Item 1.01 Entry Into a Material Definitive Agreement.
Third Amendment and Restatement Agreement
On September 4, 2019, Net 1 UEPS Technologies, Inc. ("Net1"), through one of its subsidiaries, Net1 Applied Technologies South Africa Proprietary Limited ("Net1 SA"), entered into a Third Amendment & Restatement Agreement, which includes an Amended and Restated Common Terms Agreement, and a Senior Facility F Agreement (collectively, the "Loan Documents") with FirstRand Bank Limited (acting through its Rand Merchant Bank division) ("RMB"), a South African corporate and investment bank, Nedbank Limited (acting through its Corporate and Investment Banking division) ("Nedbank" and together with RMB, the "Lenders"), an African corporate and investment bank, and Main Street 1692 (RF) Proprietary Limited ("Debt Guarantor"), a South African company incorporated for the sole purpose of holding collateral for the benefit of the Lenders and acting as debt guarantor, and certain other parties. Net1 agreed to guarantee the obligations of Net1 SA to the Lenders.
The Loan Documents contain customary covenants that require Net1 SA to maintain a specified total asset cover ratio and restrict the ability of Net1 SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities. Net1 also agreed that in the event of any sale of KSNET, Inc., it would deposit a portion of the proceeds in an amount of the USD equivalent of the Facility F loan and the Nedbank general banking facility commitment into a bank account secured in favor of the Debt Guarantor.
Senior Facility F Agreement
Pursuant to the Senior Facility F Agreement, Net1 SA may borrow up to an aggregate of ZAR 300 million ("Facility F") for the sole purposes of funding the acquisition of airtime from Cell C Propriety Limited. Net1 SA may not dispose of the airtime acquired from Cell C prior to April 1, 2020, without the prior consent of RMB, Absa Bank Limited and Investec Asset Management Proprietary Limited. Facility F comprises (i) a first Senior Facility F loan of ZAR 220 million (ii) a second Senior Facility F loan of ZAR 80 million, or such lesser amount as may be agreed by the facility agent.
Facility F is required to be repaid in full nine month following the first utilization of the facility. Net1 SA is required to prepay Facility F subject to customary prepayment terms.
Interest on Facility F is payable quarterly in arrears based on the Johannesburg Interbank Agreed Rate ("JIBAR") in effect from time to time plus a margin of 5.50% per annum. The margin on the Facility F will increase by 1% per annum if Net1 SA has not disposed of certain assets by October 31, 2019, and will increase by a further 1% if Net1 SA has not disposed of its shareholding in DNI-4PL Proprietary Limited by January 31, 2020. The JIBAR rate was 6.81% on September 4, 2019. Net1 SA paid a non-refundable structuring fee of ZAR 2.2 million to the Lenders in September 2019.
Pledge and Cession Agreement
Concurrent with the execution of the Loan Documents, Net1 SA also entered into a pledge and cession agreement ("Pledge and Cession Agreement") with the Debt Guarantor pursuant to which, among other things, Net1 SA agreed to cede its shareholdings in Cell C, DNI and FIHRST to the Debt Guarantor.
Senior Facility E Agreement
Concurrent with the execution of the Loan Documents, Net1 SA and RMB entered into an Amendment & Restatement Agreement ("Facility E Amendment Agreement") with RMB to reduce its Senior Facility E from ZAR 1.5 billion to ZAR 1.2 billion.
On September 4, 2019, the USD/ZAR exchange rate was $1.00 / ZAR 14.91.
The foregoing description of the Loan Documents, the Pledge and Cession Agreement and the Facility E Amendment Agreement do not purport to be complete and are qualified in their entirety by reference to the full text thereof, copies of which are attached hereto as Exhibits 10.102 through 10.105 and are incorporated herein by reference.