EXHIBIT B
1,516,532 Shares
NET 1 UEPS TECHNOLOGIES, INC.
COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
August 2, 2005
August 2, 2005
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Certain shareholders of the Company (the "SELLING SHAREHOLDERS") named in
Schedule I hereto severally propose to sell to the several Underwriters named in
Schedule II hereto (the "UNDERWRITERS"), an aggregate of 1,516,532 shares of the
common stock, par value $0.001 per share of Net 1 UEPS Technologies, Inc., a
Florida corporation (the "COMPANY") (the "FIRM SHARES"), each Selling
Shareholder selling the amount set forth opposite such Selling Shareholder's
name in Schedule I hereto. In addition, certain holders of units in The New
Aplitec Participation Trust have proposed to sell to the Underwriters an
aggregate of 8,742,093 shares of common stock of the Company that they
beneficially own.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 1,538,794 shares of its common stock, par value
$0.001 per share of the Company (the "ADDITIONAL SHARES") if and to the extent
that you, as Managers of the offering, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 4 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES",
which term shall include, where appropriate, the shares of Common Stock to be
sold by certain unitholders to the Underwriters. The shares of common stock, par
value $0.001 per share of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "COMMON STOCK."
The Company and the Selling Shareholders are hereinafter sometimes collectively
referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an
abbreviated registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION
STATEMENT"), then any reference herein to the term "REGISTRATION STATEMENT"
shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and, except as disclosed in the Prospectus,
are owned directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
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(e) The New Aplitec Participation Trust has been duly created and is
validly existing as a bewind trust in good standing under the laws of South
Africa.
(f) The Aplitec Holdings Participation Trust has been duly created and is
validly existing as a purpose trust in good standing under Part VIII of the
Trust Law (2001 Revision) of the Cayman Islands.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) There are no outstanding securities issued by the Company convertible
into or exchangeable for, rights, warrants or options to acquire from the
Company, or obligations of the Company to issue, Common Stock or any of the
capital stock of the Company, except as described in the Prospectus. There are
no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or direct
interests in the Company or any of its subsidiaries, other than as set forth in
the Prospectus.
(j) Except as described in the Prospectus, the Shares are freely
transferable by the Company or the Selling Shareholders to or for the account of
the several Underwriters and (to the extent described in the Prospectus) the
initial holders thereof; and, except as disclosed in the Prospectus, there are
no restrictions on subsequent transfers of the Shares under the laws of the
United States.
(k) The Shares have been approved for listing on the Nasdaq National
Market, subject to official notice of issuance.
(l) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares that may
be sold by the Company have been duly authorized and are validly issued, fully
paid and non-assessable.
(m) The Shares that may be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(n) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of (i) the certificate of incorporation or by-laws of the Company, or
(ii) any agreement or other instrument binding upon the Company or any of its
subsidiaries or (iii) any applicable law, judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
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various states in connection with the offer and sale of the Shares and except,
in the case of clauses (ii) and (iii) above, as would not have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(o) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(p) There are no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not described or
filed as required.
(q) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(r) The Company is not, and after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(s) The Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(t) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
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(u) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(v) Except as disclosed in the Prospectus, no material relationships,
direct or indirect, or material transactions exist between the Company and its
subsidiaries on the one hand and their respective affiliates, officers and
directors or their shareholders, customers or suppliers on the other hand; and
the statements in the Prospectus in this regard are true and correct in all
material respects and do not omit anything necessary to make such statements, in
the light of the circumstances under which they are made, not misleading.
(w) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction; (ii) the Company has not
purchased any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of the Company
and its subsidiaries, except in each case as described in the Prospectus or
pursuant to conversions made in accordance with the terms of the Company's
Special Convertible Preference Stock.
(x) The consolidated financial statements (and the notes thereto) of the
Company included in the Prospectus present fairly, in all material respects, the
financial position of the Company on a consolidated basis as of the dates
indicated, and the results of operations and the cash flows for the periods
specified; and (i) such financial statements have been prepared in conformity
with U.S. generally accepted accounting principles and (ii) Deloitte & Touche
(South Africa) and PKF (JhB) Inc., who have expressed an opinion on the
financial statements of the Company based on their audits, are each independent
auditors with respect to the Company within the meaning of the Securities Act,
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the
applicable rules and regulations of the Commission thereunder.
(y) Each of the Company and its subsidiaries has filed with all
appropriate taxing authorities all income, franchise or other tax returns
required to be filed through the date hereof except for those income, franchise
or other tax returns the failure of which to file will not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company or any of its subsidiaries have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might individually or in the aggregate have)
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(z) Neither the Company nor any of its subsidiaries owns any real property
that is material to the business of the Company and its subsidiaries taken as a
whole; each has good and marketable title to all personal property owned by them
which is material to the business of the
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Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus.
(aa) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by them in
connection with the business now operated by them, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(bb) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in the Prospectus, or, to the
knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that is reasonably likely
to have a material adverse effect on the Company and its subsidiaries, taken as
a whole.
(cc) Except as otherwise disclosed in the Prospectus, (i) the Company and
each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged, (ii) neither the
Company nor any of its subsidiaries has been refused any insurance coverage
sought or applied for, and (iii) neither the Company nor any of its subsidiaries
has any reasonable basis to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(dd) Except as otherwise disclosed in the Prospectus, the Company and its
subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(ee) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed
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in accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with U.S. generally accepted accounting principles and
to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Since June 30, 2004, (i) the Company has been in the process of
carrying out evaluations, under the supervision and with the participation of
the Company's management, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures in accordance with Rule 13a-15
of the Exchange Act and has not identified a material weakness in the Company's
internal control over financial reporting (whether or not remediated) and (ii)
there has been no change in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
(ff) There is, and has been, no material failure on the part of the
Company or, to the Company's knowledge, any of the Company's directors or
officers, in their respective capacities as such, to comply with any applicable
provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 thereof related to
loans and Sections 302 and 906 thereof related to certifications. In addition,
based on its preparations to date including consultation with its independent
public accountants, the Company has no reasonable basis to believe that it will
not be able to comply on a timely basis with the reporting requirements of
Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 when such requirements become
applicable to the Company.
(gg) Neither the Company nor any of its subsidiaries nor any of their
respective officers, directors, managers, agents or employees have, directly or
indirectly made or authorized any contribution, payment or gift of funds, or
property to any official, employee or agent of any governmental agency,
authority or instrumentality in South Africa or any other jurisdiction where
either the payment or gift was, or is, prohibited under applicable law, rule or
regulation of any relevant locality, including but not limited to, the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or the rules and regulations
promulgated thereunder.
(hh) The Company has not been advised, and has no reasonable basis to
believe, that it and each of its subsidiaries are not conducting business in
compliance with all applicable laws, rules and regulations (including, without
limitation, those related to financial services and payment systems) of the
jurisdictions in which it is conducting business, except as described in the
Prospectus or to the extent that failure to be so in compliance would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(ii) Except as described in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), the Company has
not sold, issued or distributed any shares of Common Stock during the six-month
period preceding the date hereof, including any sales pursuant to Rule 144A
under, or Regulation D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
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2. Additional Representations and Warranties of the Company. The Company
represents and warrants, on behalf of itself and its subsidiaries, that:
(a) Neither it nor, to the Company's knowledge, any existing agent is an
entity or, in the case of an agent, an individual that (i) is the subject of
economic sanctions administered by the Office of Foreign Assets Control of the
U.S. Department of the Treasury ("OFAC"), or (ii) is located or resident in, or
organized under the laws of, a country subject to OFAC-administered economic
sanctions (a "PROHIBITED COUNTRY");
(b) To the Company's knowledge, none of its shareholders is a government,
individual or entity that is the subject of OFAC-administered sanctions or is
located or resident in, or organized under the laws of, a Prohibited Country;
and
(c) (i) Each such subsidiary that is a non-U.S. person does not engage in
any business with or in Cuba or with blocked Cuban nationals that would violate
OFAC-administered sanctions against Cuba; and (ii) the Company and each such
subsidiary that is a U.S. person is in compliance, in all material respects,
with OFAC-administered sanctions programs.
3. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or
on behalf of such Selling Shareholder.
(b) The execution and delivery by or on behalf of, as the case may be,
such Selling Shareholder of, and the performance by or on behalf of, as the case
may be, such Selling Shareholder of its obligations under, this Agreement, the
Custody Agreement signed on behalf of such Selling Shareholder by the
Attorneys-in-Fact (as defined below) and The Bank of New York, as Custodian,
relating to the deposit of the Shares to be sold by such Selling Shareholder
(the "CUSTODY AGREEMENT") and the Power of Attorney appointing certain
individuals as such Selling Shareholder's attorneys-in-fact to the extent set
forth therein (the "ATTORNEYS-IN-FACT"), relating to the transactions
contemplated hereby and by the Registration Statement (the "POWER OF ATTORNEY")
will not contravene any provision of (i) the certificate of incorporation,
by-laws or similar organizational documents of such Selling Shareholder, as
applicable, (ii) any agreement or other instrument binding upon such Selling
Shareholder or (iii) any applicable law, judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Shareholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by or on behalf of, as the case may be, such Selling Shareholder of
its obligations under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares and except, in the case of clauses (ii) and (iii) above,
as would not have a material adverse effect on such Selling Shareholder.
(c) Such Selling Shareholder has, and on the Closing Date will have, valid
title to, or a valid "security entitlement" within the meaning of Section 8-501
of the New York Uniform
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Commercial Code in respect of, the Shares to be sold by such Selling Shareholder
free and clear of all security interests, claims, liens, equities or other
encumbrances and the legal right, capacity and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody Agreement
and the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder or a security entitlement in respect of such
Shares.
(d) The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by (or on behalf of, in the case of the
Custody Agreement,) such Selling Shareholder and are valid and binding
agreements of such Selling Shareholder.
(e) Upon payment for the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede & Co. ("CEDE") or such other nominee as may be designated
by the Depositary Trust Company ("DTC"), registration of such Shares in the name
of Cede or such other nominee and the crediting of such Shares on the books of
DTC to securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to such
Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim", within the meaning of Section
8-102 of the UCC, to such Shares may be asserted against the Underwriters with
respect to such security entitlement; for purposes of this representation, such
Selling Shareholder may assume that when such payment, delivery and crediting
occur, (x) such Shares will have been registered in the name of Cede or another
nominee designated by DTC, in each case on the Company's share registry in
accordance with its articles of incorporation, bylaws and applicable law, (y)
DTC will be registered as a "clearing corporation" within the meaning of Section
8-102 of the UCC and (z) appropriate entries to the accounts of the several
Underwriters on the records of DTC will have been made pursuant to the UCC.
(f) Such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 are not
true and correct, is familiar with the Registration Statement and Prospectus and
has no knowledge of any material fact, condition or information not disclosed in
the Prospectus that has had, or may have, a material adverse effect on the
Company and its subsidiaries, taken as a whole. Such Selling Shareholder is not
prompted by any information concerning the Company or its subsidiaries which is
not set forth in the Prospectus to sell its Shares pursuant to this Agreement.
(g) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, provided that the
representations and warranties set forth in this paragraph 3(g) are limited to
statements or omissions made in reliance upon
9
information relating to such Selling Shareholder expressly for use in the
Registration Statement, the Prospectus or any amendments or supplements thereto.
4. Agreements to Sell and Purchase. The Selling Shareholders hereby agree
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Selling Shareholders at $20.46 a share (the "PURCHASE PRICE") the number of Firm
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by the Selling Shareholders as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to 1,538,794 Additional Shares
at the Purchase Price. You may exercise this right, on behalf of the
Underwriters, in whole or from time to time in part by giving written notice not
later than 30 days after the date of this Agreement. Any exercise notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Each purchase date must be at
least one business day after the written notice is given and may not be earlier
than the closing date for the Firm Shares nor later than ten business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 6 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an "OPTION CLOSING DATE"), each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of
the Underwriters, it will not, during the period ending 180 days after the date
of the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise or (3) file any
registration statement with the Commission relating to the offering of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
The restrictions contained in the preceding paragraph shall not apply to
(a) the Shares to be sold hereunder, (b) the issuance by the Company of shares
of Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of
10
which the Underwriters have been advised in writing or has been described in the
Registration Statement or upon the grant of an option and/or issuance by the
Company of shares of Common Stock upon the exercise of an option to be issued
from time to time by the Company under the 2004 Stock Incentive Plan, as may be
amended from time to time, or a successor plan or (c) transactions by a Selling
Shareholder relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the offering of the Shares,
provided that no filing under Section 16(a) of the Exchange Act, shall be
required or shall be voluntarily made in connection with subsequent sales of
Common Stock or other securities acquired in such open market transactions, (d)
transfers by a Selling Shareholder of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift, (e) transfers by a Selling
Shareholder to an immediate family member or to a trust for the direct or
indirect benefit of the Selling Shareholder or an immediate family member, or
(f) distributions by a Selling Shareholder of shares of Common Stock or any
security convertible into Common Stock to limited partners or shareholders of
the Selling Shareholder; provided that in the case of any transfer or
distribution pursuant to clause (d), (e) or (f), (i) each donee, distributee or
transferee shall enter into a written agreement accepting the restrictions set
forth in the preceding paragraph and this paragraph as if it were a Selling
Shareholder and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made in respect of the transfer or
distribution during the 180-day restricted period. For purposes of this
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, each Selling
Shareholder agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Underwriters,
it will not, during the period ending 180 days after the date of the Prospectus,
make any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. Each Selling Shareholder consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of any Shares held by such Selling Shareholder except in
compliance with the foregoing restrictions. Notwithstanding the foregoing, if
(1) during the last 17 days of the 180-day restricted period the Company issues
an earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this agreement shall continue to apply until the expiration of the 18-day period
beginning on the date of issuance of the earnings release or the date of
occurrence of the material news or material event. The Company shall promptly
notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities Inc. of any
earnings release, news or event that may give rise to an extension of the
initial 180-day restricted period.
Each of the Company and the Selling Shareholders acknowledges that in
connection with the offering of the Shares and the discussions and negotiations
relating to the Shares set forth in this Agreement: (a) the Underwriters have
acted at arm's length, are not agents of or advisors to, and owe no fiduciary
duties to, the Company, the Selling Shareholders or any other person, (b) the
Underwriters owe the Company and the Selling Shareholders only those contractual
duties and obligations set forth in this Agreement and (c) the Underwriters may
have interests that differ from those of the Company and the Selling
Shareholders. Each of the Company and the
11
Selling Shareholders waive to the full extent permitted by applicable law any
claims it may have against the Underwriters arising from an alleged breach of
fiduciary duty in connection with the offering of the Shares.
5. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered directly to the public
initially at $22.00 a share (the "PUBLIC OFFERING PRICE") and part of the Shares
may be offered to certain dealers selected by you at a price that represents a
concession not in excess of $1.00 a share under the Public Offering Price.
6. Payment and Delivery. Payment for the Firm Shares shall be made to the
Custodian in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on August 8, 2005, or at such
other time on the same or at such other time on the same or such other date, not
later than August 15, 2005, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the corresponding
notice described in Section 4 or on such other date, in any event not later than
September 15, 2005, as shall be designated in writing by you.
The Firm Shares and Additional Shares shall be registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date:
12
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the securities of the
Company or any of its subsidiaries by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in Section 7(a)(i) above and to the effect that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, outside U.S. counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit B.
(d) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., outside South African counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit C.
(e) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇ & ▇▇▇▇▇, outside South African patent counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit D.
(f) The Underwriters shall have received on the Closing Date an opinion of
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, outside U.S. patent counsel for the Company,
dated the Closing Date, to the effect set forth in Exhibit E.
(g) The Underwriters shall have received on the Closing Date an opinion of
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, counsel for the Selling Shareholders, dated
the Closing Date, to the effect set forth in Exhibit F.
13
(h) The Underwriters shall have received on the Closing Date opinions of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Mauritius counsel for Brait International Limited, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, British Virgin Islands counsel for Brenthurst Private Equity II Limited
and Brenthurst Private Equity South Africa I Limited, Walkers, Cayman Islands
counsel for South African Private Equity Fund III LP (and its general partner,
SAPEF III International GP Limited), and Voisin & Co., Jersey counsel for the
joint trustees of the San ▇▇▇▇▇ Trust, dated the Closing Date, to the effect set
forth in Exhibit G.
(i) The Underwriters shall have received on the Closing Date an opinion of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the Closing Date, to
the effect set forth in Exhibit H.
The opinions of DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP, ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
and ▇▇▇▇▇ & ▇▇▇▇▇ described in Sections 7(c), 7(d), 7(e) and 7(f) above (and any
opinions of counsel for any Selling Shareholder referred to in the immediately
preceding paragraph) shall be rendered to the Underwriters at the request of the
Company or one or more of the Selling Shareholders, as the case may be, and
shall so state therein.
(j) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
Deloitte & Touche (South Africa), independent registered public accounting firm,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus; provided that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
(k) The Underwriters shall have received, on the date hereof, a letter
dated the date hereof in form and substance satisfactory to the Underwriters,
from PKF (JhB) Inc., independent auditors, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(l) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between the Underwriters and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to the
Underwriters on or before the date hereof, shall be in full force and effect on
the Closing Date.
(m) The Underwriters shall have received on, or prior to, the Closing Date
a properly completed and executed United States Treasury Department Form W-8IMY
or other applicable form or statement specified by Treasury Department
regulations from First National Asset Management and Trust Company, as trustee
of The New Aplitec Participation Trust.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to (i) the delivery to the Underwriters on the applicable
Option Closing Date of (i) such
14
documents as the Underwriters may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of the Additional Shares and (ii) the delivery on, or prior to, the
applicable Option Closing Date a properly completed and executed United States
Treasury Department Form W-9 or other applicable form or statement specified by
Treasury Department regulations from the Company.
8. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, 6 signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to the Underwriters in New York City, without charge,
prior to 10:00 a.m. New York City time on the business day next succeeding the
date of this Agreement or as soon thereafter as practicable and during the
period mentioned in Section 8(c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
15
9. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, (a) the Company
agrees to pay or cause to be paid all expenses incident to the performance of
their obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel, the Company's accountants and counsel for
the Selling Shareholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
8(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., provided, that the fees and
disbursements of such counsel in clauses (iii) and (iv) shall not exceed
$25,000, (v) all costs and expenses incident to listing the Shares on the Nasdaq
National Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (ix) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this section and
(b) except as provided in clause (a) above, each Selling Shareholder will bear
its own costs and expenses, including underwriting discounts and commissions
applicable to the Shares being sold by such Selling Shareholder and any transfer
or other taxes payable on the transfer and delivery of such Shares to the
Underwriters. It is understood, however, that except as provided in this
section, Section 10 entitled "Indemnity and Contribution" and the last paragraph
of Section 12 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
The provisions of this section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
10. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each
16
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus or any amendment or supplement thereto, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and, each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each affiliate of any
Underwriter within the meaning of Rule 405 under the Securities Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus or any amendment or supplement thereto, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only
with reference to information relating to such Selling Shareholder furnished in
writing by or on behalf of such Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 10(a), 10(b) or 10(c), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person
17
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act or who are
affiliates of any Underwriter within the meaning of Rule 405 under the
Securities Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Selling Shareholders and all persons, if any, who control any Selling
Shareholder within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons and affiliates of
any Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities Inc. In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the Selling Shareholders and such control
persons of any Selling Shareholders, such firm shall be designated in writing by
the persons named as attorneys-in-fact for the Selling Shareholders under the
Powers of Attorney. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
18
(e) To the extent the indemnification provided for in Section 10(a), 10(b)
or 10(c) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 10(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 10(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 10 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 10(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 10 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 10
and the representations, warranties and other statements of the Company and the
Selling Shareholders
19
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter, any person controlling any Underwriter or
any affiliate of any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder, or the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and payment for
any of the Shares.
11. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States or
South Africa shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State or South
African authorities or (v) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets, currency exchange rates or
controls or any calamity or crisis that, in the judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities Inc., is material and adverse and which,
singly or together with any other event specified in this clause (v), makes it,
in the judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇.▇. ▇▇▇▇▇▇ Securities
Inc., impracticable or inadvisable to proceed with the offer, sale or delivery
of the Shares on the terms and in the manner contemplated in the Prospectus.
12. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 12 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased on such date, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the
20
relevant Sellers shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, such Seller(s) will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
13. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16. Notices. All communications hereunder shall be in writing and
effective only upon receipt and if to the Underwriters shall be delivered,
mailed or sent to you at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Capital Markets Syndicate Desk and ▇.▇.
▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Equity Syndicate Desk; if to the Company shall be delivered, mailed or sent to
Net 1 UEPS Technologies, Inc., President Place, 4th floor, Cnr. ▇▇▇ ▇▇▇▇▇ Avenue
and ▇▇▇▇▇▇ Road, Rosebank, Johannesburg, South Africa, and if to the Selling
Shareholders shall be delivered, mailed or sent to the address set forth in
Schedule I.
[Remainder of page intentionally left blank]
21
Very truly yours,
NET 1 UEPS TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
The Selling Shareholders
named in Schedule I hereto, acting
severally
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Director
By: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
SCHEDULE I
Number of Firm
Selling Shareholder Address Shares To Be Sold
------------------- ---------------------------- -----------------
Dr. ▇▇▇▇▇ ▇.▇. Belamant c/o the Company(1) 150,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ c/o the Company(1) 150,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ c/o the Company(1) 150,000
Nitin Soma c/o the Company(1) 116,666
CI Law Trustees Limited for the San ▇▇▇▇▇ Trust c/o the Company(1) 43,473
Brenthurst Private Equity II Limited........................ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Islands 73,683
Brenthurst Private Equity South Africa I Limited............ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
British Virgin Islands 40,191
South African Private Equity Fund III, L.P. ................ P.O. Box 908, ▇▇▇▇▇▇ Town,
Grand Cayman, Cayman Islands 580,498
Brait International Limited................................. Suite 305, Third Floor,
Caudan Waterfront, Port
Louis, Mauritius 33,492
Optionholders selling an aggregate of 178,529 shares, a c/o the Company(1) 178,529
schedule of which (including the names of each
optionholder and the number of
----------
(1) The Company's address is: President Place, 4th Floor, Cnr. ▇▇▇ ▇▇▇▇▇
Avenue and ▇▇▇▇▇▇ Road, Rosebank, Johannesburg, South Africa.
Shares to be sold by such holder) has
previously been delivered to the Underwriters(1)
---------
Total.................................................. 1,516,532
=========
----------
(continued...)
(1) Each optionholder listed in such schedule is deemed named in this
Schedule I and each such holder is therefore a Selling Shareholders.
SCHEDULE II
Number of Firm Shares
to be purchased from
Selling Shareholders
and shares to be
purchased from certain
Underwriter unitholders
----------- ----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................................... 4,616,380
▇.▇. ▇▇▇▇▇▇ Securities Inc.......................................... 4,616,380
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC.......................................... 341,955
▇▇▇▇▇▇▇▇▇ & Company, Inc............................................ 341,955
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated.................................. 341,955
----------
Total.......................................................... 10,258,625
==========
EXHIBIT A
August 8, 2005
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
and
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMORGAN") propose to enter
into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with Net 1 UEPS
Technologies, Inc., a Florida corporation (the "COMPANY"), providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and JPMorgan (the "UNDERWRITERS"), of 10,258,625 shares (the
"SHARES") of the common stock, par value $0.001 per Share of the Company (the
"COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
JPMorgan on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in
A-1
cash or otherwise. The foregoing sentence shall not apply to (a) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, provided that no
filing under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") shall be required or shall be voluntarily made in
connection with subsequent sales of Common Stock or other securities acquired in
such open market transactions, (b) transfers of shares of Common Stock or any
security convertible into Common Stock as a bona fide gift, (c) transfers to an
immediate family member or to a trust for the direct or indirect benefit of the
undersigned or an immediate family member or (d) distributions of shares of
Common Stock or any security convertible into Common Stock to limited partners
or shareholders of the undersigned; provided that in the case of any transfer or
distribution pursuant to clause (b), (c) or (d), (i) each donee, distributee or
transferee shall sign and deliver a lock-up letter substantially in the form of
this letter and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made during the restricted period referred
to in the foregoing sentence. For purposes of this Agreement, "immediate family"
shall mean any relationship by blood, marriage or adoption, not more remote than
first cousin. In addition, the undersigned agrees that, without the prior
written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and JPMorgan on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 180 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's shares of Common Stock except in compliance with the foregoing
restrictions.
If:
(1) during the last 17 days of the 180-day restricted period the Company
issues an earnings release or material news or a material event relating to the
Company occurs; or
(2) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period;
the restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the date of issuance of the
earnings release or the date of occurrence of the material news or material
event.
A-2
The undersigned shall not engage in any transaction that may be restricted
by this agreement during the 34-day period beginning on the last day of the
initial 180-day restricted period unless the undersigned requests and receives
prior written confirmation from the Company or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and JPMorgan that
the restrictions imposed by this agreement have expired.
The undersigned understands that the Company and the Underwriters are
relying upon this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This Agreement shall automatically terminate and be of no further force or
effect upon the earlier of (i) the Underwriting Agreement not being executed by
October 6, 2005 and (ii) either the Company or the Underwriters notifying the
other in writing that they are abandoning the Public Offering. The undersigned
understands that if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares to be sold thereunder, the undersigned
shall be released from all obligations under this Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of laws principles
thereof.
Very truly yours,
___________________________________
(Name)
___________________________________
(Address)
A-3
EXHIBIT B
FORM OF OPINION OF DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP
1. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in the United
States in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole;
2. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus;
3. The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares that may
be sold by the Company have been duly authorized and are validly issued, fully
paid and non-assessable;
4. The Shares that may be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights;
5. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
6. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of (i) the certificate of incorporation or by-laws of the Company, or,
(ii) to the best of such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries or, (iii) to the best of
such counsel's knowledge, any applicable Florida or U.S. federal law, judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under the Underwriting
Agreement, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the
B-1
Shares and except, in the case of clauses (ii) and (iii) above, as would not
have a material adverse effect on the Company and its subsidiaries taken as a
whole;
7. The statements relating to legal matters, documents or proceedings
included in (A) the Prospectus under the captions "Description of Capital Stock"
and (B) the Registration Statement in Items 14 and 15, in each case fairly
summarize in all material respects such matters, documents or proceedings;
8. The statements in the Prospectus under the caption "Material U.S.
Federal Tax Consequences for Non-U.S. Holders of Common Stock" accurately
summarize in all material respects the United States federal income tax laws
referred to therein;
9. After due inquiry we do not know of any Florida or U.S. federal legal
or governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
10. The Company is not, and after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended; and
In our opinion, the Registration Statement and the Prospectus appear on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder (other than the financial statements and other
financial information contained therein as to which we need express no opinion).
Further, based upon our participation in the preparation of the Registration
Statement, nothing has come to our attention that causes us to believe that, on
the effective date of the Registration Statement or the date the Registration
Statement was last deemed amended, the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date and on the Closing Date,
included or includes any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading (in each case,
other than the financial statements and other financial information contained
therein, as to which we need express no opinion).
B-2
In rendering the opinion set forth in paragraphs 1 - 10 above, we may rely
(A) as to matters involving the application of laws of any jurisdiction other
than the State of Florida, the State of New York or the federal laws of the
United States, to the extent we deem proper and as specified in our opinion,
upon the opinion of other counsel of good standing whom we believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent we deem proper, on certificates of responsible
officers of the Company and public officials.
B-3
EXHIBIT C
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇, INC
Based upon the information provided by the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc
confirms that:
1. Each subsidiary or related entity of the Company set forth in Schedule
A hereto (each, a "Subsidiary") has been duly incorporated or, in the case of
The New Aplitec Participation Trust, established as a bewind trust, validly
existing under the laws of South Africa and has all requisite corporate or trust
power and authority to own, lease and operate its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
2. All of the issued shares of each Subsidiary have been duly and validly
authorised and issued, are fully paid and based upon the information provided by
the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc confirms that such shares are owned by the
Company in the percentages indicated in Schedule A, free and clear of all liens,
encumbrances, equities or claims, save as set out in Schedule A.
3. The statements made in the Prospectus under the caption "Enforceability
of Civil Liabilities", insofar as they purport to constitute summaries of South
African legal matters, constitute accurate summaries of such matters.
4. The statements made in the Prospectus under the caption "Risk Factors -
There are risks relating to operating in South Africa that could adversely
affect our business, operating results, cash flows and financial condition",
"Risk Factors - Our ability to operate our wage payment and insurance products
businesses may be limited by existing South African banking and financial
services laws and regulations", "Risk Factors - We may be subject to privacy
laws in South Africa and other jurisdictions in which we operate", "Risk Factors
- You may have difficulty enforcing a U.S. judgment against us, our executive
officers and directors and some of the experts named in this prospectus or
asserting U.S. securities laws claims in South Africa", "Dividend Policy" and
"Government Regulation" and all others with South African legal content, insofar
as they purport to constitute summaries of certain provisions of provincial or
South
C-1
African law or rules and regulations thereunder, constitute accurate summaries
of such provisions in all material respects.
C-2
SCHEDULE A
Net 1 Applied Technologies South Africa Limited (100% A Ordinary Shares)
Cash Paymaster Services (Pty) Limited (100%) **
Cash Paymaster Services (Eastern Cape) (Pty) Limited (100%)
Cash Paymaster Services (Northern) (Pty) Limited (100%) *
Cash Paymaster Services (KwaZulu Natal) (Pty) Limited (100%) *
Cash Paymaster Services (Northern Cape) (Pty) Limited (100%) *
Cash Paymaster Services (North West) (Pty) Limited (70%) *
Net 1 Finance Holdings (Pty) Limited (100%)
Net 1 Southern Africa (Pty) Limited (100%)
Country-on-a-Card (Pty) Limited (100%)
Net 1 Solutions (Pty) Limited (100%)
Sinqobile Security Services Gauteng (Pty) Ltd (100%)
Siyeza Security Services (Pty) Limited (100%)
Moneyline Financial Services (Pty) Limited (100%)
Permit Group 2 (Pty) Limited (43.16%) - share certificate not yet issued
New World Finance (Pty) Limited (100%)
*The statutory Return of Allotment of Shares for the issue of certain shares has
been lodged with the Registrar. Registration is awaited. This does not affect
the issue. The issue of certain shares has been ratified by the board of the
companies post-issue.
**These shares are pledged to Nedbank Limited as security for the R250,000,000
facility granted to Cash Paymaster Services (KwaZulu Natal) (Pty) Limited.
This list does not include all dormant subsidiaries.
C-3
EXHIBIT D
FORM OF OPINION OF ▇▇▇▇▇ AND ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as South African patent counsel to Net 1 UEPS Technologies
Inc., a Florida corporation (together with its subsidiaries, referred to as the
"COMPANY"), in connection with an assessment of its intellectual property
matters, including South African Patent 90/7106, Botswanan Patent P810, Namibian
Patent 92/0091 and Swazi Patent RP/45/1992 (the "PATENTS"). This opinion is
being furnished to you at the request of the Company pursuant to Section 7(e) of
the Underwriting Agreement, dated August 2, 2005, between you and the Company,
relating to the sale of certain registered shares of common stock of the Company
(the "UNDERWRITING AGREEMENT").
We have read the Prospectus prepared by the Company in connection with the
transactions contemplated by the Underwriting Agreement (the "PROSPECTUS") and
in particular we have read the sections referring to the patents, copyrights and
trademarks (the "INTELLECTUAL PROPERTY") that the Company has the right to own
or possess ("INTELLECTUAL PROPERTY RIGHTS") or that is licensed or held for use
by the Company.
D-1
Based upon the foregoing, and subject to what is said in the Prospectus
and subject to the information and documents given to us by the Company, we are
of the opinion that:
(a) The statements relating to South African, European, Botswanan,
Namibian and Swaziland legal matters, documents or proceedings included in the
Offering Memorandum under the captions "Risk Factors - Patent competition may
adversely affect our products or processes, and limited patent protection, a
lack of proprietary protection and the potential to incur costly litigation
could be harmful to our operations", "Risk Factors - The copyrights and certain
related intellectual property rights in earlier versions of our UEPS software
are jointly owned and potentially subject to non-exclusive rights, which may
reduce our future revenues", "Risk Factors - Our current license agreement with
Visa imposes long-term restrictions on our ability to license rights in our
technology and could inhibit our ability to realize additional revenue from
these rights in our technology", "Risk Factors - Our license agreement with Visa
substantially impacts our ability to defend and enforce our patents licensed to
Visa and could substantially inhibit our ability to protect the rights in our
technology", "Business - Our Technology - System Components - FTS Patent",
"Business - Intellectual Property" and "Certain Relationships and Related Party
Transactions - Nedbank" are accurate and complete and in each case fairly
summarize such matters, documents or proceedings.
(b) (i) The South African patent is recorded in the name of the Company in
the South African Patent Office and applications to record the other patents in
the respective patent offices have been lodged, and the Patents are owned free
and clear of all liens, encumbrances, defects or other restrictions, except for
the licence granted to First National Bank Limited and the rights and
restrictions included in the following agreements;
(A) The Agreement by and between Nedcor Bank Limited and Net 1
Products (Proprietary) Limited, dated July 29, 1997;
(B) The Agreement by and between Nedcor Bank Limited, Net 1 Products
(Proprietary) Limited, S C P Belamant, A P Mansvelt and Net 1 Investment
Holdings (Proprietary) Limited, dated July 29, 1997;
(C) The Technology License Agreement by and between Net 1 Holdings
S. a. r. l. and Net 1 Investment Holdings (Pty) Limited and Visa
International Service Association, dated July 31, 1997; and
(D) The Patent and Technology Agreement by and between Net 1
Investment Holdings (Proprietary) Limited, Net 1 Applied Technology
Holdings Limited and Nedcor Bank Limited, dated July 29, 1997;
D-2
(ii) All the Patents have been duly maintained, are in full force and
effect in their respective countries, and none of the patents have been adjudged
invalid or unenforceable in whole or in part;
(c) (i) There are no on-going infringements by others of the Intellectual
Property Rights of the Company;
(ii) The Company has not received any notice of, and is not aware of, any
actionable infringement by others of any Intellectual Property Rights of the
Company;
(iii) To the extent necessary the Company has complied with any applicable
laws and regulations which relate to the enforceability of the Intellectual
Property Rights;
(iv) The present operation of the business of the Company, as described in
the Prospectus, including the development, use and sale of their products, does
not infringe any valid patent or otherwise conflict with, misappropriate or
violate the rights of others with respect to Intellectual Property Rights and
the Company is not aware of, and has not received any notices of, any possible
infringement or conflict with the rights of others with respect to any
Intellectual Property Rights;
(v) There are no South African, European, Botswana, Namibian or Swazi
legal or governmental proceedings, other than prosecution of pending trademark
applications, relating to Intellectual Property Rights to which the Company is a
party or of which any Intellectual Property of the Company is subject and, to
the best of our knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others; and
(vi) Subject to what is disclosed in the Prospectus with respect to the
agreements referred to above, the Company has not received any notice of, and is
not aware of, the granting of any Intellectual Property Rights to third parties,
or the filing, of any patent applications by third parties, that would have a
material adverse effect on the present operations of the Company.
The above opinions are subject to the following qualifications:
a. We have assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or copies, and the authenticity of the originals of such latter
documents.
D-3
b. We opine in this letter as South African patent attorneys. All
statements are made to the best of our knowledge and refer to the actual
knowledge of the pertinent facts possessed by the attorney in this firm who has
signed this opinion letter.
c. This opinion and advice speaks only as of the date hereof, and we do
not have, nor do we assume, any obligation to advise you of any changes in any
facts or applicable laws after the date hereof which may affect our opinion. We
make no other express or implied representations or warranties other than those
set forth herein.
This opinion is rendered only to you and is solely for your benefit.
Specifically, this opinion is not to be relied upon in support of a defense of
patent invalidity, unenforceability or non-infringement. This opinion is not to
be quoted in whole or in part, or otherwise referred to (except in the
Underwriting Agreement for the Company and its Subsidiaries) nor is it to be
filed with any governmental agency (except as required by law), nor to be relied
upon by you for any purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Very truly yours,
D-4
EXHIBIT E
FORM OF OPINION OF U.S. INTELLECTUAL PROPERTY COUNSEL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as United States intellectual property counsel to Net 1 UEPS
Technologies Inc., a Florida corporation (together with its subsidiaries,
referred to as the "COMPANY"), in connection with intellectual property matters
related to the prospectus prepared by the Company in connection with the
transactions contemplated by the Underwriting Agreement (the "PROSPECTUS"). This
opinion is being furnished to you at the request of the Company pursuant to
Section 7(f) of the Underwriting Agreement, dated August 2, 2005, between you
and the Company, relating to the sale of certain registered shares of common
stock of the Company (the "UNDERWRITING AGREEMENT").
We have read the Prospectus and in particular we have read the sections
referring to the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems, procedures or materials),
trademarks, service marks and trade names (the "INTELLECTUAL PROPERTY") that the
Company has the right to own or possess ("INTELLECTUAL PROPERTY RIGHTS") or that
is licensed or held for use by the Company.
E-1
Any capitalized term used in this letter and not otherwise defined in this
letter shall have the same meaning as that given to such term in the
Underwriting Agreement.
Based upon the foregoing, we are of the opinion that:
(a) The statements relating to United States legal matters, documents or
proceedings included in the Offering Memorandum under the captions "Risk Factors
- Patent competition may adversely affect our products or processes, and limited
patent protection and a lack of proprietary protection and the potential to
incur costly litigation could be harmful to our operations", "Risk Factors - The
copyrights and certain related intellectual property rights in earlier versions
of our UEPS software are jointly owned and potentially subject to non-exclusive
rights, which may reduce our future revenues", "Risk Factors - Our current
license agreement with Visa imposes long-term restrictions on our ability to
license rights in our technology and could inhibit our ability to realize
additional revenue from these rights in our technology", "Risk Factors - Our
license agreement with Visa substantially impacts our ability to defend and
enforce our patents licensed to Visa and could substantially inhibit our ability
to protect the rights in our technology", "Business - Our Technology - System
Components - FTS Patent", "Business - Intellectual Property" and "Certain
Relationships and Related Party Transactions - Nedbank" are, to the best of our
knowledge, accurate and complete in all material respects and in each case
fairly summarize such matters, documents or proceedings.
(b) (i) U.S. Patent No. RE36,788, a reissue of U.S. Patent No.
5,171,416, is recorded in the name of Net 1 Holdings S.a.r.l. in the
U.S. Patent and Trademark Office. To the best of our knowledge, U.S.
Patent No. RE36,788 is owned free and clear of all liens,
encumbrances or defects, except for the rights and restrictions
included in the following agreements:
(A) The Technology License Agreement by and between Net 1
Holdings S.a.r.l. and Net 1 Investment Holdings (Pty) Limited
and Visa International Service Association, dated July 31,
1997; and
(B) The Patent and Technology Agreement by and between Net 1
Holdings S.a.r.l. and Net 1 Applied Technology Holdings
Limited and Nedcor Bank Limited, dated July 29, 1997.
E-2
(ii) To the best of our knowledge, U.S. Patent No. RE36,788 has been
duly maintained, is in full force and effect, and has not been
adjudged invalid or unenforceable in whole or in part.
(c) (i) To the best of our knowledge, and based on a certificate
provided to us from a duly authorized officer of the Company, there
are no on-going infringements by others of the Intellectual Property
Rights of the Company and the Company has not received any written
notice of, and is not otherwise aware of, any likely actionable
infringement by others of any Intellectual Property Rights of the
Company;
(ii) To the best of our knowledge, and based on a certificate
provided to us from a duly authorized officer of the Company, the
operation and business of the Company, as described in the
Prospectus, including the development, use and sale of their
products, together with the use of the Company's Intellectual
Property, does not infringe any valid patent or otherwise conflict
with, misappropriate or violate the rights of others with respect to
Intellectual Property Rights and the Company has not received any
written notices of, and is not otherwise aware of, any likely
infringement or conflict with the rights of others with respect to
any Intellectual Property Rights;
(iii) To the best of our knowledge, and based on a certificate
provided to us from a duly authorized officer of the Company, there
are no United States legal or governmental proceedings relating to
Intellectual Property Rights to which the Company is a party or of
which any Intellectual Property of the Company is subject and no
such proceedings are threatened or contemplated by governmental
authorities or others; and
(iv) To the best of our knowledge, and based on a certificate
provided to us from a duly authorized officer of the Company, the
Company has not received any notice of, and is not aware of, the
granting of any Intellectual Property Rights to third parties, or
the filing of any patent applications by third parties in each case
that would have a material adverse effect on the Company, except as
disclosed in the Prospectus with respect to the following
agreements:
(A) The Technology License Agreement by and between Net 1
Holdings S.a.r.l. and Net 1 Investment Holdings (Pty)
E-3
Limited and Visa International Service Association, dated July
31, 1997;
(B) The Agreement between Nedcor Bank Limited and Net 1
Products (Proprietary) Limited, dated July 29, 1997;
(C) The Patent and Technology Agreement by and between Net 1
Holdings S.a.r.l. and Net 1 Applied Technology Holdings
Limited and Nedcor Bank Limited, dated July 11, 2000; and
(D) The Patent and Technology Agreement by and between Net 1
Investment Holdings (Proprietary) Limited and Net 1 Applied
Technology Holdings Limited and Nedcor Bank Limited, dated
July 11, 2000.
Very truly yours,
E-4
EXHIBIT F
FORM OF SELLING SHAREHOLDER OPINION OF
DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ US LLP
1. Assuming the due authorization, execution and delivery of the Powers of
Attorney signed by each of the Selling Shareholders, each of the Underwriting
Agreement and the Custody Agreement has been duly executed and delivered by the
Attorneys-in-Fact on behalf of each of the Selling Shareholders.
2. Upon payment for the Shares to be sold (i) by the Selling Shareholders
pursuant to this Agreement and (ii) on behalf of certain holders of units in The
New Aplitec Participation Trust pursuant to the irrevocable election forms
previously executed by such holders, delivery of such Shares, as directed by the
Underwriters, to Cede or such other nominee as may be designated by DTC,
registration of such Shares in the name of Cede or such other nominee and the
crediting of such Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has notice of
any adverse claim within the meaning of Section 8-105 of the UCC to such
Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim" (within the meaning of Section
8-102 of the UCC) to such Shares may be asserted against the Underwriters with
respect to such security entitlement; in giving this opinion, counsel for the
Selling Shareholders may assume that when such payment, delivery and crediting
occur, (x) such Shares will have been registered in the name of Cede or another
nominee designated by DTC, in each case on the Company's share registry in
accordance with its articles of incorporation, bylaws and applicable law, (y)
DTC will be registered as a "clearing corporation" within the meaning of Section
8-102 of the UCC and (z) appropriate entries to the accounts of the several
Underwriters on the records of DTC will have been made pursuant to the UCC.
F-1
EXHIBIT G
FORM OF SELLING SHAREHOLDER OPINION OF COUNSEL OF
JURISDICTION OF INCORPORATION
1. Each of the Selling Shareholders has the legal right, capacity and
power, and all authorization and approval required by law, to enter into this
Agreement and the Custody Agreement and Power of Attorney of such Selling
Shareholder and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder or a security entitlement in respect of such shares.
2. [The Underwriting Agreement has been duly authorized by each of the
Selling Shareholders.]*
3. The execution and delivery by or on behalf of, as the case may be, each
Selling Shareholder of, and the performance by or on behalf of, as the case may
be, such Selling Shareholder of its obligations under, the Underwriting
Agreement and the Custody Agreement and Powers of Attorney of such Selling
Shareholder will not contravene any provision of [(i) the certificate of
incorporation, by-laws or similar organizational documents of such Selling
Shareholder, as applicable,]* or, (ii) to the best of such counsel's knowledge,
any agreement or other instrument binding upon such Selling Shareholder or,
(iii) to the best of such counsel's knowledge, any applicable law, judgment,
order or decree of any governmental body, agency or court having jurisdiction
over such Selling Shareholder, and, to such Counsel's knowledge, no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by or on behalf of, as the case
may be, such Selling Shareholder of its obligations under this Agreement or the
Custody Agreement or Power of Attorney of such Selling Shareholder, except in
the case of clauses (ii) and (iii) above, as would not have a material adverse
effect on such Selling Shareholder.
4. The Power of Attorney of each Selling Shareholder has been duly
[authorized,]* executed and delivered by such Selling Shareholder and is a valid
and binding agreement of such Selling Shareholder.
--------------
* To be deleted in the case that the Selling Shareholder is a natural
person.
G-1
EXHIBIT H
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
August 8, 2005
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
c/o
Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for you and the other several underwriters (the
"Underwriters") named in Schedule II to the Underwriting Agreement dated August
2, 2005 (the "Underwriting Agreement") with Net 1 UEPS Technologies, Inc., a
Florida corporation (the "Company"), under which you and such other Underwriters
have severally agreed to purchase from certain shareholders of the Company named
in Schedule I to the Underwriting Agreement an aggregate of 1,516,532 shares
(the "Firm Shares") of common stock of the Company, par value $0.001 per share
("Common Stock"). In addition, the Underwriters have an option to purchase an
additional 1,538,794 shares of Common Stock from the Company, par value $0.001
per share (the "Additional Shares" and together with the Firm Shares, the
"Shares").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion.
We have also participated in the preparation of the Company's registration
statement on Form S-1 (File No. 333-125273) and Amendments Nos. 1 through 4
thereto filed with the Securities and Exchange Commission (the "Commission")
H-1
pursuant to the provisions of the Securities Act of 1933, as amended (the
"Act"), relating to the Shares. In addition, we have been advised by the staff
of the Commission that the registration statement as so amended was declared
effective under the Act on August 2, 2005. The registration statement as amended
at the time it was declared effective, including the information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A under the Act,
is hereinafter referred to as the "Registration Statement", and the related
prospectus in the form first used to confirm sales of the Shares is hereinafter
referred to as the "Prospectus."
We have assumed the conformity of the documents filed with the Commission
via the Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇"),
except for required ▇▇▇▇▇ formatting changes, to physical copies of the
documents delivered to the Underwriters and submitted for our examination.
We have considered the statements included in the Prospectus under the
captions "Underwriters" insofar as they purport to summarize certain provisions
of the Underwriting Agreement. In our opinion, such statements fairly summarize
these provisions in all material respects.
We have not ourselves checked the accuracy, completeness or fairness of,
or otherwise verified, the information furnished with respect to other matters
in the Registration Statement or the Prospectus. We have generally reviewed and
discussed with your representatives and with certain officers and employees of,
and counsel and independent public accountants for, the Company the information
furnished, whether or not subject to our check and verification. On the basis of
such consideration, review and discussion, but without independent check or
verification except as stated above, (i) in our opinion, the Registration
Statement and the Prospectus appear on their face to be appropriately responsive
in all material respects to the requirements of the Act and the applicable rules
and regulations of the Commission thereunder, and (ii) nothing has come to our
attention that causes us to believe that (a) the Registration Statement or the
prospectus included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or (b) the Prospectus as of its date or as of
the date hereof contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. In expressing the foregoing opinion and belief, we have
not been called to pass upon, and we express no opinion or belief as to, the
financial statements or financial schedules or other financial or statistical
data included in the Registration Statement or the Prospectus.
H-2
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America.
This opinion is rendered solely to you and the other several Underwriters
in connection with the Underwriting Agreement. This opinion may not be relied
upon by you for any other purpose or relied upon by any other person (including
any person acquiring Shares from the several Underwriters) or furnished to any
other person without our prior written consent.
Very truly yours,
H-3