board of directors, then a Fundamental
Transaction shall have occurred if two (2) such Incumbent Directors are replaced
with directors who are not Incumbent Directors and the number of members of the
board of directors remains at four (4); likewise, if the number of members of
the board of directors is increased to eight (8), then a Fundamental Transaction
will also have occurred even if four (4) of such directors are Incumbent
Directors). 

Attachment 1 to Secured Convertible Promissory Note, Page 3

            A25.       
“Incumbent Directors” means members of Borrower’s board of directors who
either (i) are directors as of the Effective Date, or (ii) are elected, or
nominated for election, to Borrower’s board of directors with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to Borrower). 

            A26.       
“Installment Amount” means $100,000.00.

            A27.       
“Lender Conversion Share Value” means the product of the number of Lender
Conversion Shares deliverable pursuant to any Lender Conversion multiplied by
the Closing Trade Price of the Common Stock on the Delivery Date for such Lender
Conversion. 

            A28.       
“Major Default” means any Event of Default occurring under Sections
4.1(a) (payments), 4.1(c) (delivery of Installment Conversion Shares or True-Up
Shares), 4.1(l) (Share Reserve), or 4.1(p) (breach of certain covenants) of this
Note. 

            A29.       
“Mandatory Default Amount” means the greater of (a) the Outstanding
Balance divided by the Installment Conversion Price on the date the Mandatory
Default Amount is demanded, multiplied by the VWAP on the date the Mandatory
Default Amount is demanded, or (b) the Outstanding Balance following the
application of the Default Effect. 

           
A30.        “Market Capitalization”
means the product equal to (a) the average VWAP of the Common Stock for the
immediately preceding fifteen (15) Trading Days, multiplied by (b) the aggregate
number of outstanding shares of Common Stock as reported on Borrower’s most
recently filed Form 10-Q or Form 10-K. 

            A31.       
“Market Price” means the Conversion Factor multiplied by the average of
the ten (10) lowest Closing Bid Prices in the twenty (20) Trading Days
immediately preceding the applicable Conversion. 

            A32.       
“Minor Default” means any Event of Default that is not a Major Default or
a Fundamental Default. 

            A33.       
“Optional Prepayment Liquidated Damages Amount” means an amount equal to
the difference between (a) the product of (i) the number of shares of Common
Stock obtained by dividing (1) the applicable Optional Prepayment Amount by (2)
the Lender Conversion Price as of the date Borrower delivered the applicable
Optional Prepayment Amount to Lender, multiplied by (ii) the Closing Trade Price
of the Common Stock on the date Borrower delivered the applicable Optional
Prepayment Amount to Lender, and (b) the applicable Optional Prepayment Amount
paid by Borrower to Lender. For illustration purposes only, if the applicable
Optional Prepayment Amount were $50,000.00, the Lender Conversion Price as of
the date the Optional Prepayment Amount was paid to Lender was equal to $0.75
per share of Common Stock, and the Closing Trade Price of a share of Common
Stock as of such date was equal to $1.00, then the Optional Prepayment
Liquidated Damages Amount would equal $16,666.67 computed as follows: (a)
$66,666.67 (calculated as (i) (1) $50,000.00 divided by (2) $0.75 multiplied by
(ii) $1.00) minus (b) $50,000.00. 

Attachment 1 to Secured Convertible Promissory Note, Page 4

           
A34.        “Other Agreements” means,
collectively, (a) all existing and future agreements and instruments between,
among or by Borrower (or an affiliate), on the one hand, and Lender (or an
affiliate), on the other hand, and (b) any financing agreement or a material
agreement that affects Borrower’s ongoing business operations. 

            A35.       
“Outstanding Balance” means as of any date of determination, the Purchase
Price, as reduced or increased, as the case may be, pursuant to the terms hereof
for payment, Conversion, offset, or otherwise, plus the Transaction Expense
Amount, accrued but unpaid interest, collection and enforcements costs
(including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and
similar taxes and fees related to Conversions, and any other fees or charges
(including without limitation Conversion Delay Late Fees) incurred under this
Note. 

            A36.       
“Payoff Letter” means the letter sent by Lender to Borrower with the
Payoff Amount and wire transfer instructions.

            A37.       
“Par Value” means the par value of the Common Stock on any relevant date
of determination. The Par Value as of the Effective Date is $0.0001. 

            A38.       
“Par Value Adjustment Amount” means an amount calculated as follows: (a)
the number of Lender Conversion Shares deliverable under a particular Lender
Conversion Notice (prior to any Par Value Adjustment) multiplied by the Par
Value, less (b) the Conversion Amount (prior to any Par Value Adjustment), plus
(c) $500.00. For illustration purposes only, if for a given Conversion, the
Conversion Amount was $20,000.00, the Conversion Price was $0.0008 and the Par
Value was $0.001 then the Par Value Adjustment Amount would be $5,500.00
(25,000,000 Conversion Shares ($20,000.00/ $0.0008) multiplied by the Par Value
of $0.001 ($25,000.00) minus the Conversion Amount of $20,000.00 plus $500.00
equals $5,500.00) . 

            A39.       
“Purchase Price Date” means the date the Purchase Price is delivered by
Lender to Borrower.

            A40.       
“Redemption Amount” means the Deemed Redemption Shares multiplied by the
highest intra-day trading price of the Common Stock in the sixty (60)
consecutive Trading Days prior to Lender’s delivery of a Payoff Letter;
provided, however, that in no event shall the Redemption Amount exceed
three (3) times the Balance Reduction Amount.

            A41.       
“Redemption Conversion Price” means 70% of the lowest intra-day trading
price of the Common Stock for the sixty (60) consecutive Trading Days prior to
the date Lender delivers the Payoff Letter.

           
A42.        “Redemption Outstanding
Balance” means the Outstanding Balance less the Balance Reduction
Amount.

            A43.       
“Redemption Value” means the Redemption Amount plus the Redemption
Outstanding Balance. A44. “Sino-Top” means Sanhe Sino-Tip Resources &
Technologies, Ltd., a Chinese foreign cooperative joint venture.

            A45.       
“Sino-Top Interest” means all equity interests held by Borrower in
Sino-Top or any other claims, rights or interests Borrower has in or against
Sino-Top.

           
A46.        “Share Cap” means
150,000,000 Deemed Redemption Shares.

           
A47.        “Trading Day” means any
day on which the New York Stock Exchange is open for trading. A48. “VWAP”
means the volume weighted average price of the Common stock on the principal
market for a particular Trading Day or set of Trading Days, as the case may be,
as reported by Bloomberg.

Attachment 1 to Secured Convertible Promissory Note, Page 5

EXHIBIT A 

Tonaquint, Inc. 
303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601 

	Silver Dragon Resources Inc. 	Date:
______________________
	Attn: Marc Hazout, CEO 	  
	200 Davenport Road 	  
	Toronto, ONT M5R 1J2 Canada 	  

LENDER CONVERSION NOTICE 

            The
above-captioned Lender hereby gives notice to Silver Dragon Resources Inc., a
Delaware corporation (the “Borrower”), pursuant to that certain Secured
Convertible Promissory Note made by Borrower in favor of Lender on April 7, 2016
(the “Note”), that Lender elects to convert the portion of the Note
balance set forth below into fully paid and non-assessable shares of Common
Stock of Borrower as of the date of conversion specified below. Said conversion
shall be based on the Lender Conversion Price set forth below. In the event of a
conflict between this Lender Conversion Notice and the Note, the Note shall
govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Lender Conversion Notice to conform
to the Note. Capitalized terms used in this notice without definition shall have
the meanings given to them in the Note. 

	 	A. 	
      Date of Conversion: ____________

	 	B. 	
      Lender Conversion #: ____________

	 	C. 	
      Conversion Amount: ____________

	 	D. 	
      Lender Conversion Price: _______________

	 	E. 	
      Lender Conversion Shares: _______________(C divided by
      D)

	 	F. 	
      Remaining Outstanding Balance of Note:
    ____________*

* Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the
Purchase Agreement), the terms of which shall control in the event of any
dispute between the terms of this Lender Conversion Notice and such Transaction
Documents. 

$_________________ of the Conversion Amount converted hereunder
shall be deducted from the Installment Amount(s) relating to the following
Installment Date(s): __________________________________________. 

Please transfer the Lender Conversion Shares
electronically (via DWAC) to the following account: 

	Broker: ______________________________________	Address:   
      ______________________________________
	DTC#: _______________________________________	                    ______________________________________
	Account #: ___________________________________	                    ______________________________________ 
    
	Account Name: ________________________________	  

     To the extent the Lender
Conversion Shares are not able to be delivered to Lender electronically via the
DWAC system, deliver all such certificated shares to Lender via reputable
overnight courier after receipt of this Lender Conversion Notice (by facsimile
transmission or otherwise) to: 

_____________________________________

_____________________________________

_____________________________________

Exhibit A to Secured Convertible Promissory Note, Page 1 

Sincerely, 

Lender:

TONAQUINT, INC.

 

By:
_________________________
       John M. Fife,
President 

Exhibit A to Secured Convertible Promissory Note, Page 2 

EXHIBIT B 

Silver Dragon Resources Inc. 
200 Davenport Road 
Toronto,
ONT M5R 1J2 Canada 

	Tonaquint, Inc. 	Date:
______________________
	Attn: John Fife 	  
	303 East Wacker Drive, Suite 1040 	  
	Chicago, Illinois 60601 	  

INSTALLMENT NOTICE 

The above-captioned Borrower hereby gives notice to Tonaquint,
Inc., a Utah corporation (the “Lender”), pursuant to that certain Secured
Convertible Promissory Note made by Borrower in favor of Lender on April 7, 2016
(the “Note”), of certain Borrower elections and certifications related to
payment of the Installment Amount of $_________________ due on ___________, 201_
(the “Installment Date”). In the event of a conflict between this
Installment Notice and the Note, the Note shall govern, or, in the alternative,
at the election of Lender in its sole discretion, Lender may provide a new form
of Installment Notice to conform to the Note. Capitalized terms used in this
notice without definition shall have the meanings given to them in the Note.

INSTALLMENT CONVERSION AND CERTIFICATIONS

AS OF THE INSTALLMENT DATE 

A.       
INSTALLMENT CONVERSION 

	 	A. 	
      Installment Date: ____________, 201_

	 	B. 	
      Installment Amount: ____________

	 	C. 	
      Portion of Installment Amount to be Paid in Cash:
      ____________

	 	D. 	
      Portion of Installment Amount to be Converted into Common
      Stock: ____________(B minus C)

	 	E. 	
      Installment Conversion Price: _______________(lower of
      (i) Lender Conversion Price in effect and (ii) Market Price as of
      Installment Date)

	 	F. 	
      Installment Conversion Shares: _______________(D divided
      by E)

	 	G. 	
      Remaining Outstanding Balance of Note:
    ____________*

* Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the
Purchase Agreement), the terms of which shall control in the event of any
dispute between the terms of this Installment Notice and such Transaction
Documents. 

B.       
EQUITY CONDITIONS CERTIFICATION 

	1. 	
      Market
Capitalization:________________

(Check One) 

	2. 	
      _________ Borrower herby certifies that no Equity
      Conditions Failure exists as of the Installment Date.

	 	 
	3. 	
      _________ Borrower hereby gives notice that an Equity
      Conditions Failure has occurred and requests a waiver from Lender with
      respect thereto. The Equity Conditions Failure is as
  follows:

Exhibit B to Secured Convertible Promissory Note, Page 1 

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

Sincerely, Borrower: 

SILVER DRAGON RESOURCES
INC. 

 

By: ______________________________________

Name: ____________________________________

Title: _____________________________________

 

ACKNOWLEDGED AND CERTIFIED BY: 

Lender: 

TONAQUINT, INC.

 

By:
_________________________
       John M. Fife,
President 

Exhibit B to Secured Convertible Promissory Note, Page 2 

EXHIBIT C 

Tonaquint, Inc. 
303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601 

	Silver Dragon Resources Inc. 	Date:
  _______________________
	Attn: Marc Hazout, CEO 	  
	200 Davenport Road 	  
	Toronto, ONT M5R 1J2 Canada 	  

TRUE-UP NOTICE 

The above-captioned Lender hereby gives notice to Silver Dragon
Resources Inc., a Delaware corporation (the “Borrower”), pursuant to that
certain Secured Convertible Promissory Note made by Borrower in favor of Lender
on April 7, 2016 (the “Note”), of True-Up Conversion Shares related to
_____________, 201_ (the “Installment Date”). In the event of a conflict
between this True-Up Notice and the Note, the Note shall govern, or, in the
alternative, at the election of Lender in its sole discretion, Lender may
provide a new form of True-Up Notice to conform to the Note. Capitalized terms
used in this notice without definition shall have the meanings given to them in
the Note. 

TRUE-UP CONVERSION SHARES AND
CERTIFICATIONS 
AS OF THE TRUE-UP DATE

1.       
TRUE-UP CONVERSION SHARES 

	 	A. 	
      Installment Date: ____________, 201_

	 	 	 
	 	B. 	
      True-Up Date: ____________, 201_

	 	 	 
	 	C. 	
      Portion of Installment Amount Converted into Common
      Stock: _____________

	 	 	 
	 	D. 	
      True-Up Conversion Price: _______________(lower of (i)
      Lender Conversion Price in effect and (ii) Market Price as of True-Up
      Date)

	 	 	 
	 	E. 	
      True-Up Conversion Shares: _______________(C divided by
      D)

	 	 	 
	 	F. 	
      Installment Conversion Shares Delivered:
      ________________

	 	 	 
	 	G. 	
      True-Up Conversion Shares to be Delivered:
      ________________(only applicable if E minus F is greater than
  zero)

2.       EQUITY
CONDITIONS CERTIFICATION (Section to be completed by Borrower) 

	A. 	
      Market
Capitalization:________________

(Check One) 

	B. 	
      _________ Borrower herby certifies that no Equity
      Conditions Failure exists as of the applicable True-Up
  Date.

Exhibit C to Secured Convertible Promissory Note, Page 1 

	C. 	
      _________ Borrower hereby gives notice that an Equity
      Conditions Failure has occurred and requests a waiver from Lender with
      respect thereto. The Equity Conditions Failure is as
  follows:

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

_________________________________________________________________________________

Sincerely, 

Lender:

TONAQUINT, INC.

By:
_________________________
       John M. Fife,
President 

Exhibit C to Secured Convertible Promissory Note, Page 2 

EXHIBIT D 

Tonaquint, Inc. 
303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601 

	Silver Dragon Resources Inc. 	Date:
  _________________________
	Attn: Marc Hazout, CEO 	  
	200 Davenport Road 	  
	Toronto, ONT M5R 1J2 Canada 	  

LENDER CONVERSION NOTICE 

The above-captioned Lender hereby gives notice to Silver
Dragon Resources Inc., a Delaware corporation (the “Borrower”), pursuant
to that certain Secured Convertible Promissory Note made by Borrower in favor of
Lender on April 7, 2016 (the “Note”), that Lender elects to convert the
portion of the Note balance set forth below into fully paid and non-assessable
shares of Common Stock of Borrower as of the date of conversion specified below.
Said conversion shall be based on the Conversion Price set forth below. In the
event of a conflict between this Conversion Notice and the Note, the Note shall
govern, or, in the alternative, at the election of Lender in its sole
discretion, Lender may provide a new form of Conversion Notice to conform to the
Note. Capitalized terms used in this notice without definition shall have the
meanings given to them in the Note. 

	 	A. 	
      Date of Conversion: ____________

	 	B. 	
      Lender Conversion #: ____________

	 	C. 	
      Conversion Amount: ____________

	 	D. 	
      Par Value Adjustment Amount: _______________

	 	E. 	
      Lender Conversion Price: _______________(Par
  Value)

	 	F. 	
      Lender Conversion Shares: _______________(C divided by
      E)

	 	G. 	
      Remaining Outstanding Balance of Note:
    ____________*

* Subject to adjustments for corrections, defaults, interest
and other adjustments permitted by the Transaction Documents (as defined in the
Purchase Agreement), the terms of which shall control in the event of any
dispute between the terms of this Lender Conversion Notice and such Transaction
Documents. 

$_________________ of the Conversion Amount converted hereunder
shall be deducted from the Installment Amount(s) relating to the following
Installment Date(s): __________________________________________
. 

Please transfer the Lender Conversion Shares
electronically (via DWAC) to the following account: 

	Broker: ____________________________________	Address:              
      __________________________________
	DTC#: ____________________________________	                               __________________________________
	Account #: _________________________________	                               __________________________________ 
    
	Account Name: ______________________________	  

To the extent the Lender Conversion Shares are not able to be
delivered to Lender electronically via the DWAC system, deliver all such
certificated shares to Lender via reputable overnight courier after receipt of
this Lender Conversion Notice (by facsimile transmission or otherwise) to: 

_____________________________________

_____________________________________

_____________________________________ 

Exhibit D to Secured Convertible Promissory Note, Page 1 

The Par Value Adjustment Amount must be paid in cash within one
(1) Trading Day of your receipt of this Conversion Notice. 

Sincerely, 

Lender:

TONAQUINT,
INC.

 

By:
_________________________
       John M. Fife,
President 

Exhibit D to Secured Convertible Promissory Note, Page 2

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