Document:

Exhibit

Exhibit 10.55

September 24, 2019

Timothy C. Dugan
312 Braeburn Drive
McMurray, PA  15317

Dear Timothy,

As previously discussed and publicly disclosed, your employment with CNX Resources Corporation (the “Company”) will terminate effective December 31, 2019 (unless you earlier voluntarily terminate your employment with the Company or you are earlier terminated by the Company “for cause”) (the earliest of such dates being the “Termination Date”).  As of the Termination Date, you are no longer expected or required to provide any services to the Company, except as provided in this agreement.  Further, you agree that, effective as of the Termination Date, you hereby resign from all other positions you hold as an officer or director of the Company or any of its subsidiaries and affiliates.
Prior to the Termination Date you shall continue to be employed as an Executive Vice President of the Company.  In such capacity, you shall have such responsibilities, powers and duties as may from time to time be prescribed by the Chief Executive Officer or the Board of Directors, consistent with the role of Executive Vice President, which may include:  (i) the orderly transition of the responsibilities and duties of the chief operating officer to the new chief operating officer, (ii) maintaining and transitioning to the new chief operating officer customer, commercial, financial, shareholder and other relationships which are important to the Company, and (iii) providing advice and guidance to the new chief operating officer, as requested by the new chief operating officer.  You shall devote as much of your working time and efforts to the business and affairs of the Company and its subsidiaries as is necessary to effectively carry out the foregoing duties and responsibilities.  You shall not directly or indirectly render any services of a business, commercial or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the Company; provided, however, that nothing in this agreement shall preclude you from managing your personal investments and serving as a director of a not-for-profit organization.  In consideration for the foregoing, you will receive the following:
		
	1.
	Ongoing Wages:  Your wages based on your current salary for your employment up to the Termination Date will be paid to you in accordance with the normal payroll practices of the Company.

		
	2.
	Benefits:  You shall be entitled to participate in all employee benefit plans made available by the Company to its employees upon the terms and subject to the conditions set forth in the applicable plan or arrangement up to the Termination Date.

		
	3.
	Expenses:  The Company shall reimburse you for all reasonable expense incurred by you in the course of performing your duties up to the Termination Date, subject to the Company’s requirements with respect to reporting and documentation of expenses.

At the Termination Date, as a consequence of the termination of your employment, you are entitled to receive the following:
		
	1.
	Final Wages:  Your wages for your work through your Termination Date already have been paid to you or will be paid to you on the next payroll date when those wages would otherwise be due.

		
	2.
	Accrued and Unused Vacation:  The Company already has or will pay you for unused vacation time for 2019 as of the Termination Date (less applicable withholdings and deductions) on the next payroll date.

We remind you that, after the Termination Date, you continue to be bound by the Company’s policies and your contractual commitments regarding the protection of confidential business information, which of course are subject to any laws that require or permit disclosure of such confidential information.
In addition to the compensation and benefits described above, in recognition of your years of service to the Company and (i) provided that you do not voluntarily terminate your employment by the Company prior to December 31, 2019; (ii) provided that you are not terminated by the Company “for cause” prior to December 31, 2019; and (iii) provided that you have delivered a signed Release of claims (“Release No. 2”), substantially similar to the Release set forth below and otherwise reasonably satisfactory to the Company’s General Counsel within 21 days after the Termination Date and not revoked such Release No. 2 within the seven-day revocation period provided for in Release No. 2, the Company will provide the following additional compensation and benefits (the “Severance Payment and Benefits”) to you:
		
	1.
	Severance Payment:  The Company will pay you a lump sum payment of $100,000 (less applicable withholdings and deductions) on the first regular payroll date following the Termination Date and your execution and return of the referenced Release No. 2 and your non-revocation of such Release No. 2 during the seven-day Revocation Period described below.

		
	2.
	Unemployment:  The Company will not object to any application that you might make for unemployment benefits.  Your eligibility for such benefits will be determined solely by the state where such an application for unemployment is filed.

		
	3.
	Non-Compete:  Notwithstanding anything to the contrary contained herein or in any other Company document or otherwise, you will not be precluded from working for a competitor of the Company and its affiliates and subsidiaries.

Release No. 1
By signing and not revoking this letter agreement (which includes this Release No. 1), as described herein, you shall release CNX, and all of its affiliated companies, direct and indirect parents, subsidiaries, affiliates, successors, and assigns (collectively, the “CNX Companies”) and all of their current and former shareholders, partners, principals, members, directors, officers, agents, employees, employee benefit plans, trustees, insurers and all others acting in concert with them (collectively, the “Released Persons”), from any and all claims you have or might have against them as the result of events 

that occurred on or before the date you execute the Release, whether known or unknown, except for the rights described in the next paragraph.  The claims released by you include, without limitation, all claims relating in any way to your employment with the CNX Companies, the termination of your employment, claims for wrongful discharge or retaliation, claims related to any purported status as a whistleblower, and any cause of action or claim you have or might have for an alleged violation of any express or implied contract, or federal, state, or local law, including (without limitation) state and federal statutes or laws, as amended, that prohibit discrimination or retaliation in employment based on any protected status, including, but not limited to, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Civil Rights Acts of 1866 and 1871, the Pregnancy Discrimination Act, the National Labor Relations Act, the Racketeer Influenced and Corrupt Organizations Act, the Rehabilitation Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act, the Worker Adjustment and Retraining Notification Act (“WARN Act”), Ohio Civil Rights Act, Ohio Minimum Fair Wage Law, Ohio Wage Payment Law, Pennsylvania Human Relations Act, Pennsylvania Minimum Wage Act of 1968, Virginia Human Rights Act, Virginians with Disabilities Act, Virginia's Genetic Testing Law, Virginia Equal Pay Act, Virginia Minimum Wage Act, West Virginia Human Rights Act, West Virginia Minimum Wage and Maximum Hour Standards Law, West Virginia Equal Pay for Equal Work Act, and any other state, federal or local law, rule or regulation, the common law for negligence, gross negligence, or any other tort claim, including but not limited to, intentional infliction of emotional distress, assault, battery, invasion of privacy, false imprisonment, breach of express or implied contract, interference with contractual relations, additional wages or benefits that may be owed (whether pursuant to the accrued and unused vacation policy, the CNX Resources Corporation Severance Pay Plan for Salaried Employees, equity awards granted under the CNX Resources Equity Incentive Plan (other than equity that vested prior to the Termination Date), the short-term incentive program under the Executive Annual Incentive Plan, any employment agreement or change in control agreement to which you may be a party, or otherwise), covenants of fair dealing and good faith, civil conspiracy, duress, promissory or equitable estoppel, defamation, slander, fraud, mistake, misrepresentation, violation of public policy, overtime, retaliation, personal injury, breach of fiduciary duty, loss of consortium, bad faith, any other wrongful conduct and claims under any federal, state or local laws, statutes, regulations, ordinances, or other similar provisions, and any claims for attorneys’ fees and costs.  If any administrative agency or court assumes jurisdiction over any charge, complaint, proceeding, or action involving claims released in this agreement, you agree that you will not accept, recover, or receive any monetary damages or other relief from or in connection with that charge, complaint, or proceeding.  You agree that if a court of competent jurisdiction determines that you are to be awarded damages under the WARN Act or any other federal or state law, those damages would be offset by an amount equal to your above severance payment minus $500.  You also agree that you have not assigned or transferred to another person or entity any interest in any of the above stated claims.
You have certain rights that are not released by signing this letter agreement, which includes this Release No. 1.  Such Release No. 1 does not affect the following:  any rights or claims that may arise after the date this letter agreement is executed; your right to enforce the Company’s obligations under this agreement; any rights you may have to vested CNX Companies’ pension or retirement benefits that you are entitled to on the date of execution of this agreement and/or the Release by you; your right to receive workers’ compensation benefits; your right to file a charge or complaint with any appropriate federal, state, or local agency, such as the United States Equal Employment Opportunity Commission; your right 

to participate in or cooperate with any such charge or complaint procedure; and any right that cannot be waived as a matter of law.  Any other claim you have or might have is, however, released by such Release No. 1.
By signing this letter agreement, which includes this Release No. 1, you are also representing and agreeing that, except for wages to be paid to you regardless of whether you sign this letter agreement, as described herein, and the Severance Payment and Benefits to be paid under the terms of this agreement, you have been paid in full for all other wages and benefits to which you are entitled.
***
You and the Company agree that certain materials, including, but not limited to, information, data and other materials relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion credit and financial data, manufacturing processes, financial methods, plans or the business and affairs of the Company and its affiliates, constitute proprietary confidential information and trade secrets.  Accordingly, you will not at any time during or after your employment with the Company disclose or use for your own benefit or purposes or the benefit or purposes of any Person, other than the Company and any of its affiliates, any proprietary confidential information or trade secrets.  The foregoing obligations imposed by this paragraph will not apply (i) in the course of the business of and for the benefit of the Company, (ii) if such information has become, through no fault of yours, generally known to the public, or (iii) if you are required by law to make disclosure (after giving the Company notice and an opportunity to contest such requirement).  You agree that upon the Termination Date, you will immediately return to the Company all memoranda, books, paper, plans, information, letters and other data, and all copies thereof or therefrom, which in any way relate to the business of the Company and its affiliates.  You further agree that you will not retain or use for your account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company or any of its Affiliates.
The Company agrees that if you are made a party, or are threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that you are or were a director, officer or employee of the Company or are or were serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, you shall be indemnified and held harmless by the Company to the fullest extent permitted or authorized by applicable law and the Company’s certificate of incorporation or bylaws, against all cost, expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by you in connection therewith, and such indemnification shall continue as to you even if you have ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of your heirs, executors and administrators.
The provisions of this letter agreement may be amended or waived only by a written agreement executed and delivered by the Company and you.  No other course of dealing between the parties to this agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties.  Notwithstanding the foregoing or any provisions of this letter agreement to the contrary, the Company may at any time, with your consent, modify or amend any provision of this agreement or take any other action, to the extent necessary or advisable to ensure that this letter agreement complies with or is exempt from Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and that 

any payments or benefits under this agreement are not subject to interest and penalties under Section 409A of the Code.
All covenants and agreements contained in this letter agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective heirs, successors and assigns of the parties hereto whether so expressed or not, provided that you may not assign your rights or delegate your obligations under this agreement without the written consent of the Company and the Company may assign this agreement only to a successor to all or substantially all of its assets.
If any dispute arises with regard to the interpretation and/or performance of this letter agreement or Release No.1, as set forth above, or any of the provisions contained therein, the parties agree to attempt to resolve the dispute by telephone conference with a mediator jointly selected by the parties.  If the parties cannot resolve the dispute by such telephone conference, then the parties agree to schedule and conduct a half-day mediation within thirty (30) days of notice of the dispute and to share equally the costs of such mediation.  If a party refuses to mediate, then such party thereby waives any claim for and recovery of attorneys’ fees or costs incurred in any litigation brought regarding this agreement.  Otherwise, if the parties are unable to resolve their dispute by mediation, then the prevailing party or parties in any resulting litigation shall be entitled to recover reasonable attorneys’ fees, costs and expenses, including the costs of mediation.  This agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.  The descriptive headings of this agreement are inserted for convenience only and do not constitute a part of this agreement.
The Company may withhold from any amounts payable under this letter agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
This letter agreement shall become effective on the date set forth below.  On and after the effective date, this letter agreement constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof.
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW OF PENNSYLVANIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
You have up to and including 21 days from the date you receive this letter agreement to consider the terms of this agreement as proposed by the Company, including the terms of Release No. 1, as set forth herein.  Any modification to these proposed terms, whether material or immaterial, does not restart the running of the 21-day period.
If you decide to sign this letter agreement, and thereby accept the terms of this agreement, you may then revoke your acceptance of it up to seven days after signing it (“Revocation Period 1”), by notifying me in writing before the expiration of Revocation Period 1.  This agreement will not become effective until the expiration of Revocation Period 1; provided, however, that the Company’s obligation to pay the Severance Payment and Benefits will not become effective until the expiration of Revocation Period 2, as defined herein.  On the Termination Date, the referenced Release No. 2, as described above, will be provided to you and if you decide to sign Release No. 2, and thereby accept the terms of Release No. 2, you may then revoke your acceptance of it up to seven (7) days after signing it (“Revocation Period 2”), by notifying me in writing before the expiration of Revocation Period 2.  Release No. 2 and 

the Company’s obligation to pay the Severance Payment and Benefits will not become effective until the expiration of Revocation Period 2.
If this letter agreement is not signed and returned by October 15, 2019 (21 days from the date of this letter), then this offer is revoked by the Company.  This letter agreement must be delivered by email or hard copy to me within the time specified herein in order to be effective.
You should not sign this letter agreement if you do not understand its terms, including the terms of Release No. 1.  By signing this letter agreement, you affirm that you have read its terms, including the terms of Release No. 1, that you understand those terms and effects, including the fact that you have agreed to release employment-related claims, that you have signed this letter agreement voluntarily and knowingly in exchange for the consideration described herein, which you acknowledge is adequate and satisfactory and which you acknowledge is in addition to other benefits to which you would be entitled, and that you have been advised in writing to consult with an attorney prior to signing this letter agreement.
If all of the above terms are agreeable to you, please sign the enclosed copy of this letter where indicated below and return it to me via email (at stephaniegill@cnx.com) or hard copy (1000 CONSOL Energy Drive, Canonsburg, PA 15317-6506) by October 15, 2019.  Please direct any questions to me.
Sincerely,
CNX RESOURCES CORPORATION
BY:    /s/ Stephanie L. Gill    
Stephanie Gill
Vice President, General Counsel & Corporate Secretary
I knowingly and voluntarily agree to the above terms this 24th day of October, 2019, intending to be legally bound.
/s/ Timothy D. Dugan
Timothy C. DuganBlueprint

Exhibit
4.01

EXHIBIT 4.01

 

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

 

 

Freedom Holding Corp.

 

 

(incorporated with limited liability under

 

 

the laws of the State of Nevada,

 

 

United States of America)

 

 

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

 

 

NOTES DUE 2022 (ISIN: KZX000000294)

 

 

issued
by Freedom Holding Corp.

 

 

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

 

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

 

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

 

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

 

 

1

 

 

 

	

Definitions

 

	

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

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

“AIFC”
means the Astana International Financial Centre;

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

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

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

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

“Depository”
means the AIX CSD;

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

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

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

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

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

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

“Issue
Date” means 27 December 2019;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“United
States” means the United States of
America;

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

 

 

 

2

 

 

	

Aggregate Principal Amount of the Notes

 

	

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

 

	

Note Issue Price

 

	

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

 

	

Currency

 

	

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

 

	

Note ISIN

 

	

KZX000000294

 

	

Placement of the Notes

 

	

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

 

	

Note Form and Denomination

 

	

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

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

 

	

Register, Title and Transfer

 

	

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

 

 

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

 

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

 

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

 

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

 

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

 

 

	

Role of Registrar

 

	

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

 

 

 

3

 

 

	

Status of the Notes

 

	

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

 

	

Interest

 

	

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

 

	

Payments

 

	

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

 

 

Principal and Interest

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

 

 

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

 

 

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

 

 

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

 

 

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

 

	

Penalty

 

	

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

 

 

 

4

 

 

	

Non-business Days

 

	

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

 

	

Redemption

 

	

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

 

	

Early Redemption

 

	

Early redemption at the option of the Issuer

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

 

 

Early redemption at the option of Holders of the Notes

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

 

 

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

 

 

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

 

	

Open Market Purchases

 

	

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

	

Events of Default

 

	

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

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

 

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

 

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

 

 

 

5

 

 

	

Other Obligations of the Issuer

 

	

So long
as the Notes remain outstanding:

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

 

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

 

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

 

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

 

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

 

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

 

 

	

Listing and Admission to Trading

 

	

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

 

	

Estimated Expenses

 

	

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

 

 

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

 

	

Investment Restrictions

 

	

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

 

 

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

 

 

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

 

 

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

 

 

 

6

 

 

	

Taxation

 

	

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

 

 

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

 

 

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

 

 

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

 

	

Placement Methods, Delivery, Clearing and Settlements

 

	

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

 

 

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

 

 

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

 

	

Notices

 

	

To the Holders of the Notes

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

 

 

To the Issuer

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

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

 

 

 

7

 

 

	

Amendments

 

	

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

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

 

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

 

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

 

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

 

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

 

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

 

	

Authorizations

 

	

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

 

	

Use of Proceeds

 

	

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

 

 

 

8

 

 

	

Risk Factors

 

	

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

 

 

Risks related to the Issuer

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

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

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

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

● We
may suffer significant losses from credit exposures.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks related to the Note Offering

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

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

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

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

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

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

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

 

 

 

9

 

 

	

Applicable Law and Jurisdiction

 

	

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

 

	

Future Issuances

 

	

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

 

	

Noteholder Meetings

 

	

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

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

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

 

	

Headings

 

	

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

 

  

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}]]