Document:

Net 1 UEPS Technologies, Inc.: Exhibit 10.102 - Filed by newsfilecorp.com

    
        
            Exhibit 10.102

        

        SHARE SALE AND SUBSCRIPTION AGREEMENT

        between

        JAA HOLDINGS PROPRIETARY LIMITED

        PK GAIN INVESTMENT HOLDINGS PROPRIETARY LIMITED

        NET1 APPLIED TECHNOLOGIES SOUTH AFRICA PROPRIETARY LIMITED

        AJD HOLDINGS PROPRIETARY LIMITED

        RICHMARK HOLDINGS PROPRIETARY LIMITED

        and

        DNI-4PL CONTRACTS PROPRIETARY LIMITED

        
            

        

    

    

    
        

            26 February 2019

        

        TABLE OF CONTENTS

	PART 1 -
      PRELIMINARY MATTERS 	1
    
	1 	PARTIES 	1 
	2 	INTERPRETATION 	1
    
	3 	INTRODUCTION 	6 
	4 	CONDITIONS
      PRECEDENT 	6
    
	PART 2 - SALE PROVISIONS
      	7 
	5 	TRANSACTION STEPS 	7
    
	6 	JAA SALE 	7 
	7 	PURCHASE
      CONSIDERATION AND SETTLEMENT 	8
    
	8 	JAA CLOSING 	8 
	9 	PKG
      SALE 	8
    
	10 	PURCHASE CONSIDERATION
      AND SETTLEMENT 	9 
	11 	PKG
      CLOSING 	9
    
	PART 3 - SUBSCRIPTION
      PROVISIONS 	9 
	12 	JAA
      SUBSCRIPTION 	9
    
	13 	PKG SUBSCRIPTION
    	10 
	14 	TSPC
      DEBT 	10
      
	15 	CESSION 	11 
	PART 4 -
      GENERAL MATTERS 	11
      
	16 	CONSENT 	11 
	17 	WAIVER 	11
      
	18 	WARRANTIES BY NET1
      	11 
	19 	GENERAL
      WARRANTIES 	12
      
	20 	SUPPORT 	13 
	21 	BREACH 	13

      
	22 	DISPUTE RESOLUTION
      	14 
	23 	NOTICES
      AND DOMICILIA 	15
      
	24 	BENEFIT OF THE
      AGREEMENT 	17 
	25 	APPLICABLE LAW AND JURISDICTION 	17
      
	26 	GENERAL 	17 
	27 	COSTS
      	18
      
	28 	SIGNATURE 	18

CLIFFE DEKKER HOFMEYR

    

    

    
        
            1

        

        part 1 - preliminary matters

        1 PARTIES

        1.1 The Parties to this Agreement are -

        1.1.1 JAA Holdings Proprietary Limited;  

        1.1.2 PK Gain Investment Holdings Proprietary Limited;

        1.1.3 Net1 Applied Technologies South Africa Proprietary Limited;

        1.1.4 AJD Holdings Proprietary Limited;

        1.1.5 Richmark Holdings Proprietary Limited; and

        1.1.6 DNI-4PL Contracts Proprietary Limited.

        1.2 The Parties agree as set out below.

        2 INTERPRETATION

        2.1 In this Agreement, unless the context indicates a contrary intention, the following words and expressions bear the meanings assigned to them and cognate expressions bear corresponding meanings -

        2.1.1 "Additional Subscription Agreement" means an agreement headed "Additional Subscription Agreement" entered into between Net1, AJD, Richmark and the Company on 23 June 2017, as amended by a first addendum thereto on or about 8 March 2018, a second addendum thereto on or about 29 October 2018 and the Third Addendum to the Additional Subscription Agreement;

        2.1.2 "Agreement" means the agreement contained in this document, including all annexures (if any) hereto;

        2.1.3 "AJD" means AJD Holdings Proprietary Limited, registration number 1975/004328/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.4 "Company" means DNI-4PL Contracts Proprietary Limited, registration number 2005/040937/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.5 "Companies Act" means the Companies Act, No 71 of 2008;

        2.1.6 "Conditions Precedent" means the suspensive conditions set out in clause 4;

        2.1.7 "Closing Date" means the first business day after all of the Conditions Precedent have been fulfilled or waived in accordance with clause 4;

CLIFFE DEKKER HOFMEYR

    

    

    
        
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        2.1.8 "CTA" means an agreement headed "Common Terms Agreement" entered into between, inter alia, Net1, FirstRand Bank Limited (acting through its Rand Merchant Bank Division) as Lender, Lead Arranger and Facility Agent, Nedbank Limited (acting through its Corporate and Investment Banking Division) in terms of which, inter alia, the parties agree the terms common to the Senior A Facility Agreement, Senior B Facility Agreement and Senior C Facility Agreement (all as defined therein);

        2.1.9 "Distribution" means any distribution whatsoever to shareholders, including distribution by way of dividends (including dividends in specie), capital reduction, share repurchases, fees, interest payments, royalties, repayment of loan accounts and the like;

        2.1.10 "JAA" means JAA Holdings Proprietary Limited, registration number 2018/223075/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.11 "JAA Closing" means the completion of all matters set out in clause 7;

        2.1.12 "JAA Purchase Consideration" shall have the meaning given to such term at clause 7.1;

        2.1.13 "JAA Sale Claim" shall have the meaning given to such term at clause 7.2;

        2.1.14 "JAA Sale Shares" means 13,192,000 ordinary "A" no par value shares in the issued ordinary "A" shares of the Company, constituting an approximate Participation Interest of 13.19% and an approximate Voting Interest 13.19% as at the Signature Date and at the Closing Date;

        2.1.15 "JAA Subscription Price" means 77.6% of the value of the TSPC Debt;

        2.1.16 "JAA Subscription Shares" means 776 ordinary "A" no par value shares in the issued ordinary "A" shares of the Company, constituting an approximate Participation Interest of 0.000776% and an approximate Voting Interest of 0.000776%;

        2.1.17 "JAA Transaction" means the transaction contemplated at clauses 6, 7 and 8;

        2.1.18 "Net1" means Net1 Applied Technologies South Africa Proprietary Limited, registration number 2002/031446/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.19 "Participation Interest" means the rights which a shareholder in the Company has to generally participate in Distributions made by the Company (on account of the shares held by that shareholder in the Company from time to time and having regard to all shares in the Company then in issue) expressed as a percentage;

        2.1.20 "Parties" means the parties to this Agreement;

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        2.1.21 "PKG" means PK Gain Investment Holdings Proprietary Limited, registration number 2006/005036/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.22 "PKG Closing" means the completion of all matters set out in clause 11;

        2.1.23 "PKG Purchase Consideration" shall have the meaning given to such term at clause 10.1;

        2.1.24 "PKG Sale Claim" shall have the meaning given to such term at clause 10.2;

        2.1.25 "PKG Sale Shares" means 3,808,000 ordinary "A" no par value shares in the issued ordinary "A" shares of the Company, constituting an approximate Participation Interest of 3.81% and an approximate Voting Interest of 3.81% as at the Signature Date and at the Closing Date;

        2.1.26 "PKG Subscription Price" means 22.4% of the value of the TSPC Debt;

        2.1.27 "PKG Subscription Shares" means 224 ordinary "A" no par value shares in the issued ordinary "A" shares of the Company, constituting an approximate Participation Interest of 0.000224% and an approximate Voting Interest of 0.000224%;

        2.1.28 "PKG Transaction" means the transaction contemplated at clauses 9, 10 and 11;

        2.1.29 "Richmark" means Richmark Holdings Proprietary Limited, registration number 2000/013818/07, a limited liability private company duly incorporated in the Republic of South Africa;

        2.1.30 "Second Addendum to Share Sale Agreement" means an agreement headed "Second Addendum to Share Sale Agreement" between JAA, Richmark, Sabvest Finance and Guarantee Corporation Proprietary Limited, AJD, PKG, Net1 and the Company, to be entered into contemporaneously with this Agreement;

        2.1.31 "Signature Date" means the date of signature of this Agreement by the Party last signing;

        2.1.32 "Subscription Agreement" means an agreement headed "Subscription Agreement" entered into between Net1, AJD, Richmark and the Company on 23 June 2017;

        2.1.33 "Subscription Date" means the first business day immediately prior to the date on which the TSPC Debt becomes due and payable by the Company to Graeme Bryson in accordance with the provisions of the TSPC Agreement;

        2.1.34 "Third Addendum to the Additional Subscription Agreement" means an agreement headed "Third Addendum to the Additional Subscription Agreement" between the Company, AJD, Richmark and Net1, to be entered into contemporaneously with this Agreement;

CLIFFE DEKKER HOFMEYR

    

    

    
        
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        2.1.35 "TSPC Agreement" means an agreement headed "Sale of Shares Agreement" entered into between The Starter Pack Company Proprietary Limited, Graeme Bryson and the Company on or about 11 August 2017;

        2.1.36 "TSPC Debt" means the upward adjustment amount payable by the Company to Graeme Bryson in terms of clause 8.3.3(ii) of the TSPC Agreement; and

        2.1.37 "Voting Interest" means rights which a shareholder in the Company has to vote on any matter put to shareholders (on account of the shares held by that shareholder in the Company from time to time and having regard to all shares in the Company then in issue) expressed as a percentage.

        2.2 In this Agreement -

        2.2.1 clause headings and the heading of the Agreement are for convenience only and are not to be used in its interpretation;

        2.2.2 an expression which denotes -

        2.2.2.1 any gender includes the other genders;

        2.2.2.2 a natural person includes a juristic person and vice versa;

        2.2.2.3 the singular includes the plural and vice versa;

        2.2.2.4 a Party includes a reference to that Party's successors in title and assigns allowed at law; and

        2.2.2.5 a reference to a consecutive series of two or more clauses is deemed to be inclusive of both the first and last mentioned clauses.

        2.3 Any reference in this Agreement to -

        2.3.1 "business hours" shall be construed as being the hours between 08h30 and 17h00 on any business day.  Any reference to time shall be based upon South African Standard Time;

        2.3.2 "days" shall be construed as calendar days unless qualified by the word "business", in which instance a "business day" will be any day other than a Saturday, Sunday or public holiday as gazetted by the government of the Republic of South Africa from time to time;

        2.3.3 "laws" means all constitutions; statutes; regulations; by-laws; codes; ordinances; decrees; rules; judicial, arbitral, administrative, ministerial, departmental or regulatory judgements, orders, decisions, rulings, or awards; policies; voluntary
restraints; guidelines; directives; compliance notices; abatement
notices; agreements with, requirements of, or instructions by any
governmental body; and the common law, and "law" shall have a similar meaning; and

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        2.3.4 "person" means any person, company, close corporation, trust, partnership or other entity whether or not having separate legal personality.

        2.4 The words "include" and "including" mean "include without limitation" and "including without limitation".  The use of the words "include" and "including" followed by a specific example or examples shall not be construed as limiting the meaning of the general wording preceding it.

        2.5 Any substantive provision, conferring rights or imposing obligations on a Party and appearing in any of the definitions in this clause 2 or elsewhere in this Agreement, shall be given effect to as if it were a substantive provision in the body of the Agreement.

        2.6 Words and expressions defined in any clause shall, unless the application of any such word or expression is specifically limited to that clause, bear the meaning assigned to such word or expression throughout this Agreement.

        2.7 Unless otherwise provided, defined terms appearing in this Agreement in title case shall be given their meaning as defined, while the same terms appearing in lower case shall be interpreted in accordance with their plain English meaning.

        2.8 A reference to any statutory enactment shall be construed as a reference to that enactment as at the Signature Date and as amended or substituted from time to time.

        2.9 Unless specifically otherwise provided, any number of days prescribed shall be determined by excluding the first and including the last day or, where the last day falls on a day that is not a business day, the next succeeding business day.

        2.10 If the due date for performance of any obligation in terms of this Agreement is a day which is not a business day then (unless otherwise stipulated) the due date for performance of the relevant obligation shall be the immediately preceding business day.

        2.11 The rule of construction that this Agreement shall be interpreted against the Party responsible for the drafting of this Agreement, shall not apply.

        2.12 No provision of this Agreement shall (unless otherwise stipulated) constitute a stipulation for the benefit of any person (stipulatio alteri) who is not a Party to this Agreement.

        2.13 The use of any expression in this Agreement covering a process available under South African law, such as winding-up, shall, if either of the Parties to this Agreement is subject to the law of any other jurisdiction, be construed as including any
equivalent or analogous proceedings under the law of such other
jurisdiction.

CLIFFE DEKKER HOFMEYR

    

    

    
        
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        2.14 Any reference in this Agreement to "this Agreement" or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document, as amended, varied, novated or supplemented from time to time.

        2.15 In this Agreement the words "clause" or "clauses" refer to clauses of this Agreement.

        3 introduction

        3.1 Net1 is the registered holder and beneficial owner of the JAA Sale Shares and the PKG Sale Shares.

        3.2 Net1 wishes to sell the JAA Sale Shares and the PKG Sale Shares to each of JAA and PKG, respectively, who wish to purchase such shares, on the terms and subject to the conditions herein contained.

        3.3 The Parties wish to record in writing their agreement in respect of the above and matters ancillary thereto.

        4 CONDITIONs precedent

        4.1 Save for clauses 1 to 4, and clauses 19 to 28 all of which will become effective immediately, this Agreement is subject to the fulfilment of the following Conditions Precedent by no later than 5 April 2019 - 

        4.1.1 the Third Addendum to the Additional Subscription Agreement has been entered into and has become unconditional in accordance with its terms, save for any conditions requiring this Agreement to become unconditional;

        4.1.2 the Second Addendum to Share Sale Agreement has been entered into and has become unconditional in accordance with its terms, save for any conditions requiring this Agreement to become unconditional;

        4.1.3 the Facility Agent (as such term is defined in the CTA) has, to the extent necessary, consented to - 

        4.1.3.1 Net1 entering into this Agreement, the Third Addendum to the Additional Subscription Agreement and the Second Addendum to Share Sale Agreement as well as the implementation of the transactions contemplated in the aforegoing agreements; 

        4.1.3.2 the release of JAA Sale Shares and the PKG Sales Shares under any security held by the Facility Agent over those shares;

CLIFFE DEKKER HOFMEYR

    

    

    
        
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        4.1.4 to the extent necessary, FirstRand Bank Limited (acting through its Rand Merchant Bank division) in its capacity as lender to and/or holder of preferences shares in JAA, PKG and/or the Company has, to the extent applicable, consented to JAA, PKG and the Company, as the case may be, entering into this Agreement, the Third Addendum to the Additional Subscription Agreement and the Second Addendum to Share Sale Agreement as well as the implementation of the transactions contemplated in the aforegoing agreements; and

        4.1.5 the shareholders of the Company have waived in writing JAA's obligation to make a mandatory offer to the remaining shareholders of the Company in terms of section 123 of the Companies Act pursuant to the implementation of the transactions contemplated in this Agreement.

        4.2 Unless all the Conditions Precedent have been fulfilled or waived by not later than 5 April 2019 (or such later date as may be agreed in writing between the Parties) the provisions of this Agreement, save for clauses 1 to 4, and clauses 19 to 28, which will remain of full force and effect, will never become of any force or effect and the status quo ante will be restored as near as may be and neither of the Parties will have any claim against the other in terms hereof or arising from the failure of any of the Conditions Precedent.

        part 2 - Sale provisions

        5 transaction steps

        The JAA Transaction and the PKG Transaction shall be implemented contemporaneously, immediately prior to the - 

        5.1 subscription by Net1 for 1 ordinary "A" share in the Company, in terms of clause 4 (Subscription and Settlement by Net1); and 

        5.2 declaration and settlement of the dividend by the Company to the holders of the ordinary shares in the Company, in terms of clause 8 (Closing),

        of the Additional Subscription Agreement.

        6 JAA SALE

        6.1 Net1 hereby sells to JAA, which hereby purchases, the JAA Sale Shares, as one indivisible transaction.

        6.2 Notwithstanding the Signature Date, all risk in and all benefit attaching to the JAA Sale Shares will, against settlement of the JAA Purchase Consideration, pass to JAA on completion of the JAA Closing.

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        6.3 Possession and effective control of the JAA Sale Shares will be given to JAA on the Closing Date. Net1 will accordingly retain the right to exercise all voting rights attaching to the JAA Sale Shares until completion of the JAA Closing.

        7 PURCHASE CONSIDERATION and settlement

        7.1 The JAA Purchase Consideration is an amount of R310,400,000.

        7.2 The JAA Purchase Consideration will be settled by JAA, on the Closing Date, against compliance by Net1 with clause 8.1, by way of JAA crediting an interest-free loan account in its books of account in the name of Net1 in the sum of R310,400,000 ("JAA Sale Claim").

        8 JAA CLOSING

        8.1 On the Closing Date representatives of the Parties shall meet at 10h00 at the Johannesburg offices of Net1 or such other place as the Parties may agree, at which meeting Net1 will deliver to JAA -

        8.1.1 original share certificates in respect of the JAA Sale Shares;

        8.1.2 share transfer forms in respect of the JAA Sale Shares duly completed by the registered holders thereof and dated not more than 3 business days earlier than the Closing Date, but in blank as to the transferee; and

        8.1.3 a copy of the securities register of the Company, together with the relevant original share certificates reflecting JAA as the holder of the JAA Sale Shares.

        8.2 The Parties may, by agreement in writing, dispense with a meeting on the Closing Date and may instead ensure delivery of the documents referred to in clause 8.1, and/or settlement of the JAA Purchase Consideration, in such other manner as they agree to be convenient.

        9 PKG SALE

        9.1 Net1 hereby sells to PKG, which hereby purchases, the PKG Sale Shares, as one indivisible transaction.

        9.2 Notwithstanding the Signature Date, all risk in and all benefit attaching to the PKG Sale Shares will, against settlement of the PKG Purchase Consideration, pass to PKG on completion of the PKG Closing.

        9.3 Possession and effective control of the PKG Sale Shares will be given to PKG on the Closing Date. Net1 will accordingly retain the right to exercise all voting rights attaching to the PKG Sale Shares until completion of the PGK Closing.

CLIFFE DEKKER HOFMEYR

    

    

    
        
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        10 PURCHASE CONSIDERATION and settlement

        10.1 The PKG Purchase Consideration is an amount of R89,600,000.

        10.2 The PKG Purchase Consideration will be settled by PKG, on the Closing Date, against compliance by Net1 with clause 11.1, by way of PKG crediting an interest-free loan account in its books of account in the name of Net1 in the sum of R89,600,000 ("PKG Sale Claim").

        11 PKG CLOSING

        11.1 On the Closing Date representatives of the Parties shall meet at 10h00 at the Johannesburg offices of Net1 or such other place as the Parties may agree, at which meeting Net1 will deliver to PKG -

        11.1.1 original share certificates in respect of the PKG Sale Shares;

        11.1.2 share transfer forms in respect of the PKG Sale Shares duly completed by the registered holders thereof and dated not more than 3 business days earlier than the Closing Date, but in blank as to the transferee; and

        11.1.3 a copy of the securities register of the Company, together with the relevant original share certificates reflecting PKG as the holder of the PKG Sale Shares.

        11.2 The Parties may, by agreement in writing, dispense with a meeting on the Closing Date and may instead ensure delivery of the documents referred to in clause 11.1, and/or settlement of the PKG Purchase Consideration, in such other manner as they agree to be convenient.

        Part 3 - subscription provisions

        12 JAA Subscription

        12.1 JAA hereby subscribes for the JAA Subscription Shares, with effect from the Subscription Date, at the JAA Subscription Price.

        12.2 JAA shall pay the JAA Subscription Price to the Company on the Subscription Date.

        12.3 The Company shall, upon subscription by JAA for the JAA Subscription Shares pursuant to clause 12.1 and against payment by JAA of the JAA Subscription Price in accordance with the provisions of clause 12.2, on the Subscription Date allot and issue the JAA Subscription Shares to JAA and deliver to JAA -

        12.3.1 original share certificates in respect of the JAA Subscription Shares;

        12.3.2 copies of resolutions of the directors of the Company approving the allotment and issue of the JAA Subscription Shares to JAA.

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        12.4 The Company hereby gives to and in favour of JAA only the warranties set out below as at the Subscription Date. Save for these warranties and the warranties set out in clause 19, the issue of the JAA Subscription Shares is on a voetstoots basis, with no further warranties or representations, or term as to fitness for any purpose, express or implied, being given by the Company to JAA. The warranties are -

        12.4.1 the JAA Subscription Shares will be validly issued; and

        12.4.2 the JAA Subscription Shares will, upon issue, constitute an approximate Participation Interest of 0.000776% and an approximate Voting Interest of 0.000776%.

        13 PKG Subscription

        13.1 PKG hereby subscribes for the PKG Subscription Shares, with effect from the Subscription Date, at the PKG Subscription Price.

        13.2 PKG shall pay the PKG Subscription Price to the Company on the Subscription Date.

        13.3 The Company shall, upon subscription by PKG for the PKG Subscription Shares pursuant to clause 13.1 and against payment by PKG of the PKG Subscription Price in accordance with the provisions of clause 13.2, on the Subscription Date allot and issue the PKG Subscription Shares to PKG and deliver to PKG -

        13.3.1 original share certificates in respect of the PKG Subscription Shares;

        13.3.2 copies of resolutions of the directors of the Company approving the allotment and issue of the PKG Subscription Shares to PKG.

        13.4 The Company hereby gives to and in favour of PKG only the warranties set out below as at the Subscription Date. Save for these warranties and the warranties set out in clause 19, the issue of the PKG Subscription Shares is on a voetstoots basis, with no further warranties or representations, or term as to fitness for any purpose, express or implied, being given by the Company to PKG. The warranties are -

        13.4.1 the PKG Subscription Shares will be validly issued; and

        13.4.2 the PKG Subscription Shares will, upon issue, constitute an approximate Participation Interest of 0.000224% and an approximate Voting Interest of 0.000224%.

        14 tspc debt

        For the sake of good order, the Parties record that the Company shall apply the proceeds of the subscriptions in clauses 12 and 13 towards the settlement of the TSPC Debt, in accordance with the provisions of the TSPC Agreement.

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        15 cession

        15.1 With effect from the Closing Date, Net1 hereby cedes to each of JAA and PKG, in proportion to their shareholding in the Company inter se, that portion of any damages claim which Net1 would have had (but for the cession contemplated in this clause 15) on account of it holding the JAA Sale Shares and PKG Sale Shares.

        15.2 AJD and Richmark, in their capacity as Warrantors (as such term is defined in the Subscription Agreement) consent to the cession in clause 15.1.

        PArt 4 - General Matters

        16 consent

        JAA and PKG hereby irrevocably and unconditionally consent to the cession by Net1 of the JAA Sale Claim and the PKG Sale Claim to the Company in accordance with the provisions of the Third Addendum to the Additional Subscription Agreement.

        17 Waiver

        Net1, JAA and PKG hereby irrevocably and unconditionally waive any and all pre-emptive rights, tag-along rights, come along rights and rights of first refusal, or any similar rights, which they may have in respect of the JAA Sale Shares or the PKG Sale Shares in terms of any shareholders agreement, the memorandum of incorporation of the Company or otherwise.

        18 WARRANTIES BY Net1

        18.1 Net1 hereby gives to and in favour of JAA only the warranties set out below as at the Closing Date. Save for these warranties and the warranties set out in clause 19, the sale under the JAA Transaction is on a voetstoots basis, with no further warranties or representations, or term as to fitness for any purpose, express or implied, being given by Net1 to JAA. The warranties are -

        18.1.1 Net1 is the beneficial owner of the JAA Sale Shares and entitled to dispose of the same; 

        18.1.2 no other party has any claim to or over or in respect of the JAA Sale Shares, nor are they encumbered in any way;

        18.1.3 the JAA Sale Shares confer an approximate Participation Interest of 13.19% and an approximate Voting Interest of 13.19%.

        18.2 Net1 hereby gives to and in favour of PKG only the warranties set out below as at the Closing Date. Save for these warranties and the warranties set out in clause 19, the sale under the PKG Transaction is on a voetstoots basis, with no further warranties or representations, or term as to fitness for any purpose, express or implied, being given by Net1 to PKG. The warranties are -

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        18.2.1 Net1 is the beneficial owner of the PKG Sale Shares and entitled to dispose of the same; 

        18.2.2 no other party has any claim to or over or in respect of the PKG Sale Shares, nor are they encumbered in any way;

        18.2.3 the PKG Sale Shares confer an approximate Participation Interest of 3.81% and an approximate Voting Interest of 3.81%.

        19 general WARRANTIES

        19.1 Each of the Parties hereby warrants to and in favour of the other that -

        19.1.1 it has the legal capacity and has taken all necessary corporate action required to empower and authorise it to enter into this Agreement;

        19.1.2 this Agreement constitutes an agreement valid and binding on it and enforceable against it in accordance with its terms;

        19.1.3 the execution of this Agreement and the performance of its obligations hereunder does not and shall not -

        19.1.3.1 contravene any law or regulation to which that Party is subject;

        19.1.3.2 contravene any provision of that Party's constitutional documents; or

        19.1.3.3 conflict with or constitute a breach of any of the provisions of any other agreement, obligation, restriction or undertaking which is binding on it;  and

        19.1.4 to the best of its knowledge and belief, it is not aware of the existence of any fact or circumstance that may impair its ability to comply with all of its obligations in terms of this Agreement;

        19.1.5 it is entering into this Agreement as principal (and not as agent or in any other capacity);

        19.1.6 the natural person who signs and executes this Agreement on its behalf is validly and duly authorised to do so;

        19.1.7 no other party is acting as a fiduciary for it;  and

        19.1.8 it is not relying upon any statement or representation by or on behalf of any other Party, except those expressly set forth in this Agreement.

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        19.2 Each of the representations and warranties given by the Parties in terms of clause 19.1 shall -

        19.2.1 be a separate warranty and will in no way be limited or restricted by inference from the terms of any other warranty or by any other words in this Agreement;

        19.2.2 continue and remain in force notwithstanding the completion of any or all the transactions contemplated in this Agreement; and

        19.2.3 prima facie be deemed to be material and to be a material representation inducing the other Party to enter into this Agreement.

        20 SUPPORT

        The Parties undertake at all times to do all such things, perform all such actions and take all such steps and to procure the doing of all such things, the performance of all such actions and the taking of all such steps as may be open to them and necessary for or incidental to the putting into effect or maintenance of the terms, conditions and/or import of this Agreement, including, without limitation - 

        20.1 procuring the requisite dispensation from the Takeover Regulation Panel, established in terms of section 196 of the Companies Act, in respect of JAA's obligation to make a mandatory offer to the remaining shareholders of the Company in terms of section 123 of the Companies Act pursuant to the implementation of the transactions contemplated in this Agreement; and

        20.2 providing PKG and/or the Company with all information reasonably required by PKG and/or the Company in respect of the "non-resident" endorsement of the new share certificates issued to PKG as the holder of the PKG Sale Shares.

        21 breach

        21.1 If a Party ("Defaulting Party") commits any breach of this Agreement and fails to remedy such breach within 10 business days ("Notice Period") of written notice requiring the breach to be remedied, then the Party giving the notice ("Aggrieved Party") will be entitled, at its option -

        21.1.1 to claim immediate specific performance of all or any of the Defaulting Party's obligations under this Agreement, with or without claiming damages, whether or not such obligation has fallen due for performance; or

        21.1.2 to cancel this Agreement, with or without claiming damages, in which case written notice of the cancellation shall be given to the Defaulting Party, and the cancellation shall take effect on the giving of the notice.  No Party shall be entitled to cancel this Agreement unless the breach is a material breach.  A breach will be deemed to be a material breach if  -

CLIFFE DEKKER HOFMEYR

    

    

    
        
            14

        

        21.1.2.1 it is capable of being remedied, but is not so remedied within the Notice Period; or

        21.1.2.2 it is incapable of being remedied and payment in money will compensate for such breach but such payment is not made within the Notice Period.

        21.2 The Parties agree that any costs awarded will be recoverable on an attorney-and-own-client scale unless the Court specifically determines that such scale shall not apply, in which event the costs will be recoverable in accordance with the High Court tariff, determined on an attorney-and-client scale.

        21.3 The Aggrieved Party's remedies in terms of this clause 21 are without prejudice to any other remedies to which the Aggrieved Party may be entitled in law.

        21.4 Notwithstanding the aforegoing, after the Closing Date, none of the Parties will have the right to cancel this Agreement as a result of a breach thereof, and the Parties' only remedies thereafter will be to claim specific performance of all the Defaulting Party's obligations, together with damages, if any.

        22 DISPUTE RESOLUTION

        22.1 In the event of there being any dispute or difference between the Parties arising out of this Agreement (including but not limited to any dispute or difference as to the validity or otherwise of this Agreement, or as to the enforceability of this Agreement), the said dispute or difference shall on written demand by either Party be submitted to arbitration in Johannesburg in accordance with the AFSA rules, which arbitration shall be administered by AFSA.

        22.2 Should AFSA, as an institution, not be operating at that time or not be accepting requests for arbitration for any reason, or should AFSA refuse to accept the particular request for arbitration for whatever reason, then the arbitration shall be conducted in accordance with the AFSA rules for commercial arbitration (as last applied by AFSA) before an arbitrator appointed by agreement between the parties to the dispute or failing agreement within 10 business days of the demand for arbitration, then any party to the dispute shall be entitled to forthwith call upon the chairperson of the Johannesburg Bar Council to nominate the arbitrator, provided that the person so nominated shall be an advocate of not less than 10 years standing as such.  The person so nominated shall be the duly appointed arbitrator in respect of the dispute.  In the event of the attorneys of the parties to the dispute failing to agree on any matter relating to the administration of the arbitration, such matter shall be referred to and decided by the arbitrator whose decision shall be final and binding on the parties to the dispute.

CLIFFE DEKKER HOFMEYR

    

    

    
        
            15

        

        22.3 Any party to the arbitration may appeal the decision of the arbitrator or arbitrators in terms of the AFSA rules for commercial arbitration.

        22.4 Nothing herein contained shall be deemed to prevent or prohibit a party to the arbitration from applying to the appropriate court for urgent relief or for judgment in relation to a liquidated claim.

        22.5 Any arbitration in terms of this clause 22 (including any appeal proceedings) shall be conducted in camera and the Parties shall treat as confidential details of the dispute submitted to arbitration, the conduct of the arbitration proceedings and the outcome of the arbitration.

        22.6 This clause 22 will continue to be binding on the Parties notwithstanding any termination or cancellation of the Agreement.

        22.7 The Parties declare that it is their intention that this clause 22 will regulate the manner in which they will resolve any dispute or difference regarding the validity or otherwise of this Agreement, regardless of the fact that one of the parties may dispute the validity or enforceability of the Agreement.

        22.8 The Parties agree that the written demand by a party to the dispute in terms of clause 22.1 that the dispute or difference be submitted to arbitration, is to be deemed to be a legal process for the purpose of interrupting extinctive prescription in terms of the Prescription Act, 1969.

        23 Notices and Domicilia

        23.1 The Parties select as their respective domicilia citandi et executandi the following physical addresses, and for the purposes of giving or sending any notice provided for or required under this Agreement, the said physical addresses as well as the following email addresses -

        	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        JAA

                    	
                        23/25 Commerce Crescent 

                    	
                        ad@dninvest.co.za 

                    
	
                         

                    	
                        Kramerville 

                    	
                         

                    
	
                         

                    	
                        2031

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Andrew Dunn 

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        PKG

                    	
                        c/o Michael Honiball

                    	
                        petergain@me.com

                    
	
                         

                    	
                        Werksmans Attorneys

                    	
                         

                    
	
                         

                    	
                        96 Rivonia Road

                    	
                         

                    
	
                         

                    	
                        Sandton

                    	
                         

                    
	
                         

                    	
                        2196

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Peter Gain 

                    
	
                         

                    	
                         

                    	
                         

                    

CLIFFE DEKKER HOFMEYR

    

    

    
        
            16

        

        	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        Company

                    	
                        23/25 Commerce Crescent 

                    	
                        xxx

                    
	
                         

                    	
                        Kramerville 

                    	
                         

                    
	
                         

                    	
                        2031

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Andrew Dunn 

                    
	
                         

                    
	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        Net1

                    	
                        6th Floor President Place 

                    	
                        xxx 

                    
	
                         

                    	
                        Corner of Jan Smuts and Bolton Road

                    	
                         

                    
	
                         

                    	
                        Rosebank

                    	
                         

                    
	
                         

                    	
                        2121

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Herman Kotze

                    
	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        AJD

                    	
                        23/25 Commerce Crescent 

                    	
                        Xxx

                    
	
                         

                    	
                        Kramerville 

                    	
                         

                    
	
                         

                    	
                        2031

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Andrew Dunn 

                    
	
                         

                    
	
                        Name

                    	
                        Physical Address

                    	
                        Email Address

                    
	
                        Richmark

                    	
                        5th Floor, Capital Hill Building

                    	
                        xxx 

                    
	
                         

                    	
                        6 Benmore Road

                    	
                         

                    
	
                         

                    	
                        Sandton

                    	
                         

                    
	
                         

                    	
                        2057

                    	
                         

                    
	
                         

                    	
                         

                    	
                         

                    
	
                        Marked for the attention of: Ebrahim Karolia 

                    

        provided that a Party may change its domicilium to another physical address in the Republic of South Africa (provided that such physical address is not a post office box or poste restante), or may change its address for the purposes of notices to any other physical address or email address by written notice to the other Party to that effect.  Such change of address will be effective 5 business days after receipt of the notice of the change.

        23.2 All notices to be given in terms of this Agreement will be given in writing and will -

        23.2.1 be delivered by hand or sent by email;

        23.2.2 if delivered by hand during business hours, be presumed to have been received on the date of delivery.  Any notice delivered after business hours or on a day which is not a business day will be presumed to have been received on the following business day; and

        23.2.3 if sent by email during business hours, be presumed to have been received on the date of successful transmission of the email.  Any email sent after business hours or on a day which is not a business day will be presumed to have been received on the following business day. 

        23.3 Notwithstanding the above, any notice given in writing, and actually received by the Party to whom the notice is addressed, will be deemed to have been properly given and received, notwithstanding that such notice has not been given in accordance with this clause 21.

CLIFFE DEKKER HOFMEYR

    

    

    
        
            17

        

        24 benefit of the agreement

        This Agreement will also be for the benefit of and be binding upon the successors in title and permitted assigns of the Parties or either of them.

        25 applicable law and jurisdiction

        25.1 This Agreement will in all respects be governed by and construed under the laws of the Republic of South Africa.

        25.2 Subject to clause 22, the Parties hereby consent and submit to the non-exclusive jurisdiction of the High Court of South Africa, Gauteng Local Division, (Johannesburg) in any dispute arising from or in connection with this Agreement.

        26 GENERAL

        26.1 Whole Agreement

        26.1.1 This Agreement constitutes the whole of the agreement between the Parties relating to the matters dealt with herein and, save to the extent otherwise provided herein, no undertaking, representation, term or condition relating to the subject matter of this Agreement not incorporated in this Agreement shall be binding on either of the Parties.

        26.1.2 This Agreement supersedes and replaces any and all agreements between the Parties (and other persons, as may be applicable) and undertakings given to or on behalf of the Parties (and other persons, as may be applicable) in relation to the subject matter hereof.

        26.2 Variations to be in Writing

        No addition to or variation, deletion, or agreed cancellation of all or any clauses or provisions of this Agreement will be of any force or effect unless in writing and signed by the Parties.

        26.3 No Indulgences

        No latitude, extension of time or other indulgence which may be given or allowed by either Party to the other in respect of the performance of any obligation hereunder, and no delay or forbearance in the enforcement of any right of either Party arising from this Agreement and no single or partial exercise of any right by either Party under this Agreement, shall in any circumstances be construed to be an implied consent or election by that Party or operate as a waiver or a novation of or otherwise affect any of its rights in terms of or arising from this Agreement or estop or preclude it from
enforcing at any time and without notice, strict and punctual compliance
 with each and every provision or term hereof.  Failure or delay on the
part of either Party in exercising any right, power or privilege under
this Agreement will not constitute or be deemed to be a waiver thereof,
nor will any single or partial exercise of any right, power or privilege
 preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.

CLIFFE DEKKER HOFMEYR

    

    

    
        
            18

        

        26.4 No Waiver or Suspension of Rights

        No waiver, suspension or postponement by either Party of any right arising out of or in connection with this Agreement shall be of any force or effect unless in writing and signed by that Party.  Any such waiver, suspension or postponement will be effective only in the specific instance and for the purpose given.

        26.5 Continuing Effectiveness of Certain Provisions

        The expiration or termination of this Agreement shall not affect such of the provisions of this Agreement as expressly provide that they will operate after any such expiration or termination or which of necessity must continue to have effect after such expiration or termination, notwithstanding that the clauses themselves do not expressly provide for this.

        26.6 No Assignment

        Neither this Agreement nor any part, share or interest herein nor any rights or obligations hereunder may be ceded, delegated or assigned by either Party without the prior signed written consent of the other, save as otherwise provided herein.

        26.7 Exclusion of Electronic Signature

        The reference in clauses 26.2, 26.4 and 26.6 to writing signed by a Party shall, notwithstanding anything to the contrary in this Agreement, be read and construed as excluding any form of electronic signature.

        27 COSTS

        Except as otherwise specifically provided herein, each Party will bear and pay its own legal costs and expenses of and incidental to the negotiation, drafting, preparation and implementation of this Agreement.

        28 SIGNATURE

        28.1 This Agreement is signed by the Parties on the dates and at the places indicated below.

CLIFFE DEKKER HOFMEYR

    

    

    
        
            19

        

        28.2 This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement as at the date of signature of the Party last signing one of the counterparts.

        28.3 The persons signing this Agreement in a representative capacity warrant their authority to do so.

        28.4 The Parties record that it is not required for this Agreement to be valid and enforceable that a Party shall initial the pages of this Agreement and/or have its signature of this Agreement verified by a witness.

        SIGNED at Johannesburg on 28 February 2019

        For and on behalf of

        JAA HOLDINGS PROPRIETARY LIMITED

        /s/ Andrew Dunn

        Signature

        Andrew Dunn

        Name of Signatory

        Director

        Designation of Signatory

        SIGNED at Stellenbosch on 28 February 2019

        For and on behalf of

        PK GAIN INVESTMENT HOLDINGS PROPRIETARY LIMITED

        /s/ J.K. van Zyl

        Signature

        J.K. van Zyl

        Name of Signatory

        Director

        Designation of Signatory

CLIFFE DEKKER HOFMEYR

    

    

    
        
            20

        

        SIGNED at Rosebank on 28 February 2019

        For and on behalf of

        NET1 APPLIED TECHNOLOGIES SOUTH AFRICA PROPRIETARY LIMITED

        /s/ A.M.R. Smith

        Signature

        A.M.R. Smith

        Name of Signatory

        Director

        Designation of Signatory

        SIGNED at Johannesburg on 28 February 2019

        For and on behalf of

        AJD HOLDINGS PROPRIETARY LIMITED

        /s/ Andrew Dunn

        Signature

        Andrew Dunn

        Name of Signatory

        Director

        Designation of Signatory

        SIGNED at Johannesburg on 28 February 2019

        For and on behalf of

        RICHMARK HOLDINGS PROPRIETARY LIMITED

        /s/ Ebrahim Karolia

        Signature

        Ebrahim Karolia

        Name of Signatory

        Director

        Designation of Signatory

CLIFFE DEKKER HOFMEYR

    

    

    
        
            21

        

        SIGNED at Johannesburg on 28 February 2019

        For and on behalf of

        DNI-4PL CONTRACTS PROPRIETARY LIMITED

        /s/ David Smaldon

        Signature

        David Smaldon

        Name of Signatory

        Director

        Designation of Signatory

CLIFFE DEKKER HOFMEYRFEASIBILITY
STUDY AND OPTION AGREEMENT

 

This
Research and Option Agreement (“Agreement”) made in Jerusalem and bearing the effective date of February __,
2019 (“Effective Date”), is by and between YISSUM RESEARCH DEVELOPMENT COMPANY OF THE HEBREW UNIVERSITY
OF JERUSALEM LTD., of Hi Tech Park, Edmond J. Safra Campus, Givat Ram, Jerusalem 91390, Israel (“Yissum”)
and Canna Powder LTD., of 20 Raul Wallenberg , Tel Aviv (the “Company").

 

		WHEREAS:	the
                                         rights and title to all inventions and research results of scientists of the Hebrew University
                                         of Jerusalem (“HUJ”) vest solely with Yissum; and

 

		WHEREAS:	the
                                         Company wishes to fund, and Yissum has agreed to obtain the performance of certain Feasibility
                                         Study as defined below, relating to the Yissum research entitled “development of
                                         a Cannabis patch”; and, if such Feasibility Study is successful, to consider obtaining,
                                         subject to its sole discretion, a license to the Study Results (as defined below) in
                                         accordance with commercial terms listed in Appendix A and the terms of the License Agreement
                                         which is attached as Appendix C; and

 

		WHEREAS:	Yissum
                                         agrees to perform the Feasibility Study, and to grant the Option (as defined below) to
                                         the Company, all in accordance with the terms and conditions of this Agreement; and

 

NOW
THEREFORE THE PARTIES DO HEREBY AGREE AS FOLLOWS:

 

		1.	Interpretation
                                         and Definitions

		1.1.	The
                                         preamble and appendices annexed to this Agreement constitute an integral part hereof
                                         and shall be read jointly with its terms and conditions.

 

		1.2.	In
                                         this Agreement, unless otherwise required or indicated by the context, the singular shall
                                         include the plural and vice-versa, the masculine gender shall include the female
                                         gender, the use of the word "or" shall mean "and/or" and the use
                                         of the word “including” shall mean “including without limitation).

 

		1.3.	In
                                         this Agreement, capitalized terms shall have the meaning set forth herein:

 

		1.3.1.	“Feasibility
                                         Study” shall mean the feasibility study to be conducted by the Researcher pursuant
                                         to the Feasibility Study Program.

 

		1.3.2.	“Study
                                         Period” shall mean twelve (12) months from the date the Company provided Yissum
                                         with written notice of its readiness to commence the Feasiblity Study, which shall be
                                         provided to Yissum within 3 months from the Effective Date.

 

		1.3.3.	“Feasibility
                                         Study Program” shall mean the program under this Agreement pursuant to which
                                         the Feasibility Study shall be carried out and conducted by the Researcher, as per Appendix
                                         B of this Agreement

 

		1.3.4.	“Researcher”
                                         shall mean Prof. Amos Nussinovich, or such other person(s) as appointed from time to
                                         time by Yissum to supervise and to perform the Research, if applicable, after consulting
                                         with the Company and subject to its consent .

 

		1.3.5.	“Study
                                         Results” shall mean all work product and results (including all information,
                                         material, results, devices, solutions, know-how and intellectual property) first generated
                                         by and during the Feasibility Study.

 

    	 	1	 

     

    

		2.	Feasibility
                                         Study

		2.1.	The
                                         Company hereby undertakes to finance performance of the Feasibility Study in accordance
                                         with the Feasibility Study Program or any amendment thereof. Such financing shall be,
                                         subject to any earlier termination of the Feasibility Study pursuant to this section
                                         and section 2.2, below, in an amount of $135,000 (Hundred and thirty five thousand US
                                         Dollars) plus VAT (inclusive of overhead) (the "Total Study Fee") The
                                         Feasibility Study shall be conducted in two stages, each for the duration of six (6)
                                         months. The budget for the first stage shall be US$67,500 (sixty seven thousand US Dollar)
                                         (the “First Stage Study Fee”) payable in two equal installments as
                                         follows: US$ 33,750 (thirty three thousand and seven hundred and fifty US Dollars) on
                                         the Effective Day, and US$ 33,750 (thirty three thousand and seven hundred and fifty
                                         US Dollars) within three (3) months of the Effective Date.
The budget for the second stage shall be US$67,500 (sixty seven thousand US Dollar) (the “Second Stage Study Fee”)
payable in two equal installments as follows: US$ 33,750 (thirty three thousand and seven hundred and fifty US Dollars) on the
commencement of the second stage of the Study, and US$ 33,750 (thirty three thousand and seven hundred and fifty US Dollars) within
three (3) months of the commencement of the second stage of the Study.Within fourteen (14) days of the Company’s receipt
of the Interim Report, the Company shall notify Yissum in writing whether it desires to continue with the second stage of the
Feasibility Study. In the event the Company notifies Yissum that it does not desire to continue with the second stage of the Feasibility
Study, the Company shall not be obligated to pay the Second Stage Study Fee.

 

		2.2.	The
                                         Feasibility Study shall be conducted by and under the supervision of the Researcher.
                                         Should the Researcher be unable to complete the Feasibility Study for any reason, Yissum
                                         shall notify the Company in writing of the identity of a suitable replacement researcher.
                                         If the Company does not object in writing to the replacement of a researcher on reasonable
                                         grounds within thirty (30) days of this notification, the substitute researcher shall
                                         be deemed acceptable to the Company. Alternatively, the Company shall have the right
                                         to terminate for convenience the Feasibility Study being conducted by the Researcher
                                         who is no longer able to complete such Feasibility Study, provided that (i) no monies
                                         paid to Yissum for the Feasibility Study pursuant to the schedule set forth in Appendix
                                         B will be refundable; and (ii) the Company shall be responsible for the payment of any
                                         accrued fees and expenses due to Yissum based on work duly performed up to the date of
                                         termination and those irrevocable commitments entered into by Yissum prior to having
                                         received the Company's written notice of termination. For the avoidance if any doubt,
                                         the Company shall not be required to pay any balance of the Study Fee to Yissum other
                                         than set forth in this Section above.

 

		2.3.	The
                                         Company shall deliver to the Researcher sufficient quantities of the chemical constituents
                                         identified in the Research Program requited to preform the Research and shall be responsible
                                         to provide the Researcher with proper instructions on the handling of said chemical constituents.
                                         For the avoidance of any doubt, the Researcher shall not be required to begin the Research
                                         until the Company delivers the required said chemical constituents. 

 

		2.4.	Within
                                         (15) days of the end of the first stage of the Feasibility Study, Yissum shall present
                                         the Company with a written report from the Researcher summarizing the results of the
                                         first stage of the Feasibility Study (the “Interim Report”). Within
                                         sixty (60) days of the end of the Study Period, Yissum shall present the Company with
                                         a written report from the Researcher summarizing the results of the second stage of the
                                         Feasibility Study (the “Final Report”). 

 

		3.	Option
                                         to License the Study Results; Ownership of the Study Results; and Right of First Review
                                         

		3.1	Yissum
                                         hereby grants the Company an option (the “Option”) to receive an exclusive,
                                         sublicensable (subject to the License Agreement terms), worldwide royalty-bearing license
                                         to Yissum’s interest in the Study Results in the field of Systemic and local, tran-dermal
                                         and trans-mucosal delivery of cannabinoids using Exudates based formulations (the “License”)
                                         upon the commercial terms listed in Appendix A and the terms of the License Agreement,
                                         which is attached as Appendix C (the “License Agreement). 

    	 	2	 

     

    

 

		3.2	The
                                         Company may exercise the Option at any time from the Effective Date up to and including
                                         ninety (90) days from the Company’s receipt of the Final Report (the “Option
                                         Exrecise Period”) by notifying Yissum in writing that the Company desires to
                                         receive the License (the “Option Exercise Notice”). For the avoidance
                                         of any doubt, it is herby clarified that the Company may exercise the Option after the
                                         receipt of the Interim Report even if it decides not to contine with the second stage
                                         of the Feasibility Study.

 

		3.3	Within
                                         10 days from the date of Yissum’s receipt of the Option Exercise Notice within
                                         the Option Exercise Period, Yissum and the Company shall negotiate the final terms and
                                         conditions of the License Agreement during a period of up to ninety (90) days (the “Negotiation
                                         Period”).

 

		3.4	All
                                         rights in the Study Results, including in any patent applications in connection with
                                         the Study Results that may be filed, shall be owned by Yissum unless an employee of the
                                         Company is properly considered an inventor of any patent application so filed, in which
                                         event such patent application shall be owned jointly by Yissum and the Company (“Joint
                                         Patents”). All rights in any other intellectual property developed solely by
                                         the employees or representatives of one Party shall belong exclusively to such Party.

 

		3.5	Notwithstanding
                                         the foregoing in Section 3.4, above, should the Company not exercise the Option within
                                         the Option Exercise Period or the Parties fail to execute a License Agreement within
                                         the Negotiation Period, (i) neither Yissum nor the Researcher shall have any further
                                         obligations towards the Company with respect to the Study Results, whether solely owned
                                         by Yissum or jointly held with the Company and (ii) the Company shall not use any of
                                         the approaches
presented by the Researcher or the Study Results, to establish further research and development with a different entity or researcher,
without the prior written approval of Yissum. In such event, the Company agrees to take all reasonably necessary actions to assign
its interest in any Joint Patent to Yissum without any compensation to be paid by Yissum to the Company. Thereafter, Yissum shall
be entitled to commercialize or otherwise grant third parties any right or title in and to the Study Results according to Yissum'
sole discretion and without any further obligation to the Company.

 

		3.6	From
                                         the Effective Date to the later of (a) the end of the Option Exercise Period; and (b)
                                         the execution of a License Agreement or the expiration of the Negotiation Period, Yissum
                                         shall not, directly or indirectly, enter into any discussions or agreement with any third
                                         party, including any agreement to license, sell or purchase any rights or interests in
                                         or to the Study Results, nor shall it accept, consider, initiate or negotiate any offer
                                         from any other person or entity with respect to a collaboration, license, sale, purchase
                                         or other business transaction involving the Study Results.

 

		3.7	As
                                         of the Effective Date, the Company shall have a right of first review of newly developed
                                         uses of the specific patch used in the Research to deliver chemical constitutes other
                                         than Cannabis (“Other Research Results” ) for a period of three (3)
                                         years from the Effective Date (the “Review Period”). If the Company
                                         is interested in obtaining such a license, the Company shall notify Yissum, in writing,
                                         within the Review Period (the “Notice”). In the event that Yissum
                                         receives a Notice within the Review Period, the Company and Yissum shall enter into a
                                         license agreement upon the commercial terms listed in Appendix A and the terms of the
                                         License Agreement, which is attached as Appendix C. In the event that: (i) the Company
                                         fails to deliver a Notice to Yissum within the Review Period; or (ii) the Company notifies
                                         Yissum in writing that it is not interested in obtaining a license; or (iii) the Company
                                         delivers a Notice to Yissum within the Review Period, but the parties do not reach and
                                         finalize an agreement within ninety (90) days from the end of the Review Period (the
                                         “Negotiations Period”), Yissum shall be entitled to commercialize or otherwise
                                         grant third parties any right or title in and to Other Research Results according to
                                         Yissum' sole discretion and without any further obligation to the Company. For the avoidance
                                         of any doubt, uses of the patch to deliver chemical constitutes other than Cannabis developed
                                         prior to the Effective Date are not subject to this Section 3.7.

    	 	3	 

     

    

 

		4.	Responsibility
                                         for the Filing and Funding of Patent Applications Arising from the Study Results

		4.1.	Should
                                         the Company exercise the Option in a timely manner, the Company shall be responsible
                                         for ongoing costs in connection with the filing, prosecution and maintenance of any patents
                                         arising from the Study Results 

                                         (the “Study Results Patents”). 

 

		4.2.	In
                                         the event that the Company does not exercise the Option, the Company shall have no further
                                         rights whatsoever in the Study Results or in any Study Results Patent and shall not bear
                                         any costs related to same. In such case, Yissum shall be responsible for the filing,
                                         prosecution and maintenance of any patents arising from the Study Results, and shall
                                         be entitled to license such Study Results Patents to any party it so chooses.

 

		5.	Confidentiality

		5.1	Each
                                         Party warrants and undertakes to the other that during the term of this Agreement and
                                         subsequent thereto, it shall maintain full and absolute confidentiality, and shall also
                                         be liable for its officers, employees, representatives, or any other persons acting on
                                         its behalf maintaining absolute confidentiality, concerning all information, details
                                         and data which is in or comes to its knowledge or that of its officers, employees, representatives,
                                         or any other persons acting on its behalf directly or indirectly and relating to the
                                         Feasibility Study or the business of the other Party. Each Party undertakes not to convey
                                         or disclose anything in connection with the foregoing to any entity without the prior
                                         written permission of the Party which disclosed such confidential information.

 

		5.2.	The
                                         obligation contained in this section shall not apply to information which: 

 

		(a)	is
                                         in the public domain as of the Effective Date or hereafter comes into the public domain
                                         through no fault of a Party, its officers, employees, representatives or persons acting
                                         on its behalf; or 

		(b)	a
                                         Party can demonstrate through tangible evidence was in its possession before receipt
                                         from the disclosing Party or its Affiliates; or 

		(c)	the
                                         Party can demonstrate through tangible evidence was developed independently by that Party
                                         without reference to or reliance upon the disclosing Party's information; or 

		(d)	was
                                         disclosed to the Party without restriction on disclosure by a third party who has the
                                         lawful right to disclose such information.

 

		5.3.	Notwithstanding
                                         the above, a Party may disclose details and information to its officers, employees, representatives
                                         or persons acting on its behalf, and Affiliates as necessary for the performance of its
                                         obligations pursuant to this Agreement, provided that it procures that such parties execute
                                         a confidentiality agreement substantially similar in content to this Section 5 or are
                                         bound by confidentiality undertakings which are not less stringent than those specified
                                         above.

 

		5.4.	Without
                                         prejudice to the foregoing, the Company shall not mention the name of the HUJ, Yissum
                                         or the Researcher unless required by law or in connection with prosecuting and/or maintaining
                                         the Study Results Patents, in any manner or for any purpose in connection with this Agreement
                                         or any matter relating to the Feasibility Study, without obtaining the prior written
                                         consent of Yissum.

 

		5.5.	Notewithstanding
                                         the above, the Company as subsidiary of a public company who is subject to reporting
                                         obligations under the US Securities Act 1934, may be required under the applicable law
                                         to disclose to the public reports and information relating to this Agreement and/or the
                                         Study Report and/or the Study Results and/or the Study Results Patents and/or the patents
                                         application and such dislosure by the Company will not be deemed a breach of its obligations
                                         under this Section 5. 

 

		5.6.	Each
                                         Party shall be fully accountable and responsible for actions of any of its officers,
                                         employees, representatives or persons acting on its behalf (including in the case of
                                         Yissum, the Researcher and any other employees of HUJ) which constitute a breach of this
                                         Section 5.

 

		5.7.	The
                                         provisions of this section shall be subject to permitted publications pursuant to Section
                                         6, below.

    	 	4	 

     

    

 

		6.	Publications
                                         

Yissum,
subsequent to the execution of this Agreement, shall ensure that no publications in writing in scientific journals, or orally
at scientific conventions, relating to the Feasibility Study are published by it or the Researcher until Yissum, acting in its
sole discretion, has taken the necessary steps to protect any patentable invention being disclosed in such proposed publication.

 

		7.	Liability
                                         and Indemnity

		7.1.	YISSUM
                                         MAKES NO WARRANTIES OF ANY KIND WITH RESPECT TO THE FEASIBILITY STUDY. IN PARTICULAR,
                                         YISSUM MAKES NO WARRANTIES THAT ANY RESULTS OR INVENTIONS WILL BE ACHIEVED BY THE FEASIBILITY
                                         STUDY, OR THAT THE STUDY RESULTS, IF ANY, ARE OR WILL BE COMMERCIALLY EXPLOITABLE OR
                                         THAT THE STUDY RESULTS PATENTS, IF ANY, WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK
                                         OR OTHER RIGHTS OF ANY THIRD PARTY. YISSUM SHALL HAVE NO LIABILITY WHATSOEVER TO THE
                                         COMPANY OR TO ANY THIRD PARTY FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR DAMAGE, OF ANY
                                         KIND OR NATURE, SUSTAINED BY THE COMPANY OR BY ANY THIRD PARTY, FOR ANY DAMAGE ASSESSED
                                         OR ASSERTED AGAINST THE COMPANY, OR FOR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON
                                         THE COMPANY OR ANY OTHER PERSON OR ENTITY, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING
                                         FROM THE USE OF THE STUDY RESULTS.

 

		7.2.	The
                                         Company shall be liable for any loss, injury or damage whatsoever caused to its employees
                                         or to any person acting on its behalf or to the employees of Yissum, HUJ, or to any person
                                         acting on their behalf, or to any third party by reason of the Company's acts or omissions
                                         pursuant to this Agreement or by reason of any use made of the Study Results. 

 

 

		7.3.	The
                                         Company undertakes to compensate, indemnify, defend and hold harmless Yissum and HUJ,
                                         or any person acting on their behalf, including, without limitation, any of their employees
                                         or representatives (the “Indemnitees”) against any liability including,
                                         without limitation, product liability, damage, loss or expenses, including reasonable
                                         legal fees and litigation expenses, incurred by or imposed upon the Indemnitees by reason
                                         of its acts or omissions or which derive from the Company’s use of the Study Results.
                                         

 

		8.	Termination
                                         of the Agreement

		8.1.	Without
                                         prejudice to the Parties’ rights pursuant to this Agreement or at law, any Party
                                         may terminate this Agreement by written notice to the other Parites in any of the following
                                         cases:

 

		8.1.1.	Immediately
                                         upon such written notice, if: (i) a Party passes a resolution for voluntary winding up
                                         or a winding up application is made against it and not set aside within sixty (60) days;
                                         or (ii) a receiver or liquidator is appointed for a Party and was not removed within
                                         ninety (90) days; or (iii) a Party enters into winding up or insolvency or bankruptcy
                                         proceedings. The Parties undertake to notify the other Party within forteen (14) days
                                         if any of the abovementioned events occur.

 

		8.1.2.	Upon
                                         breach of this Agreement, where such breach has not been remedied within sixty (60) days
                                         from the breaching Party's receipt of the written notice of such breach.

 

		8.2.	In
                                         addition to the above, and without prejudice to Yissum's rights pursuant to this Agreement
                                         or at law, Yissum shall be entitled to terminate this Agreement upon thirty (30) days
                                         prior written notice to the Company in the following circumstances:

 

		8.2.1.	Unauthorized
                                         early termination by the Company of the Research Program or failure to pay the Research
                                         Fee as set forth in section 2.1. above; or

 

		8.2.2.	If
                                         an attachment is made over the Company's assets or if execution proceedings are taken
                                         against the Company and the same are not set aside within 90 days of the date the attachment
                                         is made or the execution proceedings are taken.

 

    	 	5	 

     

    

		8.3.	The
                                         Company may terminate this Agreement at the conclusion of the first stage of the Feasibility
                                         Study by providing Yissum with a written notice within fourteen (14) days of the Company’s
                                         receipt of the Interim Report.

 

		8.4.	The
                                         termination of this Agreement for any reason shall not release the Company from its obligation
                                         to carry out any financial or other obligation which it was liable to perform prior to
                                         the Agreement's termination. 

 

In
addition, Sections 5, 7, 8, 9 and 10 shall survive the termination of this Agreement to the extent required to effectuate the
intent of the parties as reflected in this Agreement.

 

		9.	Miscellaneous

		9.1	The
                                         provisions and interpretation of this Agreement, all matters related to this Agreement
                                         and everything concerning the relationship between the Parties in accordance with this
                                         Agreement shall be governed by Israeli law without application of any conflict of law
                                         rules. Any dispute arising from this Agreement shall be submitted to the exclusive jurisdiction
                                         of the Courts in Jerusalem.

 

		9.2	The
                                         Company shall not enter into any agreement or arrangement of any kind with the Researcher
                                         without Yissum’s prior written consent

 

		10.	Notices

All
notices and communications pursuant to this Agreement shall be made in writing and sent by facsimile or by registered mail or
electronic mail or served personally at the addresses set out in the Preamble to this Agreement or such other address furnished
in writing by one Party to the other. Any notice served personally or by electronic mail shall be deemed to have been received
on the day of service. Any notice sent by registered mail shall be deemed to have been received seven days after being posted
by prepaid registered mail. Any notice sent by facsimile shall be deemed to have been received by the next business day after
receipt of confirmation of transmission.

 

[signatures
on the following page]

 

 

    	 	6	 

     

    

IN
WITNESS THE HANDS OF THE PARTIES

 

 

	YISSUM	THE COMPANY
	 	 
	By:
/s/ Aviv T. Shoher	By: /s/Ronen Fata
	Name
& Title: Aviv T. Shoher	Name & Title: Ronen Fatal
	SVP
Business Development	CEO

 

 

I
the undersigned, Prof. Amos Nussinovich, have reviewed, am familiar with and agree to all of the above terms and conditions. I
hereby undertake to cooperate fully with Yissum in order to ensure its ability to fulfill its obligations hereunder, as set forth
herein.

	________________________________	________________________________
	 	 
	Signature	Date

 

    	 	7	 

     

    

 

Appendix
A

 

Commercial
Terms

 

 

		1.	For
                                         direct sales/services by the Company: 4% Royalties from Net Sales (as such term is defined
                                         in the License Agreement)

 

		2.	Sublicense
                                         Fee: 20% of all Sublicense Consideration received from a Sublicensee (as such terms is
                                         defined in the License Agreement) (i.e. in the event that the Company sublicenses the
                                         process to a third party) 

    	 	8	 

     

    

 

Appendix
B

 

The
Feasibility Study Program

 

Prospects:
the cannabis patch can be considered a platform, depending on its composition and the character of the ingredients included within
it.

 

Study
will immediately start upon conformation from היחידה לקנביס
רפואי (יק"ר)

 

Aims
of the study

1st
part – 6 months

To
include two cannabis constituents within a hydrocolloid based patch.

The
two main limitations of a patch are its adhesiveness, and the transferability of the included constituent.

We
advise to study the possibility of inclusion of the above constituents within a patch and studying the influence on its mechanical
properties and especially adhesiveness during the first 6 months of the research.

This
part include addition of the desired constituents and verify if the patch keeps its ability to serve as both the reservoir of
the inclusion as well as keeping its adhesiveness.

In
addition, a chemical analysis of the two active constituents will be performed.

The
cost of this stage is 50 K US $ not including the university overhead.

At
the end of this half year you shall receive a short report and be able to continue the study or stop it.

 

2nd
part – 6 months

To
study the delivery of the required constituents by using Franz cells and suitable membranes (via ex-vivo study).

This
part will be performed with the collaboration of Prof. Z. Roth from the animal science department. The cost of this stage
is 50 K US $ not including the university overhead.

In
parallel, we shall prepare, upon request, patches to be in vivo examined by a subcontractor. The payments for this activity are
not a part of this contract and will be payed directly to subcontractor by the "Canapatch" company.

At
the end of this part, a short report will be forwarded and a patent application should be considered.   

 

 

Budget:

Manpower
$33,125

Management
Fee (Prof. Nussinovich): $30,000

Materials:
$4,500

Equipment:
$10,000

Chemical
Analysis: $16,875

Miscalenous:
$5,500

Total:
$100,000

Including
Overhead: $135,000

 

	By:
/s/ Aviv T. Shoher	By: /s/Ronen Fata
	Name
& Title: Aviv T. Shoher	Name & Title: Ronen Fatal
	SVP
Business Development	CEO

 

	________________________________	________________________________
	 	 
	Date	Date

 

 

 

I
the undersigned, Prof. Amos Nussinovich, have reviewed, am familiar with and agree to all of the above terms and conditions. I
hereby undertake to cooperate fully with Yissum in order to ensure its ability to fulfill its obligations hereunder, as set forth
herein.

	________________________________	________________________________
	 	 
	Signature	Date

 

 

    	 	9

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