EXHIBIT E
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DEED OF DELEGATION AND ASSUMPTION
Between
THE SOUTH AFRICAN PRIVATE EQUITY FUND III L.P.
THE SOUTH AFRICAN PRIVATE EQUITY TRUST III
BRENTHURST PRIVATE EQUITY SOUTH AFRICA I LIMITED
BRENTHURST PRIVATE EQUITY II LIMITED
ROSE NOMINEES LIMITED
and
THE TRUSTEES OF THE NEW APLITEC PARTICIPATION TRUST
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CONTENTS
1. INTERPRETATION 1
2. INTRODUCTION 6
3. SUSPENSIVE CONDITION 7
4. DELEGATION AND ASSUMPTION 8
5. DETERMINATION OF EXTENT OF OBLIGATIONS 8
6. PAYMENT 10
7. DOMICILIUM AND NOTICES 10
8. APPLICABLE LAW 12
9. GENERAL 12
10. COSTS 13
11. COUNTERPARTS 13
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1. INTERPRETATION
In this agreement -
1.1 clause headings are for convenience purposes only and shall not be used
in its interpretation;
1.2 unless the context clearly indicates a contrary intention:
1.2.1 an expression which denotes any gender includes the other
genders, a natural person includes an artificial person and
vice versa and the singular includes the plural and vice
versa;
1.2.2 where any term is defined within a particular clause, other
than the interpretation clause, that term shall bear the
meaning ascribed to it in that clause wherever it is used in
this agreement;
1.2.3 the following expressions shall bear the following meanings
and related expressions shall bear corresponding meanings -
1.2.3.1 "acquisition agreement" means the agreement whereby
New Aplitec will acquire all the assets and
liabilities of the Aplitec Group, but excluding ZAR
300 million in cash and additional cash sufficient to
result in the distribution of an extra ZAR 25 cents
(after payment of any STC thereon) per Aplitec share
to Aplitec shareholders who elect the cash option and
the shares in Country On A Card (Proprietary)
Limited, Net1 Loyalty (Proprietary) Limited and Net1
Payroll (Proprietary) Limited;
1.2.3.2 "Aplitec" means Net1 Applied Technology Holdings
Limited, Registration Number 1997/007207/06, a public
company incorporated in the RSA;
1.2.3.3 "Aplitec Group" means Aplitec and all its
subsidiaries;
1.2.3.4 "Aplitec Holdings Participation Trust" means the
Aplitec Holdings Participation Trust, a Star trust
established in the Cayman Islands;
1.2.3.5 "Aplitec shareholder" means a holder of Aplitec
shares;
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1.2.3.6 "Aplitec shares" means ordinary shares of ZAR 0,1
cent each in the issued share capital of Aplitec;
1.2.3.7 "B class loan account" means the B class loan account
against New Aplitec in the sum of ZAR 101,004 cents,
to be credited to the New Aplitec Participation Trust
as fully paid up for each Aplitec share in respect of
which an Aplitec shareholder exercises the
reinvestment option or to SAPEF and SAPET in terms of
the underwriting agreement;
1.2.3.8 "B class preference share" means a B class preference
share in the issued share capital of New Aplitec to
be issued to the New Aplitec Participation Trust
credited as fully paid up for each Aplitec share in
respect of which an Aplitec shareholder exercises the
reinvestment option or to SAPEF and SAPET in terms of
the underwriting agreement;
1.2.3.9 "Brenthurst I" means Brenthurst Private Equity South
Africa I Limited, Registration Number 562615, a
company incorporated in the British Virgin Islands;
1.2.3.10 "Brenthurst II" means Brenthurst Private Equity II
Limited, Registration Number 514615, a company
incorporated in the British Virgin Islands;
1.2.3.11 "cash option" means the cash option referred to in
clause 2.3.1;
1.2.3.12 "common shares" means common shares in the authorised
share capital of NUEP having the rights of ordinary
shares;
1.2.3.13 "common stock purchase agreement" means the agreement
entered into between NUEP and SAPEF III International
G.P. Limited on 30 January 2004 whereby NUEP will
issue to SAPEF III International G.P. Limited (or its
nominee) 105 661 428 common shares in consideration
for cash in the amount of US$0,50 per common share
and the procurement of the assignment of all the
issued A ordinary shares in New Aplitec to NUEP;
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1.2.3.14 "condition" means the suspensive condition referred
to in clause 3;
1.2.3.15 "distribution ratio" means the ratio in which the
special convertible preference shares shall be
distributed on the occurrence of a trigger event,
which at the closing date of the acquisition
agreement, shall be 0,814285714 special convertible
preference shares for every one B class preference
share. If after the closing date NUEP consolidates or
sub-divides the common shares, the special
convertible preference shares shall be consolidated
or sub-divided in the same proportions, and the
distribution ratio shall be adjusted accordingly;
1.2.3.16 "effective date" means the date that SAPEF and
SAPET's obligations to underwrite the reinvestment
option become effective in terms of the underwriting
agreement;
1.2.3.17 "New Aplitec" means Net1 Applied Technologies South
Africa Limited, Registration Number 2002/031446/06,
formerly known as Newshelf 713 (Proprietary) Limited,
a company incorporated in the RSA;
1.2.3.18 "New Aplitec Participation Trust" means the New
Aplitec Participation Trust, Master's Reference
Number IT 8094/03, a bewind trust registered in the
RSA, represented herein by its trustee, First
National Asset Management and Trust Company
(Proprietary) Limited;
1.2.3.19 "NUEP" means Net1 UEPS Technologies, Inc., IRS
Employer Number 65/0903895, a company incorporated in
Florida in the United States of America;
1.2.3.20 "reinvestment option" means the reinvestment option
referred to in clause 2.3.2;
1.2.3.21 "reinvesting shareholders" means those Aplitec
shareholders who elect the reinvestment option;
1.2.3.22 "Rose" means Rose Nominees Limited, Registration
Number A/C 20423, a company incorporated in Guernsey;
1.2.3.23 "RSA" means the Republic of South Africa;
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1.2.3.24 "SAPEF" means the South African Private Equity Fund
III, L.P., a limited liability partnership
incorporated in the Cayman Islands, represented
herein by its general partner, SAPEF III
International G.P. Limited;
1.2.3.25 "SAPET" means the South African Private Equity Trust
III, Master's Reference Number IT9960/1998, a trust
established in the RSA, represented herein by its
trustee, Brait Capital Partners Trustees
(Proprietary) Limited;
1.2.3.26 "signature date" means the date upon which this
agreement has been signed by all the parties;
1.2.3.27 "special convertible preference shares" means special
convertible preference shares in NUEP;
1.2.3.28 "trigger event" means:
1.2.3.28.1 a unit holder notifies the Trustees of the
New Aplitec Participation Trust in writing
that he wishes the New Aplitec Participation
Trust to dispose of the shares and loan
account attributable to some or all of his
units; or
1.2.3.28.2 New Aplitec is wound-up or placed under
judicial management, whether provisionally
or finally; or
1.2.3.28.3 NUEP is wound up or placed under judicial
management, whether provisionally or
finally; or
1.2.3.28.4 South African Exchange Controls are relaxed
or abolished, permitting unit holders to
hold the common shares directly;
1.2.3.29 "underwriting agreement" means the underwriting
agreement entered into between SAPEF, SAPET and New
Aplitec on 5 November 2003 whereby SAPEF and SAPET
undertook to underwrite the reinvestment option and,
via the New Aplitec Participation Trust, to subscribe
for any the B class preference shares and B class
loan accounts not taken up because the Aplitec
shareholders elect the cash option rather than the
reinvestment option, but limited to a
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maximum sum of ZAR 436 972 343,10;
1.2.3.30 "unit" means a unit in the New Aplitec Participation
Trust, comprising a capital contribution of 183,996
cents and a loan contribution of ZAR 101,004 cents;
1.2.3.31 "unit holder" means a person who from time to time
holds units;
1.2.3.32 "US$" means dollars, the currency of the United
States;
1.2.3.33 "ZAR" means Rands, the currency of the RSA;
1.3 the terms "holding company" and "subsidiary" shall bear the
meaning assigned to them in the Act;
1.4 should any provision in a definition be a substantive
provision conferring rights or imposing obligations on any
party, then effect shall be given to that provision as if it
were a substantive provision in the body of this agreement;
1.5 any reference to an enactment, regulation, rule or by-law is
to that enactment, regulation, rule or by-law as at the
signature date, and as amended or replaced from time to time;
1.6 when any number of days is prescribed, such number shall
exclude the first and include the last day, unless the last
day falls on a Saturday, Sunday or public holiday in the RSA,
in which case the last day shall be the next succeeding day
which is not a Saturday, Sunday or public holiday;
1.7 any schedule or annexure to this agreement shall form part of
this agreement;
1.8 the use of the word "including" followed by a specific
example/s shall not be construed as limiting the meaning of
the general wording preceding it and the eiusdem generis rule
shall not be applied in the interpretation of such general
wording or such specific example/s;
1.9 the expiration or termination of this agreement shall not
affect those provisions of this agreement which expressly
provide that they will operate after any such expiration or
termination or which of necessity must continue to have effect
after such expiration or termination, notwithstanding the fact
that the clauses
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themselves do not expressly provide this;
1.10 in its interpretation, the contra proferentem rule of
construction shall not apply (this agreement being the product
of negotiations between the parties) nor shall this agreement
be construed in favour of or against any party by reason of
the extent to which any party or its professional advisors
participated in the preparation of this agreement; and
1.11 recordals shall be binding on the parties and are not merely
for information purposes.
2. INTRODUCTION
2.1 In terms of the acquisition agreement, New Aplitec will
acquire all the assets and liabilities of the Aplitec Group.
2.2 Pursuant to the acquisition agreement, it is intended that
Aplitec will be voluntarily wound up and that the Aplitec
shareholders will receive the consideration payable by New
Aplitec for Aplitec's assets and liabilities in the form of
the advance distribution of a liquidation dividend.
2.3 The Aplitec shareholders will be entitled to receive the
advance distribution, of 475 cents per Aplitec share plus an
additional 25 cents per Aplitec share for those Aplitec
shareholders who elect the cash option, in whole or in part at
their election as follows:
2.3.1 THE CASH OPTION
500 cents in cash in respect of each Aplitec share;
and/or
2.3.2 THE REINVESTMENT OPTION
In respect of each Aplitec share, an amount of 190
cents in cash and the balance in the form of a
reinvestment in New Aplitec via the New Aplitec
Participation Trust, comprising one B class
preference share to the value of 183,996 cents and a
B class loan account of 101,004 cents by way of nil
paid renounceable letters of allocation issued by New
Aplitec, which will be deemed to have been renounced
by the Aplitec shareholders in favour of the New
Aplitec Participation Trust. In addition, the New
Aplitec
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Participation Trust, for the benefit of the relevant
Aplitec shareholders, will be granted the right by
the Aplitec Holdings Participation Trust to receive
special convertible preference shares in the
distribution ratio in due course on the occurrence of
a trigger event.
2.4 Those Aplitec shareholders who choose to receive the
consideration payable to them in whole or in part by way of
the reinvestment option shall subscribe for and shall be
issued with one unit credited as fully paid for each share in
Aplitec in respect of which they exercise the reinvestment
option.
2.5 In turn, the New Aplitec Participation Trust shall be issued
with one B class preference share, to the value of 183,996
cents, and one B class loan account in the sum of 101,004
cents, both credited as fully paid, for each Aplitec share in
respect of which the reinvestment option is exercised.
2.6 In terms of the underwriting agreement, SAPEF and SAPET are
obliged, via the New Aplitec Participation Trust, to subscribe
for any B class preference shares and B class loan accounts
not taken up as a result of the Aplitec shareholders electing
the cash option rather than the reinvestment option, up to a
maximum sum of R 436 972 343,10.
2.7 Brenthurst I, Xxxxxxxxxx XX and Xxxx wish to assume certain of
the obligations of SAPEF and SAPET under the underwriting
agreement and SAPEF and SAPET are willing to delegate to
Brenthurst I, Xxxxxxxxxx XX and Rose these obligations on the
terms and conditions of this agreement.
3. SUSPENSIVE CONDITION
3.1 This entire agreement, save for the provisions of clause 1,
this clause 3, and clauses 7 to 10, which shall be of
immediate force and effect, is subject to the underwriting
agreement becoming unconditional.
3.2 The condition has been expressed for the benefit of all the
parties.
3.3 The parties shall use their best endeavours to procure the
fulfillment of the condition as soon as reasonably possible
after the signature date.
3.4 In the event that the suspensive condition is not fulfilled or
waived timeously, then
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save for the provisions of clause 1, this clause 3, and
clauses 7 to 10, which shall remain effective, this agreement
shall never become of any force or effect and no party shall
have any claim against any other party for anything done
hereunder or arising herein, save as a result of a breach of
any of the provisions of clause 3.3 by a party, and the
parties shall be restored to the status quo ante.
4. DELEGATION AND ASSUMPTION
SAPEF and SAPET hereby delegate a portion of their obligations under
the underwriting agreement as determined in clause 5 to Brenthurst I,
Brenthurst II and Rose, and Brenthurst I, Brenthurst II and Rose hereby
assume such obligations from SAPEF and SAPET with effect from the
effective date.
5. DETERMINATION OF EXTENT OF OBLIGATIONS
5.1 If the total capital required in terms of the common stock
purchase agreement and the underwriting agreement is between
US$52 830 714,00 and US$93 798 203,49 (based on an exchange
rate of ZAR7,00 to US$1,00), the amount of the obligations
assumed by Xxxx under the underwriting agreement shall be
determined in accordance with the following formula:
Y = (0,0122047996X + 0,3552117220 - 1,0) * 7
Where:
X = total capital required in terms of the common
stock purchase agreement and the underwriting
agreement in US$ Million (based on an exchange rate
of ZAR7,00 to US$1,00)
Y = total underwriting required from Rose in ZAR
million.
5.2 If the total capital required in terms of the common stock
purchase agreement and the underwriting agreement is between
US$93 798 203,49 and US$115 255 308,73 (based on an exchange
rate of ZAR7,00 to US$1,00), the amount of the obligations
assumed by Xxxx under the underwriting agreement shall be ZAR
3 500 000,00.
5.3 Brenthurst I and Brenthurst II shall assume portion of SAPEF
and SAPET's
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obligations under the underwriting agreement as determined in
terms of clauses 5.4 and 5.5 in the proportions Brenthurst I
33.33% and Brenthurst II 66.66% until the obligations of
Brenthurst I reach US$ 0 000 000,00 from which point
Brenthurst II shall assume 100%.
5.4 If the total capital required in terms of the common stock
purchase agreement and the underwriting agreement is between
US$52 830 714,00 and US$93 798 203,49 (based on an exchange
rate of ZAR7,00 to US$1,00), the extent of the obligations
under the underwriting agreement assumed by Brenthurst I and
Brenthurst II in the proportions set out in clause 5.3 shall
be determined in accordance with the following formula:
Y = (0,158662395X + 0,1177523858 - 8,5) * 7
Where:
X = total capital required in terms of the common
stock purchase agreement and the underwriting
agreement in US$ Million (based on an exchange rate
of ZAR7,00 to US$1,00)
Y = total underwriting required from Brenthurst I and
Brenthurst II in the proportions referred to in
clause 5.3 in ZAR million.
5.5 If the total capital required in terms of the common stock
purchase agreement and the underwriting agreement is between
US$93 798 203,49 and US$115 255 308,73 (based on an exchange
rate of ZAR7,00 to US$1,00), the extent of the obligations
under the underwriting agreement assumed by Brenthurst I and
Brenthurst II in the proportions set out in clause 5.3 shall
be determined in accordance with the following formula:
Y = (0,2097207405X - 4,6714286903 - 8,5) * 7
Where:
X = total capital required in terms of the common
stock purchase agreement and the underwriting
agreement in US$ Million (based on an exchange rate
of ZAR7,00 to US$1,00)
Y = total underwriting required from Brenthurst I and
Brenthurst II in the
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proportions referred to in clause 5.3 in ZAR million.
6. PAYMENT
6.1 The New Aplitec Participation Trust has appointed SAPEF and
SAPET as its agents to pay directly to New Aplitec the amount
they are obliged to pay on the date that payment must be made
in terms of the underwriting agreement, rather than making
payment to the New Aplitec Participation Trust, which in turn
would then have to pay the amounts in question to New Aplitec.
6.2 Similarly, the New Aplitec Participation Trust hereby appoints
Brenthurst I, Brenthurst II and Rose to pay directly to New
Aplitec the amount they are obliged to pay in terms of this
agreement on the date that payment is required in terms of the
underwriting agreement.
6.3 The B class preference shares issued and B class loan accounts
credited pursuant to the payments contemplated in clause 6.2
will be issued and credited to the New Aplitec Participation
Trust, not to Brenthurst I, Brenthurst II and Rose.
6.4 Upon payment as contemplated in clause 6.2, the New Aplitec
Participation Trust will credit Brenthurst I, Brenthurst II
and Rose in its books with one unit for every one B class
preference share and B class loan account subscribed for by
Brenthurst I, Brenthurst II and Xxxx as agent for the New
Aplitec Participation Trust.
6.5 Brenthurst I, Brenthurst II and Xxxx shall pay any amounts
they are required to pay in terms of this agreement to New
Aplitec in cash, free of exchange, deduction or set off, by
electronic transfer to the bank account nominated by New
Aplitec in writing.
7. DOMICILIUM AND NOTICES
7.1 The parties choose domicilium citandi et executandi for all
purposes of the giving of any notice, the payment of any sum,
the serving of any process and for any other purpose arising
from this agreement, as follows:
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Brenthurst I and II: 0 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxx Town
Tortola
British Virgin Islands
Fax: x000 000 000 000
For attention P Krzysica
Rose: The Grange
St Xxxxx Port
Guernsey GY1 3AP
Channel Islands
Fax: x00 (0) 0000 000000
For attention: Xxxxx Xxxxxxxxx
SAPEF: Xxxxxx House
P O Box 000 XX
Xxxx Xxxxxx
Xxxxxx Town
Grand Cayman
Cayman Islands
Fax: (000) 0000000
For attention
SAPET: 0 Xxxxxxx Xxxx
Illovo Boulevard
Illovo
Sandton
RSA
Fax: x00 00 000 0000
For attention Xxxxx Xxx
The New Aplitec
Participation Trust Mezzanine Floor
0 Xxxxx Xxxxx
Bank City
Corner Xxxxxxxx and Xxxxxxxxx Streets
Johannesburg
Fax: x00 00 000 0000
For attention Xxx Xxxxxx
7.2 Each party shall be entitled from time to time, by written
notice to the other/s, to vary its domicilium to any other
physical address.
7.3 Any notice given and any payment made by a party to another
party which is
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delivered by hand during the normal business hours of the
addressee at the addressee's domicilium shall be rebuttably
presumed to have been received by the addressee at the time of
delivery.
7.4 Any notice given by a party to another party by fax shall be
rebuttably presumed to have been received by the addressee on
the date of successful transmission thereof.
7.5 Notwithstanding anything to the contrary in this clause 7, a
written notice or other communication actually received by a
party shall be adequate notice to it notwithstanding that the
notice was not delivered to its given domicilium.
8. APPLICABLE LAW
All matters arising from or in connection with this agreement, its
validity, existence or termination shall be determined in accordance
with the laws for the time being of the RSA and the parties hereby
submit to the non-exclusive jurisdiction of the High Court of South
Africa, Witwatersrand Local Division.
9. GENERAL
9.1 This document constitutes the sole record of the agreement
between the parties in relation to its subject matter.
9.2 No party shall be bound by any representation, warranty,
promise or the like not recorded in this document.
9.3 No addition to, variation, novation or agreed cancellation of
this agreement shall be of any force or effect unless in
writing and signed by or on behalf of the parties.
9.4 No suspension of a right to enforce any term of this agreement
and no pactum de non petendo shall be of any force or effect
unless in writing and duly signed by or on behalf of the
parties.
9.5 No indulgence which a party may grant to another party shall
constitute a waiver of any of the rights of the grantor unless
in writing signed by both parties.
9.6 All costs, charges and expenses of any nature whatever which
may be incurred
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by a party in enforcing its rights in terms of this agreement,
including without limiting the generality of the aforegoing,
legal costs on the scale of attorney and own client and
collection commission, irrespective of whether any action has
been instituted, shall be recoverable on demand from the party
against which such rights are successfully enforced and shall
be payable on demand.
9.7 The provisions of this agreement shall be binding upon the
successors-in-title- and the permitted assigns of the parties.
Accordingly, the rights and obligations of each party pursuant
to this agreement shall devolve upon and bind its
successors-in-title and permitted assigns.
9.8 All provisions in this agreement are, notwithstanding the
manner in which they have been put together or linked
grammatically, severable from each other. Any provision of
this agreement which is or becomes unenforceable in any
jurisdiction, whether due to voidness, invalidity, illegality,
unlawfulness or for any other reason whatsoever, shall, in
such jurisdiction only and only to the extent that it is so
unenforceable, be treated as pro non scripto and the remaining
provisions of this agreement shall be of full force and
effect. The parties declare that it is their intention that
this agreement would be executed without such unenforceable
provisions if they were aware of such unenforceability at the
time of its execution.
10. COSTS
Each party shall bear and pay its own fees and costs of and incidental
to the negotiation, drafting, preparation and execution of this
agreement.
11. COUNTERPARTS
This agreement may be signed in separate counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. A counterpart of this agreement
in telefax form shall be conclusive evidence of the original signature
and shall be as effective in law as the counterparts in original form
showing the original signatures.
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Signed at on 2004
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THE SOUTH AFRICAN PRIVATE EQUITY FUND III L.P.
who warrants that he is duly authorised hereto
Signed at on 2004
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THE SOUTH AFRICAN PRIVATE EQUITY TRUST III
who warrants that he is duly authorised hereto
Signed at on 2004
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BRENTHURST PRIVATE EQUITY SOUTH AFRICA I LIMITED
who warrants that he is duly authorised hereto
Signed at on 2004
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BRENTHURST PRIVATE EQUITY II LIMITED
who warrants that he is duly authorised hereto
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Signed at on 2004
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ROSE NOMINEES LIMITED
who warrants that he is duly authorised hereto
Signed at on 2004
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THE NEW APLITEC PARTICIPATION TRUST
who warrants that he is duly authorised hereto
