Memorandum of Understanding
This Memorandum of Understanding (“MoU”) is between Social Investment Managers and Advisors llc, a Delaware limited liability company registered with company number 5783072 whose registered office is at 000 Xxxxxxxx Xxxxxx Xxxxx 000, Xxx Xxxx, XX 00000, (“SIMA”), and, Yellow Digital Retailers Ltd, a private company limited by shares incorporated under Section 24 of the Companies Act, with Business Reg. No X00000000, having its registered office at 7th Floor, Tower 0, XxXXxxxxxx, Xxxxxxxxx, Xxxxx 00000, Mauritius (“Yellow Solar”).
A.General Understandings
1.The purpose of this MoU is to guide the parties respecting potential crowdlending campaigns on xxx.xxxxxxxxxxxxxxxxxx.xxx in order to use best efforts to conduct digital marketing campaigns to fundraise for and facilitate an initial $250,000 loan (“Loan”), sourced from US crowdlenders and provided to Yellow Solar. Upon successful completion of an initial loan, the parties expect to add successive Sow Good digital marketing campaigns to cumulate a total of $2 million in loans (“Loans”) to Yellow Solar.
2.XXXX is an SEC registered investment manager, and manages the SIMA Off-Grid Solar and Financial Access Senior Debt Fund I B.V. (“Fund I”), the SIMA Energing Distributor Finance Fund B.V., the Energy Access Relief Fund B.V., the SIMA Commercial and Industrial Solar Green Bond, B.V. and other impact investments. XXXX also has a business relationship with Yellow Solar, including through EARF which has had loans outstanding to Yellow Solar for nearly three years. Accordingly, XXXX is well positioned to work with Yellow Solar to present the particular attributes (business and impact) of Yellow Solar as an attractive crowdlending impact investment opportunity. XXXX agrees to seek Yellow Solar approval for disclosures of non-public information for marketing purposes and to abide by any mutual non-disclosure agreement between to parties.
3.XXXX manages Sow Good Investments xxx.xxxxxxxxxxxxxxxxxx.xxx (“Sow Good”) one of the first impact investment crowdlending sites in the United States. Sow Good is designed to conduct online and social media campaigns to attract US individual crowdlender investors, and facilitate loans to borrower companies which provide financial returns and report on social and environmental impact.
x.Xx terms of digital marketing and to help ensure successful crowdlending campaigns, XXXX has engaged Funded Inc. xxx.xxxxxx.xxx a California-based digital marketing and investor acquisition firm with wide experience in conducting successful crowdlending campaigns. Funded will work with XXXX and Yellow Solar to develop and conduct SowGood’s crowdlending campaigns for the loans to Yellow Solar.
x.XXXX has engaged Xxxxxxx Xxxx & Xxxxxxx LLP, based in Salt Lake City, a law firm with extensive experience in securities approvals from the Securities and Exchange Commission (SEC) in the US and crowdlending, to assist XXXX in obtaining legal and regulatory approvals for the Sow Good loans.
4.Yellow Solar is a lean, fast growing and well established Solar Home System (SHS) distributor and smartphone financier which has cumulatively served over 543k customers in Malawi, Madagascar, Rwanda, Zambia and Uganda. It’s investors, funders and stakeholders include well-known and highly regarded impact and commercial investors. Yellow Solar intends to target future SHS growth in Madagascar as a relatively new market and it is intended that the eventual Sow Good loans will help to finance this growth. Sow Good intends to conduct marketing campaigns which generally familiarize US crowdlenders with Yellow Solar’s general business performance, business model, how their products are delivered and serviced, how the products beneficially impact customers, etc. Yellow Solar’s profile is expected to align well with the interests of US crowdlenders, especially in terms of innovation, strong business performance, demonstrable social and environmental impacts at the employee and customer level, etc. Along with excellent business performance, impacts such as increased employment, reduced CO2 emmissions, access to clean energy are compelling and align with UN Sustainable Development Goals (SDGs) 7, 8 and 13, and other initiatives, etc.
5.SIMA has obtained USAID funding to provide credit enhancement to crowdlenders on the Sow Good platform. SIMA will use its best efforts to enhance any eventual Yellow Solar Loan with this protection, and thus increase the Loan’s attractiveness to US crowdlenders.
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6.Yellow Solar is interested to work with XXXX to help develop the US crowdlending market, and agrees to work with XXXX on a best efforts basis to structure an initial $250,000, 2- year, senior loan at an approximate 8.5% USD interest rate (subject to market conditions), thus affording an approximate $7.5% (subject to market conditions) return rate to crowdlenders. Once the initial loan is made, the parties agree to use best efforts to conclude subsequent crowdlending loans cumulating up to $2 million.
X.Xxxx Contours
1.Principal Amount:Initial $250,000, to be followed by a series of similar Loans totalling $2 million
2.Interest Rate in USD:8.5% (subject to market conditions and FX hedging)
3.Tenor:2 years / 24 months
4.Rank:Senior loan
5.Documents:Loan Agreement. SIMA shall use its best efforts to use as a template loan documentation which Yellow Solar already has in place.
6.Utilization of Proceeds:Working capital
7.Interest Payments:Bi-Annual
8.Principal Repayment:Bullet
0.Xxxxx Costs:SIMA and Yellow Solar shall each bear their own legal costs and expenses
10.ESG Compliance:Compliance with relevant Environmental, Social and Governance requirements as may be required by USAID and/or applicable law.
11.Impact:The Borrower to report [biannually] on progress towards mutually agreed social and environmental goals.
12.Timeline:
x.Xx is expected that obtaining SEC approval and completing the crowdlending campaign(s) and obtaining regulatory approvals may take as long as 6 months for the initial Loan.
b.Time frames for completing each subsequent series of Loans are expected to be completed on a monthly basis after the Initial Loan.
13.Conditions Precedent:
a.Regulatory Approval: XXXX will use best efforts to obtain receipt of regulatory approval for the Loan(s)
b.Due Diligence: satisfactory completion of further due diligence by XXXX.
14.Confidentiality and Publicity:
x.XXXX and Yellow Solar agree to obtain each other’s mutual consent for any press releases or publicity, marketing or crowdlending material, including that which might contain non-public information.
b.The terms herein, as well as the fact that the proposed Loan is being negotiated, are confidential and may not be disclosed to any third parties (other than affiliates) except as mutually agreed in advance.
15.Jurisdiction: The proposed transaction is proposed to be governed by the laws of the State of New York, USA
The parties agree this MOU merely constitutes a statement of the parties’ present mutual intentions with respect to a proposed loan and credit facility, and that no binding obligations will be created unless and until completion of Conditions Precedent, the proposed transaction has been approved for regulatory and compliance purposes and definitive documentation is executed and delivered by the parties.
Date:April 2, 2024
| Social Investment Managers and Advisors, LLC |
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| By: |
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| Name: | Xxxxxxx Xxxxxxxxxx |
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| Title: | Managing Partner |
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| Yellow Solar |
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| By: |
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| Name: | Xxxxxxx Xxxxxxxx |
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| Title: | Group Chief Financial Officer |
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