EML PAYMENTS LIMITED — Capital/Financing Update 2015

Dec 30, 2015

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Emerchants Limited

ABN

93 104 757 904

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

• 1 +Class of +securities issued or to Unlisted options under the Company’s be issued Employee Share Option Plan (ESOP)

• 2 Number of[+] securities issued or 3,750,000 unlisted options to be issued (if known) or maximum number which may be issued

• See chapter 19 for defined terms.

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• 3 Principal terms of the[+] securities Options issued under the ESOP will vest on (e.g. if options, exercise price the following terms: and expiry date; if partly paid +securities, the amount 1. The Company must have achieved an EBITDA per share of at least AUD 0.091

• outstanding and due dates for payment; if +convertible (9.1 cents) per share with the measure having the same definition as EBITDA in

• securities, the conversion price and dates for conversion) the Company’s audited GAAP financials; and

• 1. The Company achieves three or more of the following five key metrics ( Performance Hurdles ), where EBITDA or EBIT must be one of the achieved targets: a. Total loads for FY 18 being equal to or greater than $1.8 billion;

• b. Revenue for FY18 being equal to or greater than $40 million;

• c. Total active accounts at the end of FY18 in excess of 2m;

• d. EBITDA for FY18 being equal to or greater than $18m; and/or

• e. EBIT for FY18 being equal to or greater than $16m.

• 1. Expiry date, provided the Performance Hurdles have been met, is 30 September 2018; and
• 1. Exercise price of $0.87.

• 4 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted[+] securities?

No. The shares to be issued on conversion of the options if they vest will rank equally with the Company’s quoted securities.

• If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 5 Issue price or consideration

$0.87 exercise price should the options vest.

6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements	Options issued pursuant to the ESOP.
	Yes.
	12 November 2015
	N/A
	N/A
	N/A
	3,750,000 options
	N/A
	N/A

• See chapter 19 for defined terms.

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• 6i Calculate the entity’s remaining Remaining capacity under 7.1 – 28,594,406

• issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 Remaining capacity under 7.1A – 19,062,937 and release to ASX Market Announcements Total: 47,657,343

• 7 +Issue dates Issue dates 31 December 2015

7 +Issue dates Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B.

8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	184,345,719 2,768,624 3,051,392 750,000 223,214 113,636	EML fully paid ordinary shares EML fully paid ordinary shares in escrow to 02/01/2016 EML fully paid ordinary shares in escrow to 01/02/2016 EML fully paid ordinary shares in escrow to 1/07/2016 EML fully paid ordinary shares in escrow to 19/11/2016 EML fully paid ordinary shares in escrow to 01/12/2017 Total: 191,352,585
	Number	+Class

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	2,500,000 500,000 1,700,000 1,212,121 100,000 500,000 100,000 500,000 1,000,000 3,750,000	$0.10 options expiring 31/3/2016, exercisable 1/3/2016 Nil exercise price options expiring 30/6/16, vesting 28/2/16 $0.40 options expiring 30/9/2016, vesting 1/9/2016 Nil exercise price options expiring 30/9/2016, vesting 1/9/2016 $0.56 options expiring 18/11/2016, vesting 11/11/2016 Nil exercise price options expiring 30/6/17, vesting 28/2/17 $0.56 options expiring 18/11/2017, vesting 11/11/2017 Nil exercise price options expiring 30/6/18, vesting 28/2/18 $0.87 options expiring 30/9/18, vesting upon achievement of performance hurdles 30/8/18 $0.87 options expiring 30/9/18 vesting upon achievement of performance hurdles 30/8/18

• See chapter 19 for defined terms.

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10 Dividend policy (in the case of a N/A trust, distribution policy) on the increased capital (interests)

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which 3,750,000 +quotation is sought 39 +Class of +securities for which unlisted options quotation is sought

40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities?

If the additional[+] securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

• (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class

• 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

• See chapter 19 for defined terms.

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Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 31 December 2015 (Company secretary) Print name: Louise Bolger == == == == ==

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Part 1	Part 1
Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the +issue date or date of agreement to issue	183,919,777
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period Note: • Include only ordinary securities here – other classes of equity securities cannot be added • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	113,636 fully paid ordinary securities issued on 2 December 2015 under an exception to Listing Rule 7.2. 100,000 fully paid ordinary securities issued on 17 November 2015 as approved by shareholders at the AGM on 12 November 2015. 250,000 fully paid ordinary securities issued on 12 November 2015 as approved by shareholders at the AGM on 12 November 2015. 5,820,016 fully paid ordinary securities issued on 30 June 2015 as approved by shareholders at the AGM on 12 November 2015. 180,328 fully paid ordinary securities issued on 3 February 2015 under an exception to Listing Rule 7.2. 245,614 fully paid ordinary securities issued on 2 January 2015 under an exception to Listing Rule 7.2. Nil partly paid ordinary securities that became fully paid in the 12 month period
Subtractthe number of fully paid+ordinary securities cancelled during that 12 month period	Nil
“A”	190,629,371

• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

“B”

Multiply “A” by 0.15

0.15 [Note: this value cannot be changed] 28,594,406

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period not counting those issued:

• Under an exception in rule 7.2

• Under rule 7.1A

• With security holder approval under rule 7.1 or rule 7.4

Note:

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• It may be useful to set out issues of securities on different dates as separate line items

“C”

Nil

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

“A” x 0.15 28,594,406 Note: number must be same as shown in Step 2 Subtract “C” Nil Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” 28,594,406 [Note: this is the remaining placement capacity under rule 7.1]

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 190,629,371 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 19,062,937

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued Nil or agreed to be issued in that 12 month period under rule 7.1A

Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” Nil

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	19,062,937
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	19,062,937 Note: this is the remaining placement capacity under rule 7.1A