Filed pursuant to Rule 424(b)(7)
A filing Fee of
$4,214.93, based on the average of
the high and low sales prices of the
Common Stock on September 29, 2008, calculated in
accordance with Rules
457(c) and 457(r), has been
transmitted to the SEC in connection with the
Common Stock being offered from the registration
statement (File No.
333-138521) by means of this
Prospectus Supplement
PROSPECTUS SUPPLEMENT No. 1
(To Prospectus dated
November 8, 2006)
5,000,000 Shares
Common Stock
The
selling shareholder identified in this prospectus supplement may offer from time
to time up to 5,000,000 shares of Net 1 UEPS Technologies, Inc. common stock. We
will not receive any proceeds from any transfer of these shares by the selling
shareholder.
Pursuant
to a securities lending agreement with JSE Limited, which operates the JSE
Securities Exchange in Johannesburg, South Africa, and in connection with our
listing of our shares on that exchange, the selling shareholder has agreed to
make available on loan to JSE a portion of its shares of common stock as may be
required from time to time to facilitate the settlement process of trades by
third parties in our shares on the JSE Securities Exchange. See Plan of
Distribution. Our common stock is currently listed on the Nasdaq Global Select
Market under the symbol UEPS. On October 1, 2008 the last reported sale price
of our shares was $22.52 per share.
Investing
in our common stock involves risks. See Risk Factors on page S-2 of this
prospectus supplement and on page 4 of the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful and complete. Any representation to the contrary is a criminal offense.
____________________
Prospectus Supplement dated October
2, 2008
.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
You
should rely only on the information contained in this prospectus supplement, the
accompanying prospectus, the documents incorporated or deemed to be incorporated
by reference in this prospectus supplement and the accompanying prospectus, and
any free writing prospectus that we may prepare in connection with the
disposition of these securities. Neither we nor the selling shareholder has
authorized anyone to provide you with different or additional information. If
anyone provides you with different information, you should not rely on it.
Neither we nor the selling shareholder are making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
ABOUT THIS PROSPECTUS SUPPLEMENT
This
document is in two parts. The first part is this prospectus supplement, which
describes the terms of this offering of shares of our common stock by the
selling shareholder named in this prospectus supplement. The second part is the
accompanying prospectus, dated November 8, 2006, that is also a part of this
document. This prospectus supplement and the accompanying prospectus are part of
a registration statement that we filed with the Securities and Exchange
Commission, or SEC, using the SECs shelf registration rules. In this prospectus
supplement, we provide you with specific information about the
S-1
terms of this offering of the shares of common stock.
Generally, when we refer to the prospectus, we are referring to this prospectus
supplement and the accompanying prospectus combined. Both this prospectus
supplement and the accompanying prospectus include important information about
us, the selling shareholder, our common stock and other information you should
know before investing in the shares of common stock. Any statement in the
accompanying prospectus will be deemed to have been modified or superseded to
the extent that a statement contained in this prospectus supplement modifies or
supersedes that statement, and any statement so modified or superseded will not
be deemed, except as so modified or superseded, to constitute a part of the
accompanying prospectus. Before you invest in shares of our common stock, you
should carefully read this prospectus supplement, along with the accompanying
prospectus, in addition to the information contained in the documents
incorporated and deemed to be incorporated by reference in this prospectus
supplement as described under Incorporation by Reference and in the
accompanying prospectus as described under Where You Can Find More
Information. Throughout this prospectus, the terms Net1, Company, we,
us and our refer to Net 1 UEPS Technologies, Inc. and its consolidated
subsidiaries
.
RISK FACTORS
Investing
in our common stock involves a high degree of risk. You should carefully
consider the risk factors set forth in the accompanying prospectus under the
caption Risk Factors, as well as the risk factors set forth under the caption
Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June
30, 2008 and in our Quarterly Reports on Form 10-Q, which are incorporated by
reference in this prospectus supplement and under the caption Risk Factors or
any similar caption in any of our other filings with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act incorporated by reference in this
prospectus supplement or the accompanying prospectus, before making an
investment decision. For more information, see Incorporation by Reference
herein and Where You Can Find More Information in the accompanying prospectus.
USE OF PROCEEDS
The
selling shareholder named below will receive all of the net proceeds from any
transfer of shares of our common stock offered by this prospectus. We will not
receive any proceeds from the transfer of shares of common stock offered by the
selling shareholder.
SELLING SHAREHOLDER
The
following table sets forth information with respect to the selling shareholder
and the common stock beneficially owned by the selling shareholder that may be
offered under this prospectus supplement and the accompanying prospectus. When
we refer to the selling shareholder in this prospectus, we mean the person
listed in the table below, as well as the permitted pledgees, donees, assignees,
transferees, successors and others who later hold any of the selling
shareholders interests. The information is based on information that has been
provided to us by or on behalf of the selling shareholder. One of our directors,
Antony Ball, is affiliated with the selling shareholder. Because the selling
shareholder may from time to time use this prospectus to offer all or some
portion of the common stock offered hereby, we cannot provide an estimate as to
the amount or percentage of any such type of security that will be held by the
selling shareholder upon termination of any particular offering or sale under
this prospectus. We also cannot advise you as to whether the selling shareholder
will in fact sell any or all of the shares of common stock listed next to its
name below. In addition, the selling shareholder may have sold, transferred or
otherwise disposed of, or may sell, transfer or otherwise dispose of, at any
time and from time to time, the shares of common stock in transactions exempt
from the
S-2
registration requirements of the Securities Act, after the date
on which it provided the information set forth on the table below. Information
concerning the selling shareholder may change from time to time, and any changed
information will be set forth if and when required in prospectus supplements or
other appropriate forms permitted to be used by the SEC.
For
the purposes of the following table, the number of shares of our common stock
beneficially owned has been determined in accordance with Rule 13d-3 under the
Exchange Act, and such information is not necessarily indicative of beneficial
ownership for any other purpose. Under Rule 13d-3, beneficial ownership includes
any shares as to which a selling shareholder has sole or shared voting power or
investment power and also any shares which that selling shareholder has the
right to acquire within 60 days of the date of this prospectus through the
exercise of any stock option, restricted stock unit, warrant or other rights. As
of July 31, 2008, 53,142,911 shares of our common stock and 4,856,801 shares of
our special convertible preferred stock, which are convertible into common stock
on a one-for-one basis, were outstanding. On the date of this prospectus
supplement and in connection with the listing of our common stock on the JSE
Securities Exchange, all of our special convertible preferred stock is being
converted into common stock and the percentages below reflect this conversion.
|
Shares Beneficially
|
|
Number of
|
|
Shares Beneficially
|
|
Owned Before the
|
|
Shares
|
|
Owned After the
|
|
Offering
|
|
Being
|
|
Offering
|
Selling
|
|
|
|
|
|
|
|
|
|
Shareholder
|
Number
|
|
Percent
|
|
Offered
|
|
Number
|
|
Percent
|
South African Private Equity Fund III L.P.
|
8,718,504
|
|
15.0%
1
|
|
5,000,000
|
|
3,718,504
|
|
6.4%
1
|
FORWARD-LOOKING STATEMENTS
Forward-looking
statements in this prospectus and the documents incorporated by reference herein
are based on the beliefs and assumptions of our management and on information
currently available. Forward-looking statements include information about
possible or assumed future results of operations in Managements Discussion and
Analysis of Financial Condition and Results of Operations included in our most
recent Annual Report on Form 10-K and filed separately with the Securities and
Exchange Commission, and other statements preceded by, followed by or that
include the words believes, expects, anticipates, intends, plans,
estimates or similar expressions.
Forward-looking
statements are subject to a number of risks and uncertainties which could cause
actual results to differ materially from those expressed in these
forward-looking statements, including factors described from time to time in our
various public filings incorporated by reference herein. The forward-looking
statements in this prospectus and the documents incorporated by reference speak
only as of the date of the document in which the forward-looking statement is
made, and we undertake no obligation to update or revise any forward-looking
statement, whether as a result of new information, future developments or
otherwise.
_____________________________________________
1
This gives effect to the conversion of all of our special convertible
preferred stock into common stock.
S-3
PLAN OF DISTRIBUTION
We
will not receive any proceeds of the transfer of the common stock offered by
this prospectus supplement. We will bear all fees and expenses incident to the
registration of the shares of our common stock.
Pursuant
to a securities lending agreement with JSE Limited, or JSE, which operates the JSE
Securities Exchange in Johannesburg, South Africa, and in connection with our
listing of our shares on that exchange, the selling shareholder has agreed to
make available on loan to JSE, for a specified period of time, a portion of its
shares of common stock as may be required from time to time to facilitate the
settlement process of trades by third parties in our shares on the JSE
Securities Exchange. We are registering the transfer of these shares to JSE.
Under
the terms of the securities lending agreement with the JSE Limited:
•
the selling shareholder shall deliver up to 5,000,000 shares of common stock
to JSE on an agreed upon date;
•
JSE shall pay to the selling shareholder a lending rate equivalent to the most
favorable lending rate that the JSE may obtain from other lenders of securities;
and
•
JSE shall upon notice from the selling shareholder transfer to the selling shareholder
the equivalent type and number of the securities by the notice date.
The
securities lending agreement provides that it is the intention of the parties to
keep the selling shareholder in the same position, except with regard to the
direct exercise of voting rights, as if the securities were never lent and
delivered to JSE.
There
can be no assurance that the selling shareholder will sell any or all of the
shares of our common stock registered pursuant to the registration statement, of
which this prospectus forms a part.
The
selling shareholder may be deemed to be a underwriter within the meaning of
Section 2(11) of the Securities Act. As a result, any profits on the sale of
such securities by the selling shareholder might be deemed to be underwriting
discounts and commissions under the Securities Act. If the selling shareholder
is deemed to be an underwriter, the selling shareholder may be subject to
certain statutory liabilities, including, but not limited to, those under
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
Act. If the selling shareholder is deemed to be an underwriter, the selling
shareholder will also be subject to the prospectus delivery requirements of the
Securities Act.
Regulation
M of the Exchange may limit the timing of purchases and sales of any of the
common stock by the selling shareholder and any other such person. In addition,
Regulation M may restrict the ability of any person engaged in the distribution
of the common stock to engage in market-making activities with respect to the
common stock being distributed for a period of time prior to the commencement of
such distribution. This may affect the marketability of the common stock and the
ability of any person or entity to engage in market-making activities with
respect to the common stock.
We
may suspend the use of this prospectus for any period and at any time, including,
without limitation, in the event of pending corporate developments, public filings
with the SEC, and similar events.
S-4
PROSPECTUS
Common Stock, Preferred Stock, Debt Securities,
Warrants, Purchase Contracts and Units
We
may offer from time to time offer and sell any combination of common stock,
preferred stock, debt securities, warrants, purchase contracts or units
described in this prospectus in one or more offerings. This prospectus provides
a general description of the securities we may offer and sell. Each time we
offer and sell securities we will provide specific terms of the securities
offered in a supplement to this prospectus. The prospectus supplement may also
add, update or change information contained in this prospectus. In addition,
certain selling securityholders to be identified in a prospectus supplement may
offer and sell these securities from time to time, in amounts, at prices and on
terms that will be determined at the time the securities are offered. We urge
you to read this prospectus and the applicable prospectus supplement carefully
before you invest in any securities.
Our
common stock is currently listed on the Nasdaq Global Select Market under the
symbol UEPS. On November 7, 2006, the last reported sale price of our common
stock was $23.74 per share.
You
should rely only on the information contained or incorporated by reference in
this prospectus. We have not authorized any other person to provide you with
different information.
Investing
in these securities involves risks set forth in the Risk Factors section
beginning on page 32 of our Annual Report on Form 10-K that is incorporated by
reference into this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful and complete. Any representation to the contrary is a criminal offense.
This
prospectus may not be used to consummate a sale of securities unless accompanied
by a prospectus supplement.
This prospectus is dated November 8, 2006.
We have not authorized any dealer, salesman or other person
to give any information or to make any representation other than those contained
or incorporated by reference in this prospectus and the accompanying supplement to this
prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement. This prospectus and the accompanying supplement to this
prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the registered securities to which they relate,
nor do this prospectus and the accompanying supplement to this prospectus
constitute an offer to sell or the solicitation of an offer to buy securities in
any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Net1, Company, we, us and our refer
to Net 1 UEPS Technologies, Inc. and its consolidated subsidiaries
TABLE OF CONTENTS
2
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission, or the SEC, utilizing a shelf registration process.
Under this shelf process, we may offer and sell any combination of the
securities described in this prospectus in one or more offerings. This
prospectus provides you with a general description of the securities we may
offer and sell. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading Where You Can Find More Information.
We
have filed or incorporated by reference exhibits to the registration statement
of which this prospectus forms a part. You should read the exhibits carefully
for provisions that may be important to you.
WHERE YOU CAN FIND MORE INFORMATION
We
are required to file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any documents filed by us
at the SECs public reference room at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Our filings with the SEC are also available to the public
through the SECs Internet site at
http://www.sec.gov
.
We
have filed a registration statement on Form S-3 with the SEC relating to the
securities covered by this prospectus. This prospectus is a part of the
registration statement and does not contain all of the information in the
registration statement. Whenever a reference is made in this prospectus to a
contract or other document of Net 1, please be aware that the reference is only
a summary and that you should refer to the exhibits that are a part of the
registration statement for a copy of the contract or other document. You may
review a copy of the registration statement at the SECs public reference room
in Washington, D.C., as well as through the SECs Internet site.
The
SECs rules allow us to incorporate by reference information into this
prospectus. This means that we can disclose important information to you by
referring you to another document. Any information referred to in this way is
considered part of this prospectus from the date we file that document. Any
reports filed by us with the SEC after the date of this prospectus and before
the date that the offering of the securities by means of this prospectus is
terminated shall be incorporated by reference into this prospectus and will
automatically update and, where applicable, supersede any information contained
in this prospectus or incorporated by reference in this prospectus.
We
incorporate by reference into this prospectus the following documents or
information filed with the SEC (other than, in each case, documents or
information deemed to have been furnished and not filed in accordance with SEC
rules):
|
(1)
|
Annual Report on Form 10-K for the fiscal year ended June
30, 2006;
|
|
|
|
|
(2)
|
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2006;
|
3
|
(3)
|
Definitive Proxy on Schedule 14A filed with the SEC on
October 27, 2006;
|
|
|
|
|
(4)
|
Current Reports on Form 8-K filed with the SEC on July
10, 2006, August 29, 2006, August 31, 2006, October 10, 2006 and Current
Report on Form 8-K/A filed with the SEC on September 13, 2006;
|
|
|
|
|
(5)
|
Description of our common stock contained in Item 7 of
amendment number 2 to our Form 10-SB filed on October 26, 2000 with the
SEC, including any amendment or report filed for the purpose of updating
such description;
|
|
|
|
|
(6)
|
All documents filed by us with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the
date of this prospectus and before we stop offering the securities under
this prospectus (other than those portions of such documents described in
paragraphs (i), (k), and (l) of Item 402 of Regulation S-K promulgated by
the SEC).
|
We
will provide without charge to each person, including any beneficial owner, to
whom this prospectus is delivered, upon his or her written or oral request, a
copy of any or all documents referred to above which have been or may be
incorporated by reference into this prospectus but not delivered with this
prospectus excluding exhibits to those documents unless they are specifically
incorporated by reference into those documents. You can request those documents
from Mr. Herman Kotze at President Place, 4th Floor, Cnr. Jan Smuts Avenue and
Bolton Road, Rosebank, Johannesburg, South Africa, telephone (2711) 343-2000.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking
statements in this prospectus and the documents incorporated by reference herein
are based on the beliefs and assumptions of our management and on information
currently available. Forward-looking statements include information about
possible or assumed future results of operations in Managements Discussion and
Analysis of Financial Condition and Results of Operations included in our most
recent Annual Report on Form 10-K, and other statements preceded by, followed by
or that include the words believes, expects, anticipates, intends,
plans, estimates or similar expressions.
These
forward looking statements involve known and unknown risks, uncertainties and
other factors that may cause the companys actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed, implied or inferred
by these forward-looking statements, such as product demand, market and customer
acceptance, the effect of economic conditions, competition, pricing, development
difficulties, foreign currency risks, costs of capital, the ability to
consummate and integrate acquisitions, and other risks detailed in the Companys
SEC filings. The Company undertakes no obligation to revise any of these
statements to reflect future circumstances or the occurrence of unanticipated
events.
RISK FACTORS
Our
business is influenced by many factors that are difficult to predict, and that
involve uncertainties that may materially affect actual operating results, cash
flows and financial
4
condition. These risk factors include those described in the
documents that are incorporated by reference in this prospectus, and could
include additional uncertainties not presently known to us or that we currently
do not consider to be material. Before making an investment decision, you should
carefully consider these risks as well as any other information we include or
incorporate by reference in this prospectus or include in any applicable
prospectus supplement.
NET 1 UEPS TECHNOLOGIES, INC.
We
provide universal electronic payment system, or UEPS, as an alternative payment
system for the unbanked and under-banked populations of developing economies. We
believe that we are the first company worldwide to implement a system that can
enable the estimated four billion people who generally have limited or no access
to a bank account to enter affordably into electronic transactions with each
other, government agencies, employers, merchants and other financial service
providers. To accomplish this, we have developed and deployed the UEPS. This
system uses secure smart cards that operate in real-time but offline, unlike
traditional payment systems offered by major banking institutions that require
immediate access through a communications network to a centralized computer.
This offline capability means that users of our system can enter into
transactions at any time with other card holders in even the most remote areas
so long as a portable offline smart card reader is available. In addition to
payments and purchases, our system can be used for banking, health care
management, international money transfers, voting and identification. Net1s
recently acquired subsidiary, Prism Holdings Limited (Prism), is a company
focused on the development and provision of secure transaction technology,
solutions and services. Prisms core competencies around secure online
transaction processing, cryptography and integrated circuit card (chip/smart
card) technologies are principally applied to electronic commerce transactions
in the telecommunications, banking, retail, petroleum and utilities market
sectors. These technologies form the cornerstones of the trusted transactions
environment and provide us with the building blocks for developing secure
end-to-end payment solutions. More information about us is available on our web
site at
www.net1ueps.com
. Information on our web site is not incorporated
by reference into this prospectus.
Our
principal executive offices are located at President Place, 4th Floor, Cnr. Jan
Smuts Avenue and Bolton Road, Rosebank, Johannesburg, South Africa. Our phone
number is (2711) 343-2000.
USE OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement, we anticipate that the net
proceeds from our sale of any securities will be used for general corporate
purposes, including working capital, acquisitions, retirement of debt and other
business opportunities. In the case of a sale by a selling shareholder, we will
not receive any of the proceeds from such sale.
RATIO OF EARNINGS TO FIXED CHARGES
The
following table sets forth our ratio of earnings to fixed charges for the
periods indicated.
5
|
Three Months
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
Fiscal
Year Ended
|
|
September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
Ratio of earnings to fixed charges
|
10.82
|
|
11.56
|
|
6.17
|
|
4.25
|
|
4.73
|
|
7.82
|
DESCRIPTION OF SECURITIES
This
prospectus contains a summary of the securities that Net1 or certain selling
securityholders to be identified in a prospectus supplement may sell. These
summaries are not meant to be a complete description of each security. However,
this prospectus and the accompanying prospectus supplement contain the material
terms of the securities being offered.
DESCRIPTION OF CAPITAL STOCK
The
following description is based upon our amended articles of incorporation, our
bylaws and applicable provisions of law. We have summarized certain portions of
the amended articles of incorporation and by-laws below. The summary is not
complete. The amended articles of incorporation and by-laws are incorporated by
reference into this prospectus in their entirety. You should read the articles
of incorporation and by-laws for the provisions that are important to you.
Net1s
authorized capital stock consists of 83,333,333 shares of common stock and
50,000,000 shares of preferred stock. As of October 19, 2006, 50,429,385 shares
of our common stock, par value $0.001 per share, and 6,499,259 shares of our
special convertible preferred stock, par value $0.001 per share, which are
convertible into common stock on a one-for-one basis, were outstanding.
Common Stock
The
issued and outstanding shares of common stock are, and the shares of common
stock that we may issue in the future will be, validly issued, fully paid and
nonassessable. Holders of our common stock are entitled to share equally, share
for share, if dividends are declared on our common stock, whether payable in
cash, property or our securities. The shares of common stock are not convertible
and the holders thereof have no preemptive or subscription rights to purchase
any of our securities. Upon liquidation, dissolution or winding up of our
company, the holders of common stock are entitled to share equally, share for
share, in our assets which are legally available for distribution, after payment
of all debts and other liabilities and subject to the prior rights of any
holders of any series of preferred stock then outstanding. Each outstanding
share of common stock is entitled to one vote on all matters submitted to a vote
of stockholders. There is no cumulative voting. Except as otherwise required by
law or the amended articles of incorporation, the holders of common stock vote
together as a single class on all matters submitted to a vote of stockholders.
Our
common stock is currently listed on the Nasdaq Global Select Market under the
symbol UEPS.
6
Preferred Stock
We
may issue shares of preferred stock in series and may, at the time of issuance,
determine the rights, preferences and limitations of each series. Satisfaction
of any dividend preferences of outstanding shares of preferred stock would
reduce the amount of funds available for the payment of dividends on shares of
common stock. Holders of shares of preferred stock may be entitled to receive a
preference payment in the event of any liquidation, dissolution or winding-up of
our company before any payment is made to the holders of shares of common stock.
In some circumstances, the issuance of shares of preferred stock may render more
difficult or tend to discourage a merger, tender offer or proxy contest, the
assumption of control by a holder of a large block of our securities or the
removal of incumbent management. Upon the affirmative vote of a majority of the
total number of directors then in office, our board of directors, without
shareholder approval, may issue shares of preferred stock with voting and
conversion rights which could adversely affect the holders of shares of common
stock.
Special Convertible Preferred Stock
Our
special convertible preferred stock ranks:
-
on parity, without preference and priority, to our common stock with
respect to dividend rights (except as described below) or rights upon
liquidation, dissolution or winding up; and
-
junior in preference and priority to each other class or series of
preferred stock or other equity security of ours under terms that may be
determined by the board of directors to expressly provide that such other
security will rank senior in preference or priority to the special convertible
preferred stock with respect to dividend rights or rights on liquidation,
dissolution or winding up.
Voting Rights
. Holders of our special convertible
preferred stock have the right to receive notice of, attend, speak and vote at
general meetings, and are entitled to vote on all matters on which holders of
common stock are entitled to vote. Holders of special convertible preferred
stock vote together with the holders of common stock as a single class. Each
holder of special convertible preferred stock present in person, or the person
representing such holder, is entitled to a number of votes equal to the number
of shares of common stock that would be issued upon conversion of the special
convertible preferred stock held by such holder on the record date.
We
may not take any of the following actions without the prior vote or written
consent of our holders representing at least a majority of the then outstanding
shares of special convertible preferred stock, voting together as a separate
class:
-
any increase (including by way of merger, consolidation or otherwise) in
the total number of authorized or issued shares of special convertible
preferred stock; or
-
any amendment, alteration or change to the powers, designations,
preferences, rights, qualifications, limitations or restrictions of the
special convertible preferred stock in the articles of incorporation in any
manner that adversely affects the holders of such stock.
7
Dividends
.
Provided that shares of special convertible preferred stock are outstanding, our
board will determine immediately prior to the declaration of any dividend or
distribution (1) the portion, if any, of our assets available for such dividend
or distribution that is attributable to funds or assets from Net 1 Applied
Technologies South Africa Limited, or New Aplitec, regardless of the manner
received, or the South African Amount, and (2) the portion of such funds or
assets that is not from New Aplitec, or the Non-South African Amount. The South
African Amount will not include amounts received from New Aplitec due to its
liquidation, distribution or dividend after an insolvency or winding up.
Provided
that shares of special convertible preferred stock are outstanding, (1) any
dividends or distributions of Non-South African Amounts must be paid pro rata to
all holders of common stock and special convertible preferred stock, and (2) any
dividends or distributions of South African Amounts can be paid only to holders
of common stock. Our board has complete discretion to declare a dividend or
distribution with respect to South African Amounts or Non-South African Amounts.
Conversion
.
Special convertible preferred stock is convertible into shares of common stock
on a one-for-one basis upon the occurrence of a trigger event, which is defined
as any one of the following events: (1) notification by the reinvesting
shareholder of the intention to convert some or all of such holders special
convertible preferred stock; (2) the abolition or relaxation of Excon
regulations such that South African residents would be permitted to directly
hold shares of non-South African companies; or (3) our liquidation, insolvency
or other winding up. With each converted share of special convertible preferred
stock that is to be converted, we will receive:
-
7.368421056 New Aplitec B class preference shares; and
-
such holders interest in the New Aplitec B loan accounts, which is equal
to (1) the aggregate principal amount of New Aplitec B loans, plus any accrued
interest, minus any repayment or previous transfer of New Aplitec B loans,
divided by (2) the number of the shares of special convertible preferred stock
outstanding at such time.
No
fractional shares of common stock shall be issued upon conversion of the special
convertible preferred stock, unless our board of directors shall otherwise
determine to issue fractional shares. In lieu of fractional shares, we will pay
cash equal to such fractional amount multiplied by the fair market value per
share of common stock on the date of conversion. If more than one share of
special convertible preferred stock is being converted at one time by the same
holder, then the number of full shares issuable upon conversion will be
calculated on the basis of the aggregate number of shares converted at that
time.
We
will reserve and keep available out of our authorized but unissued shares of
common stock the full number of shares of common stock deliverable upon the
conversion of all outstanding special convertible preferred stock.
Upon
conversion, all rights with respect to shares for special convertible preferred
stock will cease. Converted shares will be cancelled and have the status of
authorized but unissued preferred stock, without designation as to series until
such shares are once more designated as part of a particular series by the board
of directors.
8
Transfer
Restrictions
. Special convertible preferred stock may not be sold, assigned,
transferred, pledged, or encumbered, except to us upon conversion into shares of
common stock. The shares of special convertible preferred stock may not be held
by any person other than the Aplitec Holdings Participation Trust for the
benefit of the New Aplitec Participation Trust and indirectly for the benefit of
reinvesting shareholders, or directly by the South African Trust for the benefit
of reinvesting shareholders in connection with a conversion into common stock.
Liquidation,
Dissolution and Winding Up
. In the event of the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding-up, all outstanding
shares of special convertible preferred stock will automatically convert and
holders will be entitled to receive pari passu with holders of common stock, any
assets distributed for the benefit of its shareholders.
DESCRIPTION OF DEBT SECURITIES
The
debt securities will be our direct unsecured general obligations. The debt
securities will be either senior debt securities or subordinated debt
securities. The debt securities will be issued under one or more separate
indentures between us and The Bank of New York, as trustee. Senior debt
securities will be issued under a senior indenture to be executed between us and
The Bank of New York, as trustee, which we refer to as the senior indenture.
Subordinated debt securities will be issued under a subordinated indenture to be
executed between us and The Bank of New York, as trustee, which we refer to as
the subordinated indenture. Together the senior indenture and the subordinated
indenture are called the indentures.
We
have summarized select portions of the material provisions of the indentures
below. The summary is not complete. The forms of the indentures have been filed
as exhibits to the registration statement of which this prospectus forms a part,
and you should read the indentures for provisions that may be important to you.
We will indicate in the applicable prospectus supplement any material variation
from the expected terms of the indentures described below.
General
The
debt securities will be our direct unsecured general obligations. The senior
debt securities will rank equally with all of our other senior and
unsubordinated debt. The subordinated debt securities will have a junior
position to all of our senior debt.
Because
we are a holding company that conducts all of its operations through
subsidiaries, holders of the debt securities will have a junior position to
claims of creditors of our subsidiaries, including trade creditors, debtholders,
secured creditors, taxing authorities, guarantee holders and any preferred
stockholders, except to the extent that the debt securities are guaranteed by
one or more subsidiary guarantees.
The
provisions of each indenture allow us to reopen a previous issue of a series
of debt securities and issue additional debt securities of that series.
A
prospectus supplement relating to any series of debt securities being offered
will include specific terms relating to the offering. The terms will be
established in an officers certificate or a supplemental indenture. The
officers certificate or supplemental indenture will be signed at the time of
issuance and will contain important information. The officers certificate
9
or supplemental indenture will be filed as an exhibit to a
Current Report on Form 8-K of Net1, which will be publicly available. The
officers certificate or supplemental indenture will include some or all of the
following terms for a particular series of debt securities:
-
the title of the securities;
-
any limit on the amount that may be issued;
-
whether or not the debt securities will be issued in global form and who
the depositary will be;
-
the maturity date(s);
-
the interest rate or the method of computing the interest rate;
-
the date or dates from which interest will accrue, or how such date or
dates will be determined, and the interest payment date or dates and any
related record dates;
-
the place(s) where payments will be made;
-
Net1s right, if any, to defer payment of interest and the maximum length
of any deferral period;
-
the terms and conditions on which the debt securities may be redeemed at
the option of Net1;
-
the date(s), if any, on which, and the price(s) at which Net1 is obligated
to redeem, or at the holders option to purchase, such series of debt
securities and other related terms and provisions;
-
any provisions granting special rights to holders when a specified event
occurs;
-
any changes to or additional events of default or covenants;
-
any special tax implications of the debt securities;
-
the denominations in which the debt securities will be issued, if other
than denominations of $1,000 and whole multiples of $1,000;
-
the subordination terms of any subordinated debt securities; and
-
any other terms that are not inconsistent with the indenture.
Fixed Rate Debt Securities
Each
fixed rate debt security will mature on the date specified in the applicable
prospectus supplement.
Each fixed rate debt security will bear interest from the date
of issuance at the annual rate stated on its face until the principal is paid or
made available for payment. Interest on fixed rate debt
10
securities will be computed on the basis of a 360-day year of
twelve 30-day months. Interest on fixed rate debt securities will accrue from
and including the most recent interest payment date in respect of which interest
has been paid or duly provided for, or, if no interest has been paid or duly
provided for, from and including the issue date or any other date specified in a
prospectus supplement on which interest begins to accrue. Interest will accrue
to but excluding the next interest payment date, or, if earlier, the date of
maturity or earlier redemption or repayment, as the case may be.
Payments
of interest on fixed rate debt securities will be made on the interest payment
dates specified in the applicable prospectus supplement. However, if the first
interest payment date is less than 15 days after the date of issuance, interest
will not be paid on the first interest payment date, but will be paid on the
second interest payment date.
Unless
otherwise specified in the applicable prospectus supplement, if any scheduled
interest payment date, maturity date or date of redemption or repayment is not a
business day, then we may pay the applicable interest, principal and premium, if
any, on the next succeeding business day, and no additional interest will accrue
during the period from and after the scheduled interest payment date, maturity
date or date of redemption or repayment.
A
fixed rate debt security may pay a level amount in respect of both interest and
principal amortized over the life of the debt security. Payments of principal
and interest on amortizing debt securities will be made on the interest payment
dates specified in the applicable prospectus supplement, and at maturity or upon
any earlier redemption or repayment. Payments on amortizing debt securities will
be applied first to interest due and payable and then to the reduction of the
unpaid principal amount. We will provide to the original purchaser, and will
furnish to subsequent holders upon request to us, a table setting forth
repayment information for each amortizing debt security.
Floating Rate Debt Securities
Each
floating rate debt security will mature on the date specified in the applicable
prospectus supplement. Unless otherwise specified in the applicable prospectus
supplement, each floating rate debt security will bear interest at LIBOR plus
a margin to be specified in the applicable prospectus supplement. A floating
rate debt security may also have either or both of the following limitations on
the interest rate:
-
a maximum limitation, or ceiling, on the rate of interest which may accrue
during any interest period, which we refer to as the maximum interest rate;
and/or
-
a minimum limitation, or floor, on the rate of interest that may accrue
during any interest period, which we refer to as the minimum interest rate.
Any
applicable maximum interest rate or minimum interest rate will be set forth in
the applicable prospectus supplement.
Interest
on floating rate debt securities will accrue from and including the most recent
interest payment date to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for, from and including the issue
date or any other date specified in a
11
prospectus supplement on which interest begins to accrue.
Interest will accrue to but excluding the next interest payment date, or, if
earlier, the date on which the principal has been paid or duly made available
for payment, except as described below.
The
interest rate in effect from the date of issue to the first interest reset date
for a floating rate debt security will be the initial interest rate specified in
the applicable prospectus supplement. We refer to this rate as the initial
interest rate. The interest rate on each floating rate debt security may be
reset daily, weekly, monthly, quarterly, semiannually or annually. This period
is the interest reset period and the first day of each interest reset period
is the interest reset date. The interest determination date for any interest
reset date is the day the calculation agent will refer to when determining the
new interest rate at which a floating rate will reset. LIBOR for each interest
reset date, other than for the initial interest rate, will be determined by the
calculation agent as follows:
|
(i)
|
LIBOR will be the offered rate for deposits in U.S.
dollars for the three month period which appears on Telerate Page 3750
at approximately 11:00 a.m., London time, two London banking days prior
to the applicable interest reset date.
|
|
|
|
|
(ii)
|
If this rate does not appear on the Telerate Page 3750,
the calculation agent will determine the rate on the basis of the rates at
which deposits in U.S. dollars are offered by four major banks in the
London interbank market (selected by the calculation agent after
consulting with us) at approximately 11:00 a.m., London time, two London
banking days prior to the applicable interest reset date to prime banks in
the London interbank market for a period of three months commencing on
that interest reset date and in principal amount equal to an amount not
less than $1,000,000 that is representative for a single transaction in
such market at such time. In such case, the calculation agent will request
the principal London office of each of the aforesaid major banks to
provide a quotation of such rate. If at least two such quotations are
provided, LIBOR for that interest reset date will be the average of the
quotations. If fewer than two quotations are provided as requested, LIBOR
for that interest reset date will be the average of the rates quoted by
three major banks in New York, New York (selected by the calculation agent
after consulting with us) at approximately 11:00 a.m., New York time, two
London banking days prior to the applicable interest reset date for loans
in U.S. dollars to leading banks for a period of three months commencing
on that interest reset date and in a principal amount equal to an amount
not less than $1,000,000 that is representative for a single transaction
in such market at such time; provided that if fewer than three quotations
are provided as requested, for the period until the next interest reset
date, LIBOR will be the same as the rate determined on the immediately
preceding interest reset date.
|
The
interest reset dates will be specified in the applicable prospectus supplement.
If an interest reset date for any floating rate debt security falls on a day
that is not a business day, it will be postponed to the following business day,
except that, if that business day is in the next calendar month, the interest
reset date will be the immediately preceding business day.
12
A
London banking day is any day in which dealings in U.S. dollar deposits are
transacted in the London interbank market. Telerate Page 3750 means the
display page so designated on the Telerate Service for the purpose of displaying
London interbank offered rates of major banks (or any successor page).
The
applicable prospectus supplement will specify a calculation agent for any issue
of floating rate debt securities. The calculation agent will, upon the request
of the holder of any floating rate debt security, provide the interest rate then
in effect. All calculations made by the calculation agent in the absence of
willful misconduct, bad faith or manifest error shall be conclusive for all
purposes and binding on us and the holders of the floating rate debt securities.
We may appoint a successor calculation agent at any time at our discretion and
without notice.
All
percentages resulting from any calculation of the interest rate with respect to
the floating rate debt securities will be rounded, if necessary, to the nearest
one-hundred thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) would be rounded
to 9.87655% (or .0987655) and 9.876544% (or .09876544) would be rounded to
9.87654% (or .0987654)), and all dollar amounts in or resulting from any such
calculation will be rounded to the nearest cent (with one-half cent being
rounded upward).
Interest
on the floating rate debt securities will be computed and paid on the basis of a
360-day year and the actual number of days in each interest payment period. The
interest rate on the floating rate debt securities will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States law of general application.
We
will pay interest on floating rate debt securities on the interest payment dates
specified in the applicable prospectus supplement. However, if the first
interest payment date is less than 15 days after the date of issuance, interest
will not be paid on the first interest payment date, but will be paid on the
second interest payment date. If any scheduled interest payment date, other than
the maturity date or any earlier redemption or repayment date, for any floating
rate debt security falls on a day that is not a business day, it will be
postponed to the following business day, except that if that business day would
fall in the next calendar month, the interest payment date will be the
immediately preceding business day. If the scheduled maturity date or any
earlier redemption or repayment date of a floating rate debt security falls on a
day that is not a business day, the payment of principal, premium, if any, and
interest, if any, will be made on the next succeeding business day, but interest
on that payment will not accrue during the period from and after the maturity,
redemption or repayment date.
Conversion or Exchange Rights
The
prospectus supplement will describe the terms, if any, on which a series of debt
securities may be convertible into or exchangeable for our common stock,
preferred stock, debt securities or other securities, or securities of third
parties. These terms will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at the option of Net1.
These provisions may allow or require adjustment of the number of shares of
common stock or other securities of Net1 to be received by the holders of such
series of debt securities.
13
Optional Redemption
Unless
the prospectus supplement relating to any series of debt securities provides
otherwise with respect to such series, each series of debt securities will be
redeemable in whole at any time or in part from time to time, at our option, at
a redemption price equal to the greater of:
-
100% of the principal amount of the series of debt securities to be
redeemed; or
-
the sum of the present values of the remaining scheduled payments of
principal and interest on the series of debt securities to be redeemed
(exclusive of interest accrued to the date of redemption) discounted to the
date of redemption on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the then current Treasury Rate plus a spread as
specified in the applicable prospectus supplement.
In
each case we will pay accrued and unpaid interest on the principal amount to be
redeemed to the date of redemption.
Comparable
Treasury Issue means the United States Treasury security selected by the
Independent Investment Banker as having a maturity comparable to the remaining
term (Remaining Life) of the series of debt securities to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such series of debt securities.
Comparable
Treasury Price means, with respect to any redemption date, (1) the average of
the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if
the trustee obtains fewer than four such Reference Treasury Dealer Quotations,
the average of all such quotations.
Independent
Investment Banker means the investment banking institution or institutions
specified in the applicable prospectus supplement and their respective
successors, or, if such firms or the successors, if any, to such firm or firms,
as the case may be, are unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by us.
Reference
Treasury Dealer means the investment banking institutions specified as such in
the applicable prospectus supplement; provided, however, that if any of them
ceases to be a primary U.S. Government securities dealers (each a Primary
Treasury Dealer), we will substitute another Primary Treasury Dealer.
Reference
Treasury Dealer Quotations means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the trustee
by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.
Treasury
Rate means, with respect to any redemption date, the rate per year equal to:
14
|
(i)
|
the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently
published statistical release designated H.15(519) or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the
caption Treasury Constant Maturities, for the maturity corresponding to
the Comparable Treasury Issue; provided that, if no maturity is within
three months before or after the remaining life of the series of debt
securities to be redeemed, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be determined
and the Treasury Rate shall be interpolated or extrapolated from those
yields on a straight line basis, rounding to the nearest month;
or
|
|
|
|
|
(ii)
|
if such release (or any successor release) is not
published during the week preceding the calculation date or does not
contain such yields, the rate per year equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
|
The
Treasury Rate will be calculated on the third business day preceding the
redemption date. As used in the immediately preceding sentence and in the
definition of Reference Treasury Dealer Quotations above, the term business
day means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain
closed.
Notice
of any redemption will be mailed at least 30 but not more than 60 days before
the redemption date to each holder of record of the series of debt securities to
be redeemed at its registered address. The notice of redemption will state,
among other things, the amount of the series of debt securities to be redeemed,
the redemption date, the manner in which the redemption price will be calculated
and the place or places that payment will be made upon presentation and
surrender of the series of debt securities to be redeemed. If less than all of a
series of debt securities are to be redeemed at our option, the trustee will
select, in a manner it deems fair and appropriate, the debt securities of that
series, or portions of the debt securities of that series, to be redeemed.
Unless we default in the payment of the redemption price with respect to any
debt securities called for redemption, interest will cease to accrue on such
debt securities at the redemption date.
The
Company will not be required (i) to issue, register the transfer of or exchange
any series of debt securities during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any debt securities of any series so selected for
redemption in whole or in part, except the unredeemed portion of any such series
of debt securities being redeemed in part.
15
Covenants
Under
the indentures, Net1 agrees to pay the interest, principal and any premium on
the debt securities when due, and to maintain a place of payment. In addition,
we must comply with the covenants described below:
Limitation on Liens on Stock of our Significant
Subsidiaries
. The indentures prohibit us and our subsidiaries from directly
or indirectly creating, assuming, incurring or permitting to exist any
Indebtedness secured by any lien on the voting stock or voting equity interest
of our Significant Subsidiaries (as defined in the indentures) unless the debt
securities then outstanding (and, if we so elect, any other Indebtedness of Net1
that is not subordinate to such debt securities and with respect to which we are
obligated to provide such security) are secured equally and ratably with such
Indebtedness for so long as such Indebtedness is so secured. Indebtedness is
defined as the principal of and any premium and interest due on indebtedness of
a person (as defined in the indentures), whether outstanding on the original
date of issuance of a series of debt securities or thereafter created, incurred
or assumed, which is (a) indebtedness for money borrowed and (b) any amendments,
renewals, extensions, modifications and refundings of any such indebtedness. For
the purposes of this definition, indebtedness for money borrowed means (1) any
obligation of, or any obligation guaranteed by, such person for the repayment of
borrowed money, whether or not evidenced by bonds, debentures, notes or other
written instruments, (2) any obligation of, or any obligation guaranteed by,
such person evidenced by bonds, debentures, notes or similar written
instruments, including obligations assumed or incurred in connection with the
acquisition of property, assets or businesses (provided, however, that the
deferred purchase price of any business or property or assets shall not be
considered Indebtedness if the purchase price thereof is payable in full within
90 days from the date on which such indebtedness was created), and (3) any
obligations of such person as lessee under leases required to be capitalized on
the balance sheet of the lessee under generally accepted accounting principles
and leases of property or assets made as part of any sale and lease-back
transaction to which such person is a party. For purposes of this covenant only,
Indebtedness also includes any obligation of, or any obligation guaranteed by,
any person for the payment of amounts due under a swap agreement or similar
instrument or agreement, or under a foreign currency hedge or similar instrument
or agreement. If we are required to secure outstanding debt securities equally
and ratably with other Indebtedness under this covenant, we will be required to
document our compliance with the covenant and thereafter the trustee will be
authorized to enter into a supplemental agreement or indenture and to take such
action as it may deem advisable to enable it to enforce the rights of the
holders of the outstanding debt securities so secured.
Provision of Compliance Certificate
. We are required
under the indentures to deliver to the trustee within 120 days after the end of
each fiscal year an officers certificate certifying as to our compliance with
all conditions and covenants under the relevant indenture, or if we are not in
compliance, identifying and describing the nature and status of such
non-compliance.
Consolidation, Merger or Sale
The
indentures do not restrict the ability of Net1 to merge or consolidate, or sell,
convey, transfer or lease all or substantially all of its assets as long as
certain conditions are met. We may only merge or consolidate with, or convey,
transfer or lease all of our assets to, any person, if doing so will not result
in an event of default. Any such successor, acquiror or lessor of such
16
assets must expressly assume all of the obligations of Net1
under the indentures and the debt securities and will succeed to every right and
power of Net1 under the indentures. Thereafter, except in the case of a lease,
the predecessor or transferor of such assets will be relieved of all obligations
and covenants under the relevant indenture and debt securities.
Events of Default Under the Indentures
The
following are events of default under the indentures with respect to any series
of debt securities issued:
-
we fail to pay interest when due and such failure continues for 90 days,
unless the time for payment has been properly extended or deferred in
accordance with the terms of the particular series;
-
we fail to pay the principal or any premium when due, unless the maturity
has been properly extended in accordance with the terms of the particular
series;
-
we fail to observe or perform any other covenant or agreement contained in
the debt securities or the indentures, other than a covenant or agreement
specifically relating to another series of debt securities, and such failure
continues for 90 days after we receive a notice of default from the trustee or
from the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of all of the affected series;
-
certain events of bankruptcy or insolvency, whether voluntary or not; and
-
any additional events of default that may be established with respect to a
particular series of debt securities under the indentures, as may be specified
in the applicable prospectus supplement.
If,
with regard to any series, an event of default resulting from a failure to pay
principal, any premium or interest occurs and is continuing, the trustee or the
holders of at least 25% in aggregate principal amount of the outstanding debt
securities of that series may declare the principal of all debt securities of
that series immediately due and payable.
If
an event of default other than a failure to pay principal, any premium or
interest occurs and is continuing, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of all affected
series (all such series voting together as a single class) may declare the
principal of all debt securities of such affected series immediately due and
payable.
The
holders of a majority in principal amount of the outstanding debt securities of
all affected series (voting together as a single class) may waive any past
default with respect to such series and its consequences, except a default or
events of default regarding payment of principal, any premium or interest, in
which case the holders of the outstanding debt securities of each affected
series shall vote to waive such default or event of default as a separate class.
Such a waiver will eliminate the default.
17
Unless
otherwise specified in the indentures, if an event of default occurs and is
continuing, the trustee will be under no obligation to exercise any of its
rights or powers under the relevant indenture unless the holders of the debt
securities have offered the trustee indemnity reasonably satisfactory to the
trustee against the costs, expenses and liabilities that it might incur. The
holders of a majority in principal amount of the outstanding debt securities of
all series affected by an event of default, voting together as a single class,
or, in the event of a default in the payment of principal, any premium or
interest, the holders of a majority of the principal amount outstanding of each
affected series voting as a separate class, will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any trust or power conferred on the trustee with
respect to the debt securities of such series, provided that:
-
such direction is not in conflict with any law or the applicable indenture
or unduly prejudicial to the rights of holders of any other series of debt
securities outstanding under the applicable indenture; and
-
unless otherwise provided under the Trust Indenture Act, the trustee need
not take any action that might involve it in personal liability.
A
holder of the debt securities of a particular series will only have the right to
institute a proceeding under the indentures or to appoint a receiver or trustee,
or to seek other remedies, in each case with respect to such series of debt
securities, if:
-
the holder has given written notice to the trustee of a continuing event of
default;
-
in the case of an event of default relating to the payment of principal,
any premium or interest, the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of the particular series have made
written request to the trustee to institute proceedings as trustee;
-
in the case of an event of default not relating to payment of principal,
any premium or interest, the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of all series affected by such event
of default (voting together as a single class) have made written request to
the trustee to institute proceedings as trustee;
-
such holders have offered indemnity reasonably satisfactory to the trustee
to cover the cost of the proceedings; and
-
the trustee does not institute a proceeding, and does not receive
conflicting directions from a majority in principal amount of the outstanding
debt securities of (i) the particular series, in the case of an event of
default relating to the payment of principal, any premium or interest or (ii)
all affected series, in the case of an event of default not relating to the
payment of principal, any premium or interest, in each case, within 60 days of
receiving the written notice of an event of default.
18
Modification of Indenture; Waiver
Without
the consent of any holders of debt securities, Net1 and the trustee may change
an indenture:
-
to fix any ambiguity, defect or inconsistency in the indenture;
-
to effect the assumption of a successor corporation of our obligations
under such indenture and the outstanding debt securities;
-
to add to our covenants for the benefit of the holders of all or any series
of debt securities under such indenture or surrender any right or power we
have under such indenture;
-
to change anything that does not materially adversely affect the interests
of any holder of debt securities of any series; and
-
to effect certain other limited purposes described in the indenture.
The
rights of holders of a series of debt securities may be changed by Net1 and the
trustee with the written consent of the holders of a majority of the principal
amount of the outstanding debt securities of all series then outstanding under
the relevant indenture (all such series voting together as a single class).
However, the following changes may only be made with the consent of each holder
of debt securities of each series affected by the change:
-
extending the fixed maturity;
-
reducing the principal amount;
-
reducing the rate of or extending the time of payment of interest;
-
reducing any premium payable upon redemption;
-
reducing the percentage of debt securities referred to above, the holders
of which are required to consent to any amendment; or
-
in respect of the subordinated indenture, making any change to the
subordination terms of any debt security that would adversely affect the
holders of the debt securities of that series.
Rights and Duties of the Trustee
The
trustee, except when there is an event of default, will perform only those
duties as are specifically stated in the indentures. If an event of default has
occurred with respect to any series of debt securities, the trustee must
exercise with respect to such debt securities the rights and powers it has under
the indenture and use the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Except as
provided in the preceding sentence, the trustee is not required to exercise any
of the powers given it by the indentures at the request of any holder of debt
securities unless it is offered reasonable security
19
or indemnity against the costs, expenses and liabilities that
it might incur. The trustee is not required to spend or risk its own money or
otherwise become financially liable while performing its duties or exercising
its rights or powers unless it reasonably believes that it will be repaid or
receive adequate indemnity. The trustee will not be deemed to have any notice of
any default or event of default unless a responsible officer of the trustee has
actual knowledge of or receives written notice of the default which specifies
the affected securities and the relevant indenture. Furthermore, the rights and
protections of the trustee, including its right of indemnification under the
indentures, extend to the trustees officers, directors, agents and employees,
and will survive the trustees resignation and removal.
Payment and Paying Agents
We
will pay interest on any debt securities to the person in whose name the debt
securities are registered on the regular record date for the applicable interest
payment date.
We
will pay principal, any premium and interest on the debt securities of a
particular series at the office of one or more paying agents that we designate
for that series. Unless otherwise stated in the applicable supplemental
indenture and prospectus supplement, we will initially designate the corporate
trust office of the trustee in the City of New York as our sole paying agent. We
will be required to maintain a paying agent in each place of payment for the
debt securities.
All
money we pay to a paying agent or the trustee for the payment of principal, any
premium or interest on any debt security which remains unclaimed for a period of
two years after the principal, premium or interest has become due and payable
will, upon our request, be repaid to us, and the holder of the debt security may
then look only to us for payment of those amounts.
Governing Law
The
indentures and the debt securities will be governed by and interpreted in
accordance with the laws of the State of New York.
Subordination of Subordinated Debt Securities
The
subordinated debt securities will be unsecured and will be subordinate and
junior in priority of payment to our other indebtedness on the terms described
in the prospectus supplement relating to such securities. The subordinated
indenture does not limit the amount of subordinated debt securities which we may
issue, nor does it limit our ability to issue any other secured or unsecured
debt.
The
prospectus supplement relating to any series of subordinated debt securities
will disclose the amount of debt of Net1 that will be senior to those
subordinated debt securities.
Subsidiary Guarantees
If
specified in the prospectus supplement, certain of our subsidiaries may
guarantee our obligations relating to debt securities issued under this
prospectus. The specific terms and
20
provisions of each subsidiary guarantee will be disclosed in
the applicable prospectus supplement.
DESCRIPTION OF WARRANTS
We
may issue warrants to purchase our debt or equity securities or securities of
third parties or other rights, including rights to receive payment in cash or
securities based on the value, rate or price of one or more specified
commodities, currencies, securities or indices, or any combination of the
foregoing. Warrants may be issued independently or together with any other
securities and may be attached to, or separate from, such securities. Each
series of warrants will be issued under a separate warrant agreement to be
entered into between us and a warrant agent. The terms of any warrants to be
issued and a description of the material provisions of the applicable warrant
agreement will be set forth in the applicable prospectus supplement.
DESCRIPTION OF PURCHASE CONTRACTS
We
may issue purchase contracts for the purchase or sale of:
-
debt or equity securities issued by us or securities of third parties, a
basket of such securities, an index or indices of such securities or any
combination of the above as specified in the applicable prospectus supplement;
-
currencies; or
-
commodities.
Each
purchase contract will entitle the holder thereof to purchase or sell, and
obligate us to sell or purchase, on specified dates, such securities, currencies
or commodities at a specified purchase price, which may be based on a formula,
all as set forth in the applicable prospectus supplement. We may, however,
satisfy our obligations, if any, with respect to any purchase contract by
delivering the cash value of such purchase contract or the cash value of the
property otherwise deliverable or, in the case of purchase contracts on
underlying currencies, by delivering the underlying currencies, as set forth in
the applicable prospectus supplement. The applicable prospectus supplement will
also specify the methods by which the holders may purchase or sell such
securities, currencies or commodities and any acceleration, cancellation or
termination provisions or other provisions relating to the settlement of a
purchase contract.
The
purchase contracts may require us to make periodic payments to the holders
thereof or vice versa, which payments may be deferred to the extent set forth in
the applicable prospectus supplement, and those payments may be unsecured or
prefunded on some basis. The purchase contracts may require the holders thereof
to secure their obligations in a specified manner to be described in the
applicable prospectus supplement. Alternatively, purchase contracts may require
holders to satisfy their obligations thereunder when the purchase contracts are
issued. Our obligation to settle such pre-paid purchase contracts on the
relevant settlement date may constitute indebtedness. Accordingly, pre-paid
purchase contracts will be issued under either the senior indenture or the
subordinated indenture.
21
DESCRIPTION OF UNITS
As
specified in the applicable prospectus supplement, we may issue units consisting
of one or more purchase contracts, warrants, debt securities, shares of
preferred stock, shares of common stock or any combination of such securities.
FORMS OF SECURITIES
Each
debt security, warrant and unit will be represented either by a certificate
issued in definitive form to a particular investor or by one or more global
securities representing the entire issuance of securities. Certificated
securities in definitive form and global securities will be issued in registered
form. Definitive securities name you or your nominee as the owner of the
security, and in order to transfer or exchange these securities or to receive
payments other than interest or other interim payments, you or your nominee must
physically deliver the securities to the trustee, registrar, paying agent or
other agent, as applicable. Global securities name a depositary or its nominee
as the owner of the debt securities, warrants or units represented by these
global securities. The depositary maintains a computerized system that will
reflect each investors beneficial ownership of the securities through an
account maintained by the investor with its broker/dealer, bank, trust company
or other representative, as we explain more fully below.
Registered Global Securities
We
may issue the registered debt securities, warrants and units in the form of one
or more fully registered global securities that will be deposited with a
depositary or its nominee identified in the applicable prospectus supplement and
registered in the name of that depositary or nominee. In those cases, one or
more registered global securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal or face amount of
the securities to be represented by registered global securities. Unless and
until it is exchanged in whole for securities in definitive registered form, a
registered global security may not be transferred except as a whole by and among
the depositary for the registered global security, the nominees of the
depositary or any successors of the depositary or those nominees.
If
not described below, any specific terms of the depositary arrangement with
respect to any securities to be represented by a registered global security will
be described in the prospectus supplement relating to those securities. We
anticipate that the following provisions will apply to all depositary
arrangements.
Ownership
of beneficial interests in a registered global security will be limited to
persons, called participants, that have accounts with the depositary or persons
that may hold interests through participants. Upon the issuance of a registered
global security, the depositary will credit, on its book-entry registration and
transfer system, the participants accounts with the respective principal or
face amounts of the securities beneficially owned by the participants. Any
dealers, underwriters or agents participating in the distribution of the
securities will designate the accounts to be credited. Ownership of beneficial
interests in a registered global security will be shown on, and the transfer of
ownership interests will be effected only through, records maintained by the
depositary, with respect to interests of participants, and on the records of
participants, with respect to interests of persons holding through participants.
The laws of some
22
states may require that some purchasers of securities take
physical delivery of these securities in definitive form. These laws may impair
your ability to own, transfer or pledge beneficial interests in registered
global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered
global security, that depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the securities represented by the
registered global security for all purposes under the applicable indenture,
warrant agreement or unit agreement. Except as described below, owners of
beneficial interests in a registered global security will not be entitled to
have the securities represented by the registered global security registered in
their names, will not receive or be entitled to receive physical delivery of the
securities in definitive form and will not be considered the owners or holders
of the securities under the applicable indenture, warrant agreement or unit
agreement. Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for that
registered global security and, if that person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the applicable indenture, warrant
agreement or unit agreement. We understand that under existing industry
practices, if we request any action of holders or if an owner of a beneficial
interest in a registered global security desires to give or take any action that
a holder is entitled to give or take under the applicable indenture, warrant
agreement or unit agreement, the depositary for the registered global security
would authorize the participants holding the relevant beneficial interests to
give or take that action, and the participants would authorize beneficial owners
owning through them to give or take that action or would otherwise act upon the
instructions of beneficial owners holding through them.
Principal,
premium, if any, and interest payments on debt securities, and any payments to
holders with respect to warrants or units, represented by a registered global
security registered in the name of a depositary or its nominee will be made to
the depositary or its nominee, as the case may be, as the registered owner of
the registered global security. None of Net1, the trustees, the warrant agents,
the unit agents or any other agent of Net1, agent of the trustees or agent of
the warrant agents or unit agents will have any responsibility or liability for
any aspect of the records relating to payments made on account of beneficial
ownership interests in the registered global security or for maintaining,
supervising or reviewing any records relating to those beneficial ownership
interests.
We
expect that the depositary for any of the securities represented by a registered
global security, upon receipt of any payment of principal, premium, interest or
other distribution of underlying securities or other property to holders on that
registered global security, will immediately credit participants accounts in
amounts proportionate to their respective beneficial interests in that
registered global security as shown on the records of the depositary. We also
expect that payments by participants to owners of beneficial interests in a
registered global security held through participants will be governed by
standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered
in street name, and will be the responsibility of those participants.
If
the depositary for any of these securities represented by a registered global
security is at any time unwilling or unable to continue as depositary or ceases
to be a clearing agency registered under the Securities Exchange Act of 1934,
and a successor depositary registered as a clearing agency under the Securities
Exchange Act of 1934 is not appointed by us within 90
23
days, we will issue securities in definitive form in exchange
for the registered global security that had been held by the depositary. Any
securities issued in definitive form in exchange for a registered global
security will be registered in the name or names that the depositary gives to
the relevant trustee, warrant agent, unit agent or other relevant agent of ours
or theirs. It is expected that the depositarys instructions will be based upon
directions received by the depositary from participants with respect to
ownership of beneficial interests in the registered global security that had
been held by the depositary.
PLAN OF DISTRIBUTION
Net1
and/or the selling securityholders, if applicable, may sell the securities in
one or more of the following ways (or in any combination) from time to time:
The
prospectus supplement will state the terms of the offering of the securities,
including:
-
the name or names of any underwriters, dealers or agents;
-
the purchase price of such securities and the proceeds to be received by
Net1, if any;
-
any underwriting discounts or agency fees and other items constituting
underwriters or agents compensation;
-
any initial public offering price;
-
any discounts or concessions allowed or reallowed or paid to dealers; and
-
any securities exchanges on which the securities may be listed.
Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If
we and/or the selling securityholders, if applicable, use underwriters in the
sale, the securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including:
-
negotiated transactions;
-
at a fixed public offering price or prices, which may be changed;
-
at market prices prevailing at the time of sale;
-
at prices related to prevailing market prices; or
-
at negotiated prices.
24
Unless
otherwise stated in a prospectus supplement, the obligations of the underwriters
to purchase any securities will be conditioned on customary closing conditions
and the underwriters will be obligated to purchase all of such series of
securities, if any are purchased.
We
and/or the selling securityholders, if applicable, may sell the securities
through agents from time to time. The prospectus supplement will name any agent
involved in the offer or sale of the securities and any commissions we pay to
them. Generally, any agent will be acting on a best efforts basis for the period
of its appointment.
We
and/or the selling securityholders, if applicable, may authorize underwriters,
dealers or agents to solicit offers by certain purchasers to purchase the
securities from Net1 at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. The contracts will be subject only
to those conditions set forth in the prospectus supplement, and the prospectus
supplement will set forth any commissions we pay for solicitation of these
contracts.
Underwriters
and agents may be entitled under agreements entered into with Net1 and/or the
selling securityholders, if applicable, to indemnification by Net1 and/or the
selling securityholders, if applicable, against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments which the underwriters or agents may be required to make.
Underwriters and agents may be customers of, engage in transactions with, or
perform services for Net1 and its affiliates in the ordinary course of business.
Each
series of securities will be a new issue of securities and will have no
established trading market other than the common stock which is listed on the
Nasdaq Global Select Market. Any underwriters to whom securities are sold for
public offering and sale may make a market in the securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The securities, other than the common stock,
may or may not be listed on a national securities exchange.
EXPERTS
The
financial statements and managements report on the effectiveness of internal
control over financial reporting incorporated in this prospectus by reference
from the Companys Annual Report on Form 10-K have been audited by Deloitte
& Touche (South Africa), an independent registered public accounting firm,
as stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The
audited consolidated financial statements of Prism Holdings Limited beginning on
page F-4 of our Current Report on Form 8-K/A dated September 13, 2006, have been
so incorporated in reliance on the report of PricewaterhouseCoopers Inc.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
25
LEGAL MATTERS
DLA
Piper US LLP, New York, New York, will provide us with an opinion as to certain
legal matters in connection with the securities we are offering.
26
5,000,000 Shares
Common Stock
_________________________
PROSPECTUS SUPPLEMENT
October 2, 2008
_________________________
Net 1 Ueps Technologies (NASDAQ:UEPS)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Net 1 Ueps Technologies (NASDAQ:UEPS)
Historical Stock Chart
Von Jul 2023 bis Jul 2024