Mitigación de impactos – paisaje

As set out in Part I (Information on the Paysafe Group), the Paysafe Group is intending to pursue a strategy aimed at strengthening their presence in the US gambling market and, therefore, whilst the level of revenue currently derived from the US online gambling market is small, an overview of the US online gambling regime is included in this Part II.

Paysafe Group’s US Business Prior to 2007

11.1 Prior to 2007, the Paysafe Group processed payments in connection with online gambling in

the USA. However, the Paysafe Group terminated all US-facing online gambling-related activities as a result of the introduction of the Unlawful Internet Gambling Enforcement Act (‘‘UIGEA’’) in the US in 2006, which banned processing of payments related to illegal online gambling.

11.2 The Paysafe Group’s historic US business consisted of the following:

Neovia

11.3 The Neovia business was founded in 1999 as NETeller Inc. in Calgary, Canada. With effect

from 31 December 2003, NETeller Inc. transferred its business and undertaking to Paysafe (at the time known as NETeller plc).

11.4 Neovia’s processing almost exclusively involved the use of the ‘‘NETELLER!’’ stored-value

e-Wallet. E-Wallets allowed customers to maintain funds in the ‘‘wallet’’ and then direct that they be deposited with participating merchants. Similarly, customers could withdraw funds from a merchant back to the e-wallet and, if desired, back to their individual bank accounts. Methods of funding included credit card, ACH and wire-transfer, among others. Within days of enactment of the UIGEA in October 2006, Paysafe publicly announced its intention to withdraw from the US market. Paysafe communicated its intention to terminate its US-facing activity within 270 days of the statute’s enactment. It chose that timeframe in light of the expectation, set out in the UIGEA itself, that regulations implementing the law would be issued by that date.

11.5 However, events rapidly overtook the Paysafe business. On 15 January 2007, the Office of

the United States Attorney for the Southern District of New York (‘‘USAO’’) arrested two

former senior executives and founding shareholders of NETeller Inc. and seized

approximately US$60 million in funds belonging to Paysafe’s US customers that were in transit at Paysafe’s US processing partners. At the same time, the US Government obtained orders that prohibited Paysafe from engaging in any further transactions with US banks, effectively preventing US customers from withdrawing their funds.

11.6 The two former founders of NETeller Inc., neither of whom was an employee of Paysafe at

the time of their arrests, were charged with intent to promote unlawful gambling activity in violation of federal and state laws. Neither the two founders nor any member of the Paysafe Group were charged with fraud or any similar offence. The USAO’s allegations centred exclusively on gambling and unlicensed money transmitting violations.

11.7 As a result of the US government actions, Paysafe, on 18 January 2007, suspended all US gambling- related processing and negotiated a plan to facilitate the complete return of funds to its US customers. Ultimately, both former founders pled guilty to a single count of conspiracy to violate US gambling and money-transmitting laws and agreed to a combined forfeiture of US$100 million. Shortly thereafter, on 17 July 2007, Paysafe entered into a

deferred prosecution agreement (‘‘DPA’’) with the USAO, resolving its past US-facing

activity. The DPA provided for forfeiture of US$136 million, completion of the return of funds to US customers and the appointment of a forensic accounting firm to monitor Paysafe’s activities in order to ensure that it continued to comply with the bar on US-facing gambling- related transactions. The DPA also imposed an on-going obligation to cooperate with any further USAO inquiries. In return, the USAO agreed to defer any prosecution for (non-tax) violations for two years. All customers subsequently had their monies returned, and the USAO obtained dismissal of the complaint and terminated the DPA in August 2009.

Optimal Payments

11.8 On 20 January 2011, Paysafe acquired the online payments business and substantially all of

the assets of 7012985 Canada Inc., which included Optimal Payments Inc. (‘‘OPI’’). OPI,

directly or through its subsidiaries, had offered two alternatives for processing transactions which was used for the US online gambling market – ‘‘straight-through’’ processing (pursuant to which the customer deposited funds directly with the merchant) and ‘‘stored-value’’ e- wallet services, branded under the name ‘‘FirePay’’ Both the ‘‘straight-through’’ and ‘‘e- Wallet’’ options allowed for credit-card or ACH methods of funding. Upon enactment of the UIGEA on 13 October 2006, OPI immediately ceased all US gambling-related deposits and arranged the return of all funds that it was holding on behalf of US customers.

11.9 In October 2009, Optimal Payments Group Inc. (‘‘OGI’’) (the parent of OPI throughout the

relevant period) negotiated a non-prosecution agreement (‘‘NPA’’) with the USAO. OGI

agreed to a forfeiture of $19,182,418.18 and to cooperate with any further requests for information or assistance that the USAO may make. To the Directors’ knowledge, none has been forthcoming. OGI also agreed to refrain from providing payment processing services for gambling merchants in connection with US customers ‘‘in violation of the law of the United States or the law of any jurisdiction within the United States.’’

11.10 OGI sold the assets of the payment businesses and rights to use of the Optimal Payments name in 2008 to 7012985 Canada Inc. Because the transaction was an asset purchase, all obligations under the NPA remain with OGI. Nonetheless, Paysafe (and, before it, Optimal Payments Inc., the entity that acquired the OGI payments assets and right to use the Optimal Payments name) has continued to abide by the restriction on US gambling-related processing activities.

Paysafe Group’s Current US Business

11.11 Some States (New Jersey, Delaware and Nevada) in the US have recently introduced regulations permitting processing of payments related to regulated online gambling.

11.12 None of those jurisdictions requires licensing of payment processors that perform the services Paysafe provides. In New Jersey, Paysafe is required to register as a vendor with the New Jersey Division of Gaming Enforcement (the ‘‘Division’’). It has done so and been determined suitable by that Division. The Delaware Lottery Commission has confirmed that Paysafe is compliant with all Delaware Lottery regulations and that a licence is not required. No licensing or registration is required in Nevada. Paysafe has corresponded with the

Nevada Gaming Control Board (the ‘‘NGCB’’) and so far as the Directors are aware NGCB

has not objected to Paysafe’s provision of services in that state.

11.13 The Paysafe Group provides gateway services to several licensed operators in the regulated states, including Caesars, Tropicana and Resorts. Brands operating under these operators include wsop.com, 888.com, resortcasino.com and tropicanacasino.com. In 2014, Paysafe launched a Net+ prepaid card stored value product for the US market which can be used for online gambling. Paysafe has obtained money transmission licences in New Jersey, Delaware, Idaho, North Dakota and Iowa; however, for purposes of the Net+ prepaid card product it has contracted with a reputable third party such that no licence is currently needed.

11.14 Prior to Completion, the Skrill Group completed an intra-group restructuring to transfer Skrill USA Inc. outside the Skrill Group to Sentinel Group Holdings S.A. Paysafe has commenced the process for obtaining the required approvals in connection with Skrill USA Inc.’s money transmitter licences from the relevant US states or territories in order for the Paysafe Group to be able to acquire Skrill USA Inc. and has started to receive regulatory approvals from some of the relevant US states and territories. The transfer of Skrill USA Inc. to Sentinel Group Holdings S.A. was carried out at market value and the consideration (which is

e5.2 million) was left outstanding as a loan between Skrill Holdings Limited and Sentinel Group Holdings S.A. In addition, Skrill Holding Limited has also provided Skrill USA Inc. with a funding loan for working capital purposes. Assuming that the required approvals are received in a timely fashion, Skrill Holdings Limited will repurchase Skrill USA Inc. on receipt of the relevant approvals and the consideration for that transfer will be the release of

Sentinel Group Holdings S.A.’s obligation to repay the e5.2 million loan owed to Skrill

Holdings Limited (and therefore Skrill Holdings Limited will not be required to raise any funds to finance the acquisition).

11.15 Sentinel Group Holdings S.A. has agreed that it will not sell Skrill USA Inc. to a third party for a period of six months after Completion. If Skrill Holdings Limited has not obtained the relevant approvals to enable Skrill USA Inc. to be transferred to Skrill Holdings Limited within the six month period following Completion, Sentinel Group Holdings S.A. shall be permitted to sell Skrill USA Inc. to a third party. In the event Skrill USA Inc. is sold to a third party, Sentinel Group Holdings S.A. will use reasonable endeavours to sell Skrill USA Inc. for the best possible purchase price, and the proceeds of that sale shall be used to repay the loans put in place between Skrill Holdings Limited and both Sentinel Group Holdings S.A. and Skrill USA Inc., and any excess loan amount that remains outstanding (whether relating to the working capital loan or the consideration for the transfer of Skrill USA Inc.) shall be waived by Skrill Holdings Limited. If Skrill USA Inc. is sold to a third party, the Paysafe Group intends to commence applying for its own money transmitter licences in the US in order to enable it to process payments in the US. The Paysafe Group has already obtained money transmitter licences in New Jersey, Delaware, Iowa, North Dakota and Idaho.

11.16 There are some US States that are considering licensing online gambling. Until and unless those states authorise online gambling (or a federal law is enacted permitting such activity), Paysafe Group will not process online gambling related transactions in those jurisdictions.

PART III