Item 1.01 Entry into a Material Definitive Agreement.
Subscription Agreement
On April 11, 2016, Net 1 UEPS Technologies, Inc. (the
Company) entered into a Subscription Agreement (the Subscription Agreement)
with International Finance Corporation, IFC African, Latin American and
Caribbean Fund, LP, IFC Financial Institutions Growth Fund, LP, and Africa
Capitalization Fund, Ltd. (collectively, the Investors). Under the
Subscription Agreement, the Investors have agreed to purchase, and the Company
has agreed to sell, in the aggregate, approximately 9.98 million shares of the
Companys common stock, par value $0.001 per share, at a price of $10.79 per
share, for gross proceeds to the Company of approximately $107.7 million.
Closing of the transaction is subject to closing conditions.
Policy Agreement
The Company has entered into a Policy Agreement with the
Investors (the Policy Agreement) that becomes effective on the closing under
the Subscription Agreement. The material terms of the Policy Agreement are
described below.
Board Rights
For so long as the Investors in aggregate beneficially own
shares representing at least 5% of the Companys common stock, the Investors
will have the right to nominate one director to the Companys board of
directors. For so long as the Investors in aggregate beneficially own shares
representing at least 2.5% of the Companys common stock, the Investors will
have the right to appoint an observer to the Companys board of directors at any
time when they have not designated, or do not have the right to designate, a
director.
Registration Rights
The Company has agreed to grant certain registration rights to
the Investors for the resale of their shares of the Companys common stock,
including filing a resale shelf registration statement and taking certain
actions to facilitate resales thereunder.
Put Option
Each Investor will have the right, upon the occurrence of
specified triggering events, to require the Company to repurchase all of the
shares of its common stock purchased by the Investors pursuant to the
Subscription Agreement (or upon exercise of their preemptive rights discussed
below). Events triggering this put right relate to (1) the Company being the
subject of a governmental complaint alleging, a court judgment finding or an
indictment alleging that the Company (a) engaged in specified corrupt,
fraudulent, coercive, collusive or obstructive practices; (b) entered into
transactions with targets of economic sanctions; or (c) failed to operate its
business in compliance with anti-money laundering and anti-terrorism laws; or (2)
the Company rejecting a bona fide offer to acquire all of its outstanding Common
Stock at a time when it has in place or implements a shareholder rights plan, or
adopting a shareholder rights plan triggered by a beneficial ownership threshold
of less than twenty percent. The put price per share will be the higher of the
price per share paid by the Investors pursuant to the Subscription Agreement (or
paid when exercising their preemptive rights) and the volume
weighted average price per share prevailing for the 60 trading days preceding
the triggering event, except that with respect a put right triggered by
rejection of a bona fide offer, the put price per share will be the highest
price offered by the offeror.
Preemptive Rights
For so long as the Investors hold in aggregate 5% of the
outstanding shares of common stock of the Company, each Investor will have the
right to purchase its pro-rata share of new issuances of securities by the
Company, subject to certain exceptions.
The foregoing descriptions of the Subscription Agreement and
the Policy Agreement, and the transactions contemplated thereby, do not purport
to be complete and are qualified in their entirety by reference to the full text
of such agreements, which are attached hereto as Exhibits 10.31 and 10.32,
respectively, and are incorporated by reference herein.