--------------------------------------------------------------------------------

Exhibit 10.44

 

 

 

CESSION AND PLEDGE IN SECURITY

 

 

Between

 

 

NET1 UEPS TECHNOLOGIES, INC.

 

 

and

 

 

INVESTEC BANK (UK) LIMITED

[drlogo.gif]

--------------------------------------------------------------------------------

TABLE OF CONTENTS

1. PARTIES 3       2. DEFINITIONS AND INTERPRETATION 3       3. INTRODUCTION 10
      4. CESSION AND PLEDGE 10       5. WARRANTIES, REPRESENTATIONS AND
UNDERTAKINGS BY THE PARENT 10       6. DELIVERY OF DOCUMENTS 13       7. RIGHTS,
POWERS AND PRIVILEGES ATTACHING TO THE PLEDGED SHARES AND THE RIGHTS AND
INTERESTS 15       8. REALISATION 16       9. APPROPRIATION OF PROCEEDS 19      
10. AUTHORITY 20       11. DURATION 21       12. ADDITIONAL SECURITY 21      
13. CESSION 21       14. PARENT BOUND NOTWITHSTANDING CERTAIN CIRCUMSTANCES 21  
    15. SHARES AND RIGHTS AND INTERESTS TO BE KEPT FREE OF ENCUMBRANCES 22      
16. EXEMPTION FROM LIABILITY 23       17. CERTIFICATE OF INDEBTEDNESS 23      
18. RENUNCIATION OF BENEFITS 23       19. NOTICES AND DOMICILIA 24       20.
GOVERNING LAW 26       21. JURISDICTION 26       22. SEVERABILITY 26

--------------------------------------------------------------------------------

Page 2.

23. GENERAL 27       24. COSTS 28       25. COUNTERPARTS 28       SCHEDULE 1:
FORM OF NOTICE AND ACKNOWLEDGEMENT TO NET1 SA  

--------------------------------------------------------------------------------

CESSION AND PLEDGE IN SECURITY

1.

PARTIES

1.1

The Parties to this Agreement are:

1.1.1

NET1 UEPS TECHNOLOGIES, INC.; and

    1.1.2

INVESTEC BANK (UK) LIMITED.

1.2

The Parties agree as set out below.

2.

DEFINITIONS AND INTERPRETATION

2.1

The headings to the clauses and schedule of this Agreement are for reference
purposes only and shall in no way govern or affect the interpretation of nor
modify nor amplify the terms of this Agreement nor any clause or schedule
hereof.

    2.2

Unless inconsistent with the context the words and expressions set forth below
shall bear the following meanings and cognate expressions shall bear
corresponding meanings:

2.2.1

“Additional Net1 South Africa Shares” means, in addition to the Initial Net1
South Africa Shares, all shares in the issued share capital of Net1 South
Africa, from time to time, which are issued to or held by the Parent from time
to time and including but not limited to any such shares which may be issued or
transferred to the Parent in the future, together with all dividends, rights to
dividend and voting rights which accrue and attach to such shares;

--------------------------------------------------------------------------------

Page 4.

2.2.2

“Agreement” means this Cession and Pledge in Security and its Schedules;

    2.2.3

“Articles of Association” means the articles of association of Net1 South
Africa;

    2.2.4

“Borrower” means the Smartswitch Netherlands C.V. (Registration No. 24439756), a
limited partnership duly established according to the laws of the Netherlands;

    2.2.5

“Claims” means all current and future claims (including, but not limited to all
or any shareholder loans) which the Parent has or will have against Net1 South
Africa on any account whatsoever, together with the benefit of any security
interest for the time being held by the Parent in respect of such claims;

    2.2.6

“Documents of Title” means the share certificates and other documents of title
referred to in clause 6.1;

    2.2.7

“Encumbrance” means any mortgage, pledge, lien, assignment or cession conferring
security, hypothecation, security interest, preferential right or trust
arrangement or any other agreement or arrangement, the effect of which is the
creation of security;

    2.2.8

“Facility Agreement” means the Facility Agreement dated 27 August 2008 between
the Borrower, Net1 Netherlands and the Lender pursuant to which the Lender
agrees to advance a loan of US$110 000 000 (One Hundred and Ten Million United
States Dollars) to the Borrower;

--------------------------------------------------------------------------------

Page 5.

2.2.9

“Guarantee” means Deed of Guarantee dated 27 August 2008 between the Parent and
the Lender pursuant to which the Parent guarantees to the Lender punctual
performance by each Obligor of all moneys, obligations and liabilities owed or
payable by the Obligors to the Lender under or in connection with the Facility
Agreement or any Finance Document;

    2.2.10

“Indebtedness” shall be widely construed so as to include any obligation
(whether incurred as principal or surety) for the payment or repayment of money,
whether present or future, actual or contingent;

    2.2.11

“Initial Net1 South Africa Shares” means, collectively:

2.2.11.1

170 647 911 (one hundred and seventy million six hundred and forty-seven
thousand nine hundred and eleven) class “A” ordinary shares of R0,01 (one cent)
each in the issued share capital of Net1 South Africa constituting 100% (one
hundred percent) of the entire issued ordinary share capital of Net1 South
Africa as at the Signature Date;

   

2.2.11.2

201 001 369 (two hundred and one million and one thousand and thirty-six) class
“B” preference shares of R0,001 (one tenth of a cent) each in the issued share
capital of Net1 South Africa constituting 84.4% (eight-four comma four percent)
of the entire issued class “B” preference shares in Net1 South Africa as at the
Signature Date,

in each case, together with all dividends, rights to dividend and voting rights
which accrue and attach to such shares;

--------------------------------------------------------------------------------

Page 6.

2.2.12

“Lender” means Investec Bank (UK) Limited, a public company and registered bank
duly incorporated according to the company and banking laws of the United
Kingdom, and its successors in title, permitted assigns and transferees in
accordance with the terms of the Facility Agreement;

    2.2.13

“Net1 Netherlands” means Net1 Applied Technologies Netherlands B.V.
(Registration No. 34307123), a company duly incorporated according to the
company laws of the Netherlands;

    2.2.14

“Net1 South Africa” means Net1 Applied Technologies South Africa Limited
(Registration No. 2002/031446/06), a public company duly incorporated according
to the company laws of South Africa;

    2.2.15

“Obligors” shall bear the meaning defined in the Facility Agreement;

    2.2.16

“Parent” means Net1 UEPS Technologies, Inc. (Registration No. P97000041098), a
corporation incorporated under the laws of Florida, United States of America;

    2.2.17

“Parties” means the Parent and the Lender and “Party” means, as the context
requires, either one of them;

    2.2.18

“Pledged Shares” means collectively:

2.2.18.1

the Additional Net1 South Africa Shares; and

    2.2.18.2

the Initial Net1 South Africa Shares;

2.2.19

“Rights and Interests” means all of the Parent’s rights of any nature whatsoever
to and interests of any nature whatsoever in the Pledged

--------------------------------------------------------------------------------

Page 7.

Shares and the Claims, whether actual, prospective or contingent, direct or
indirect, whether a claim to the payment of money or to the performance of any
other obligation, and whether or not the said rights and interests were within
the contemplation of the Parties at the Signature Date;

    2.2.20

“Secured Obligations” means all of the obligations or Indebtedness (actual or
contingent), present or future, from whatsoever cause and howsoever arising
which the Parent may now or at any time hereafter owe or have towards the Lender
under or in connection with the Guarantee;

    2.2.21

“Security Cession” means the cession in securitatem debiti and pledge
contemplated by this Agreement;

    2.2.22

“Signature Date” means the date of the signature of the Party last signing this
Agreement in time;

    2.2.23

“Utilisation Date” shall bear the meaning defined in the Facility Agreement.

2.3

Unless inconsistent with the context or save where the contrary is expressly
indicated:

2.3.1

if any provision in a definition is a substantive provision conferring rights or
imposing obligations on any Party, notwithstanding that it appears only in this
interpretation clause, effect shall be given to it as if it were a substantive
provision of this Agreement;

    2.3.2

when any number of days is prescribed in this Agreement, same shall be reckoned
exclusively of the first and inclusively of the last day unless the

--------------------------------------------------------------------------------

Page 8.

last day falls on a day which is not a Business Day, in which case the last day
shall be the next succeeding Business Day;

    2.3.3

in the event that the day for payment of any amount due in terms of this
Agreement should fall on a day which is not a Business Day, the relevant day for
payment shall be the previous Business Day;

    2.3.4

in the event that the day for performance of any obligation to be performed in
terms of this Agreement should fall on a day which is not a Business Day, the
relevant day for performance shall be the subsequent Business Day;

    2.3.5

any reference in this Agreement to an enactment is to that enactment as at the
Signature Date and as amended or re-enacted from time to time;

    2.3.6

any reference in this Agreement to this Agreement or any other agreement or
document shall be construed as a reference to this Agreement or, as the case may
be, such other agreement or document as the same may have been, or may from time
to time be, amended, varied, novated or supplemented;

    2.3.7

no provision of this Agreement constitutes a stipulation for the benefit of any
person who is not a Party to this Agreement; and

    2.3.8

references to day/s, month/s or year/s shall be construed as Gregorian calendar
day/s, month/s or year/s.

2.4

Unless inconsistent with the context, an expression which denotes:

2.4.1

any one gender includes the other genders;

--------------------------------------------------------------------------------

Page 9.

2.4.2

a natural person includes an artificial person and vice versa; and

    2.4.3

the singular includes the plural and vice versa.

2.5

Where any term is defined within the context of any particular clause in this
Agreement, the term so defined, unless it is clear from the clause in question
that the term so defined has limited application to the relevant clause, shall
bear the same meaning as ascribed to it for all purposes in terms of this
Agreement, notwithstanding that that term has not been defined in this
interpretation clause.

    2.6

The rule of construction that, in the event of ambiguity, the contract shall be
interpreted against the Party responsible for the drafting thereof, shall not
apply in the interpretation of this Agreement.

    2.7

The expiration or termination of this Agreement shall not affect such of the
provisions of this Agreement as expressly provide that they will operate after
any such expiration or termination or which of necessity must continue to have
effect after such expiration or termination, notwithstanding that the clauses
themselves do not expressly provide for this.

    2.8

This Agreement shall be binding on and enforceable by the estates, heirs,
executors, administrators, trustees, permitted assigns or liquidators of the
Parties as fully and effectually as if they had signed this Agreement in the
first instance and reference to any Party shall be deemed to include such
Party’s estate, heirs, executors, administrators, trustees, successors-in-title,
permitted assigns or liquidators, as the case may be.

    2.9

The use of any expression in this Agreement covering a process available under
South African law such as winding-up (without limitation eiusdem generis) shall,
if any of the Parties to this Agreement is subject to the law of any other

--------------------------------------------------------------------------------

Page 10.

jurisdiction, be construed as including any equivalent or analogous proceedings
under the law of such other jurisdiction.

    2.10

Where figures are referred to in numerals and in words, if there is any conflict
between the two, the words shall prevail.

3.

INTRODUCTION

   

As security for the due performance of the Secured Obligations, the Parent has
agreed to pledge all of the Pledged Shares and cede in securitatem debiti all of
the Rights and Interests to the Lender on the terms and conditions set out in
this Agreement.

    4.

CESSION AND PLEDGE

   

The Parent hereby pledges to the Lender all of the Pledged Shares and cedes in
securitatem debiti to the Lender all of the Rights and Interests, as a
continuing general covering collateral security for the due, proper and timeous
payment and performance in full of all of the Secured Obligations, on the terms
and conditions set out in this Agreement, which pledge and cession the Lender
hereby accepts.

    5.

WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS BY THE PARENT

5.1                The Parent, on each day that this Agreement is in force:

5.1.1

warrants and represents that it is and will remain the sole and beneficial owner
of the Pledged Shares and the Rights and Interests to the exclusion of all
others and, save as otherwise contemplated in Article 28.3 of the Articles of
Association (prior to the deletion thereof as contemplated in clause 5.1.4
below), no person has an option or right of refusal over the Pledged Shares
and/or the Rights and Interests;

--------------------------------------------------------------------------------

Page 11.

5.1.2

warrants and represents that the Initial Net1 South Africa Shares are fully paid
for and constitute:

5.1.2.1

100% (one hundred percent) of the entire issued class “A” ordinary share capital
of Net1 South Africa; and

    5.1.2.2

84.4% (eighty-four comma four percent) of the entire issued class “B” preference
share capital of Net1 South Africa, as at the Signature Date;

5.1.3

warrants and represents that the Pledged Shares have been issued by Net1 South
Africa in accordance and compliance with all applicable laws and/or regulations;

    5.1.4

warrants and represents that the Pledged Shares pledged and the Rights and
Interests ceded in securitatem debiti to the Lender under this Agreement have
not been pledged and/or ceded (either outright or as security), discounted,
factored, mortgaged under notarial bond or otherwise, or otherwise disposed of
or hypothecated, nor are they subject to any other rights in favour of any
person (including without limitation any rights of pre-emption), save for the
rights set out in Article 28.3 of the Articles of Association which rights shall
be deleted from the Articles of Association pursuant to an amendment to the
Articles of Association by way of a special resolution adopted and registered
with the Registrar of Companies within 40 (forty) days (or such longer period as
may be acceptable to the Lender) after the Signature Date;

    5.1.5

warrants and represents that all obligations undertaken by it under this
Agreement have been authorised by all necessary corporate and/or other action
and the constitutional documents of the Parent do not place any

--------------------------------------------------------------------------------

Page 12.

limitations or restrictions on the Parent to pledge any of the Pledged Shares
and cede in securitatem debiti the Rights and Interests as provided for in this
Agreement;

    5.1.6

warrants and represents that to the best of its knowledge and belief the issue
of the Security Cession and the fulfilment of its obligations in accordance with
the terms thereof do not contravene any law, regulation or any contractual
obligation binding on it;

    5.1.7

waives any and all rights in respect of the Pledged Shares and/or the Rights and
Interests which it may have in conflict with the rights of the Lender under this
Agreement;

    5.1.8

acknowledges that it may not pledge, cede, assign or transfer or in any other
manner encumber or deal with the Pledged Shares and/or the Rights and Interests
without the prior written consent of the Lender (which consent shall not be
unreasonably withheld or delayed);

    5.1.9

agrees that on the occurrence of any breach or default in respect of any Secured
Obligation and a failure to remedy such breach or default in accordance with the
terms of the Guarantee, it will, upon exercise by the Lender of its rights under
clause 8 below, forthwith pay over to the Lender any interest or other benefits
of any nature accrued and/or received in respect of the Pledged Shares and the
Rights and Interests relating to the period after such a breach by depositing
the same into a nominated account as the Lender may from time to time direct in
writing; and

    5.1.10

undertakes and agrees to the extent possible to prevent any variation of the
value of, or rights relating to, the Pledged Shares and/or the Rights and

--------------------------------------------------------------------------------

Page 13.

Interests without the prior written consent of the Lender (which consent shall
not be unreasonably withheld or delayed).

5.2

Should any of the Pledged Shares and/or the Rights and Interests be subject to
any right in breach of the representation and warranty in clause 5.1.4, then,
without prejudice to any other rights that the Lender may have, any reversionary
or other interests the Parent may have in such Pledged Shares and/or the Rights
and Interests are also ceded in securitatem debiti to the Lender, and if the
holder of that cession or right is entitled to possession of any of the
documents referred to in clause 6 below, and it exercises that right, then the
Parent shall deliver photocopies of the documents to the Lender, and as soon as
the holder of that cession or right ceases to be entitled to possession or gives
up possession, the Parent shall deliver the relevant documents to the Lender.

    5.3

It is recorded that the Lender has entered into this Agreement, the Facility
Agreement and the Guarantee on the strength of and relying on the warranties and
representations in this clause 5, each of which shall be deemed to be a separate
warranty and representation, given without prejudice to any other warranty or
representation, and deemed to be a material representation inducing the Lender
to enter into this Agreement, the Facility Agreement and the Guarantee.

6.

DELIVERY OF DOCUMENTS

6.1

The Parent shall deliver to the Lender (or its nominee) to be held by or on
behalf of the Lender:

6.1.1

in relation to the Initial Net1 South Africa Shares:

--------------------------------------------------------------------------------

Page 14.

6.1.1.1

the original share certificate(s) in respect of the Initial Net1 South Africa
Shares;

    6.1.1.2

share transfer forms in respect of the Initial Net1 South Africa Shares duly
signed by the Parent as transferor and blank as to transferee,

on or before the Utilisation Date; and

    6.1.2

in relation to any Additional Net1 South Africa Shares acquired by the Parent
during any calendar month ending after the Signature Date:

6.1.2.1

the original share certificate(s) in respect of such Additional Net1 South
Africa Shares;

    6.1.2.2

share transfer forms in respect of such Additional Net1 South Africa Shares duly
signed by the Parent as transferor and blank as to transferee,

by no later than the 10th (tenth) Business Day after the end of each such
calendar month.

6.2

The Lender or its nominee on behalf of the Lender shall be entitled to retain
possession of the Documents of Title, and to deal with them in accordance with
the provisions of this Agreement until all the Secured Obligations have been
unconditionally and irrevocably finally discharged or released (“Discharge
Date”), as the case may be, whereupon the Documents of Title shall, within 10
(ten) Business of the Discharge Date, be returned to the Parent.

--------------------------------------------------------------------------------

Page 15.

6.3

In addition to the documents referred to above, the Parent shall deliver to the
Lender:

6.3.1

a written notice and acknowledgement substantially in the form of Schedule 1
hereto notifying Net1 South Africa of the Security Cession and signed by Net1
South Africa to acknowledge such cession and pledge on or before the Utilisation
Date;

    6.3.2

any other documents relating to the Pledged Shares and/or the Rights and
Interests for which it may at any time reasonably call, which documents shall be
delivered to the Lender within a reasonable period, as agreed between the Lender
and the Parent, and failing such agreement, within 10 (ten) Business Days.

6.4

The Parent shall generally do everything that may be required by the Lender for
the purposes of and to give effect to this Agreement, failing which the Lender
may, if possible, attend thereto and recover from the Parent any expenses
incurred in doing so.

7.

RIGHTS, POWERS AND PRIVILEGES ATTACHING TO THE PLEDGED SHARES AND THE RIGHTS AND
INTERESTS

7.1

This Agreement operates in respect of all rights, powers and privileges
attaching to the Pledged Shares and the Rights and Interests, including but not
limited to those set out in clause 7.2 below and such rights, powers and
privileges shall accordingly vest in the Lender with the power to exercise them
either in its own name or in the name of the Parent, upon the occurrence of any
breach of the Secured Obligations which has not been remedied in accordance with
the terms of the Guarantee. Alternatively, the Parent shall, if the Lender so
directs,

--------------------------------------------------------------------------------

Page 16.

exercise its rights, powers and privileges in its own name and in accordance
with the Lender’s directions to the greatest extent permitted by applicable law.

    7.2

Such rights, powers and privileges attaching to the Pledged Shares and/or the
Rights and Interests include (but are not limited to) the following:

7.2.1

the right to receive payment of that portion of the dividends and other benefits
which become due in respect of the Pledged Shares and/or the Rights and
Interests from time to time;

    7.2.2

the right to exercise any rights to appoint directors to the board of Net1 South
Africa;

    7.2.3

the right to receive notices of every general meeting of shareholders of Net1
South Africa, which are to be forwarded to the Lender just as if it were a
shareholder of Net1 South Africa; and

    7.2.4

the right to attend every general meeting of the shareholders of Net1 South
Africa and to exercise the votes attaching to the Pledged Shares at such
meetings.

7.3

For the avoidance of doubt, for so long as the Parent is not in breach of the
Secured Obligations, the provisions of clause 7.1 and 7.2 above will not apply.

8.

REALISATION

8.1

If the Parent commits any breach or default of the Secured Obligations and fails
to remedy such breach or default in accordance with the terms of the Guarantee,
the Parent hereby irrevocably and unconditionally authorises and empowers the
Lender or its nominee, without any further authority or consent of any nature

--------------------------------------------------------------------------------

Page 17.

whatsoever required from the Parent, but subject to applicable law, and in the
name of the Lender or in the name of the Parent to:

8.1.1

exercise all or any of the rights, including voting rights attached to the
Pledged Shares, powers and privileges and enforce all or any obligations
attaching to the Pledged Shares and/or the Rights and Interests in such manner
and on such terms as the Lender in its sole discretion deem fit; and/or

    8.1.2

receive payment for, delivery of and/or performance in respect of, the Pledged
Shares and/or the Rights and Interests in its own name; and/or

    8.1.3

at the Lender’s election:

8.1.3.1

to sell or otherwise realise the Pledged Shares and/or the Rights and Interests
or any one of them either by public auction or by private treaty, in the latter
case on reasonable notice to the Parent not exceeding 10 (ten) Business Days, as
the Lender may deem fit; and/or

    8.1.3.2

to take over the Pledged Shares and/or the Rights and Interests at the fair
market value thereof which, in the absence of agreement within 10 (ten) Business
Days after delivery by the Lender to the Parent of a written notice stating that
the Lender intends to exercise its rights pursuant to this clause 8.1.3.2, shall
be determined by an independent accountant agreed to by the Parties or, failing
agreement within 5 (five) Business Days, appointed, at the request of either
Party, by the President for the time being of the Southern African Institute of
Chartered Accountants (or the successor body thereto) (which independent
accountant shall act as an expert and not

--------------------------------------------------------------------------------

Page 18.

as an arbitrator, shall be instructed to make his determination within 10 (ten)
Business Days of being requested to do so and shall determine the liability for
his charges which will be paid accordingly, provided that if any determination
is manifestly unjust and the court exercises its general power, if any, to
correct such determination, the Parties shall be bound thereby) and, subject to
the provisions of clause 9, set off the purchase price payable by the Lender for
the Pledged Shares and/or the Rights and Interests against the Parent’s
indebtedness to the Lender in respect of the Secured Obligations on the basis
that any excess on realisation or any balance owing to the Parent, as the case
may be, will be paid to the Parent and any shortfall will remain as a debt due
by the Parent to the Lender; and/or

8.1.4

institute any legal proceedings which the Lender may deem necessary in
connection with any sale or other realisation or transfer of any of the Pledged
Shares and/or the Rights and Interests by the Lender or its nominee; and/or

    8.1.5

to convey valid title in the Pledged Shares and/or the Rights and Interests to
any purchaser thereof (including the Lender) and/or to take all such further or
other steps as the Lender may consider necessary to deal with the Pledged Shares
and/or the Rights and Interests.

8.2

On the Lender taking any actions in terms of clause 8.1, or otherwise as
required by the Lender, the Parent shall on demand by the Lender:

8.2.1

notify Net1 South Africa, in writing, that payment for, delivery of or
performance in respect of the relevant Pledged Shares and/or the relevant

--------------------------------------------------------------------------------

Page 19.

Rights and Interests must be made to the Lender, and that payment, delivery or
performance to the Parent or to anyone else will not constitute valid payment,
delivery or performance, and the Lender shall be entitled to do likewise. The
Parent shall on demand by the Lender provide proof that such notification has
been duly given;

    8.2.2

refuse to accept any payment, delivery or performance tendered in respect of any
of the Pledged Shares and/or the Rights and Interests in order that such
payment, delivery or performance be tendered to the Lender, which will apply any
payment so received in accordance with the provisions of clause 9;

    8.2.3

at its own cost carry out any lawful directions the Lender may give in regard to
the realisation of the Pledged Shares and/or the Rights and Interests and sign
any document or do any other reasonable and lawful act necessary to vest the
Pledged Shares and/or the Rights and Interests in the Lender, to enable the sale
or disposition of the Pledged Shares and/or the Rights and Interests, which may
otherwise be necessary or required to perfect the Security Cession created in
this Agreement.

8.3

Notwithstanding anything to the contrary contained in this Agreement, the Lender
shall not be obliged to take any particular steps to collect or otherwise
enforce its rights in respect of the Pledged Shares and/or the Rights and
Interests.

9.

APPROPRIATION OF PROCEEDS

   

The Lender shall apply the net proceeds of all amounts received pursuant to the
sale or other realisation of the Pledged Shares and/or the Rights and Interests
(after deducting all properly evidenced costs and expenses incurred by the
Lender in relation to such

--------------------------------------------------------------------------------

Page 20.

realisation) in reduction or discharge, as the case may be, of the Parent’s
obligations under the Secured Obligations in its sole discretion as it deems
fit. Any amount remaining thereafter shall, within 10 (ten) Business Days after
receipt of the excess sale or realisation proceeds, be paid to the Parent
provided that all of the Secured Obligations have been completely,
unconditionally and irrevocably fulfilled.

    10.

AUTHORITY

   

If at any time during this Agreement the Lender becomes entitled to exercise its
rights under clause 8.1, the Parent hereby authorises and appoints the Lender
irrevocably and in rem suam as the Parent’s attorney and agent in the Parent’s
name, place and stead to sign and execute:

10.1

any proxy in favour of the Lender or its nominee to enable the Lender to
exercise any voting rights attaching to the Shares or any of them; and

    10.2

such documents as may be necessary:

10.2.1

in order to render the Pledged Shares and/or the Rights and Interests or any of
them negotiable including, without limitation, the signature of transfer
declarations;

    10.2.2

to enable the Lender to receive payment of the purchase price of the Pledged
Shares and/or the Rights and Interests subject to the provisions of clause 9;
and/or

    10.2.3

to enable the Lender to exercise any of its rights granted to it herein.

--------------------------------------------------------------------------------

Page 21.

11.

DURATION

   

This Agreement is a continuing covering security and will ipso facto terminate
only upon the unconditional and irrevocable fulfilment of all the Secured
Obligations. In particular, this Agreement shall not terminate by reason solely
of the fact that there may at any time be reduced obligations or debts owing by
the Borrower under the Facility Agreement.

    12.

ADDITIONAL SECURITY

   

This Agreement is in addition to and not in substitution for any other security
held or hereafter to be held by the Lender from any party in connection with the
Secured Obligations, or otherwise and the Lender shall, without prejudice to its
rights hereunder, be entitled to release any such additional security held by
it.

    13.

CESSION

   

The Lender shall be entitled to cede, assign or delegate all, or any part of,
its rights and/or obligations, as the case may be, under this Agreement or under
any security granted by the Parent to the Lender in terms of this Agreement to
any other party who becomes a lender under the Facility Agreement without the
prior consent of the Parent; provided that the Parent shall be given written
notice of any such cession, assignment or delegation. To the extent that any
such cession, assignment or delegation results in a splitting of claims against
the Parent, the Parent consents to such splitting of claims.

    14.

PARENT BOUND NOTWITHSTANDING CERTAIN CIRCUMSTANCES

14.1

The Parent agrees that on signature hereof it will be bound in terms of this
Agreement to the full extent thereof, despite the fact that:

--------------------------------------------------------------------------------

Page 22.

14.1.1

any intended additional security from the Parent for the Secured Obligations may
not be obtained or protected or may be released or may cease to be held for any
other reason;

    14.1.2

the Lender and the Parent may agree a variation or novation of any of the
Secured Obligations;

    14.1.3

the Lender may grant any indulgence to the Parent or any surety or may not
exercise any one or more of its rights hereunder or under the Secured
Obligations, either timeously or at all;

    14.1.4

any insolvency, administration, judicial management, reorganisation,
arrangement, readjustment of debt, dissolution, liquidation or similar
proceedings by or against the Lender, the Parent, or any other person; and

    14.1.5

any other fact or circumstance may arise (including any act or omission by the
Lender) on which the Parent or any surety might otherwise be able to rely on a
defence based on prejudice, waiver or estoppel.

14.2

If the Parent suffers any loss arising from any of the facts, circumstances,
acts or omissions referred to above, the Parent will have no claim against the
Lender in respect thereof.

15.

SHARES AND RIGHTS AND INTERESTS TO BE KEPT FREE OF ENCUMBRANCES

   

The Parent shall at all times keep the Pledged Shares and the Rights and
Interests free of Encumbrances, (save as for such Encumbrances created or
required to be created in terms of the Facility Agreement) and shall not
prejudice, compromise, grant any

--------------------------------------------------------------------------------

Page 23.

indulgences or agree to vary the terms of any document creating the Pledged
Shares and the Rights and Interests without the prior written consent of the
Lender.

    16.

EXEMPTION FROM LIABILITY

   

The Lender and its officers, trustees, agents, beneficiaries, employees and
advisors shall not be liable for any loss or damage, whether direct, indirect,
consequential or otherwise, suffered by the Parent arising from any cause in
connection with this Agreement, whether the loss or damage results from breach
of contract (whether total, fundamental or otherwise), delict, negligence or any
other cause and whether this Agreement has been terminated or not, other than as
a result of the Lender’s gross negligence or wilful misconduct.

    17.

CERTIFICATE OF INDEBTEDNESS

   

A certificate signed by any manager or director of the Lender whose appointment
need not be proved, reflecting the amount owing by the Parent to the Lender
under the Guarantee and the due date for payment of such amounts will, in the
absence of manifest error, be prima facie evidence of the contents thereof.

    18.

RENUNCIATION OF BENEFITS

   

The Parent hereby renounces the legal benefits and exceptions of excussion,
division, non numeratae pecuniae, non causa debiti, revision of accounts and
errore calculi, the Parent declaring itself to be fully acquainted with the full
meaning and effect of this renunciation.

--------------------------------------------------------------------------------

Page 24.

19.

NOTICES AND DOMICILIA

19.1

Notices

19.1.1

Each Party chooses the address set out opposite its name below as its address to
which any written notice in connection with this Agreement may be addressed.

19.1.1.1 Parent:

  Physical Address: 4th Floor, President Place     Corner Jan Smuts Avenue and
Bolton     Road     Rosebank     JOHANNESBURG     2196     South Africa        
Telefax No: +27 11 880 7080   Attention: Mr Herman Kotze

19.1.1.2 Lender:

  Physical Address: 2 Gresham Street     LONDON     EC2V 7QP     United Kingdom
        Telefax No: +44 207 597 4913   Attention: Kim Boatwright

19.1.2

Any notice or communication required or permitted to be given in terms of this
Agreement shall be valid and effective only if in writing but it shall be
competent to give notice by telefax transmitted to its telefax number set out
opposite its name above.

--------------------------------------------------------------------------------

Page 25.

19.1.3

Either Party may by written notice to the other Party change its chosen address
and/or telefax number for the purposes of clause 19.1.1 to any other address(es)
and/or telefax number, provided that the change shall become effective on the
14th (fourteenth) day after the receipt of the notice by the addressee.

    19.1.4

Any notice given in terms of this Agreement shall:

19.1.4.1

if delivered by hand be deemed to have been received by the addressee on the
date of delivery;

    19.1.4.2

if transmitted by facsimile be deemed to have been received by the addressee on
the 1st (first) Business Day after the date of transmission;

unless the contrary is proved.

    19.1.5

Notwithstanding anything to the contrary herein contained, a written notice or
communication actually received by a Party shall be an adequate written notice
or communication to it, notwithstanding that it was not sent to or delivered at
its chosen address and/or telefax number.

19.2

Domicilia

19.2.1

Each of the Parties chooses its physical address set out opposite its name in
clause 19.1 as its domicilium citandi et executandi at which documents in legal
proceedings in connection with this Agreement may be served.

    19.2.2

Either Party may by written notice to the other Party change its domicilium from
time to time to another address, not being a post office box or a poste

--------------------------------------------------------------------------------

Page 26.

restante, in South Africa; provided that any such change shall only be effective
on the fourteenth day after the receipt or deemed receipt of the notice by the
other Party pursuant to clause 19.1.4.

20.

GOVERNING LAW

   

The entire provisions of this Agreement shall be governed by and construed in
accordance with the laws of South Africa.

    21.

JURISDICTION

   

The Parties hereby irrevocably and unconditionally consent to the non-exclusive
jurisdiction of the Witwatersrand Local Division of the High Court of South
Africa (or any successor to that division) in regard to all matters arising from
this Agreement.

    22.

SEVERABILITY

   

Each provision in this Agreement is severable from all others, notwithstanding
the manner in which they may be linked together or grouped grammatically, and if
in terms of any judgment or order, any provision, phrase, sentence, paragraph or
clause is found to be defective or unenforceable for any reason, the remaining
provisions, phrases, sentences, paragraphs and clauses shall nevertheless
continue to be of full force. In particular, and without limiting the generality
of the aforegoing, the Parties acknowledge their intention to continue to be
bound by this Agreement notwithstanding that any provision may be found to be
unenforceable or void or voidable, in which event the provision concerned shall
be severed from the other provisions, each of which shall continue to be of full
force.

--------------------------------------------------------------------------------

Page 27.

23.

GENERAL

23.1

This document constitutes the sole record of the Agreement between the Parties
in regard to the subject matter thereof.

    23.2

Neither Party shall be bound by any express or implied term, representation,
warranty, promise or the like, not recorded herein.

    23.3

No addition to, variation or consensual cancellation of this Agreement and no
extension of time, waiver or relaxation or suspension of any of the provisions
or terms of this Agreement shall be of any force or effect unless in writing and
signed by or on behalf of both the Parties.

    23.4

No latitude, extension of time or other indulgence which may be given or allowed
by either Party to the other Party in respect of the performance of any
obligation hereunder or enforcement of any right arising from this Agreement and
no single or partial exercise of any right by either Party shall under any
circumstances be construed to be an implied consent by such Party or operate as
a waiver or a novation of, or otherwise affect any of that Party’s rights in
terms of or arising from this Agreement or estop such Party from enforcing, at
any time and without notice, strict and punctual compliance with each and every
provision or term hereof.

    23.5

The Parties undertake at all times to do all such things, to perform all such
acts and to take all such steps and to procure the doing of all such things, the
performance of all such actions and the taking of all such steps as may be open
to them and necessary for or incidental to the putting into effect or
maintenance of the terms, conditions and import of this Agreement.

--------------------------------------------------------------------------------

Page 28.

23.6

The Parent shall not be entitled to cede or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Lender, which consent may not unreasonably be withheld or delayed.

24.

COSTS

24.1

The Parent shall bear the costs of and incidental to the negotiation,
preparation and execution of this Agreement and the implementation of the
transactions contemplated therein.

    24.2

All legal costs incurred by either Party in consequence of any default of the
provisions of this Agreement by the other Party shall be payable on demand by
the defaulting Party on the scale as between attorney and own client and shall
include collection charges, the costs incurred by the non-defaulting Party in
endeavouring to enforce such rights prior to the institution of legal
proceedings and the costs incurred in connection with the satisfaction or
enforcement of any judgement awarded in favour of the non-defaulting Party in
relation to its rights in terms of or arising out of this Agreement.

25.

COUNTERPARTS

   

This Agreement may be executed by each Party signing a separate copy thereof and
each of the copies together shall constitute the Agreement of the Parties.

--------------------------------------------------------------------------------

Page 29.

SIGNED at Rosebank on this the 27th day of August 2008.

For and on behalf of
NET1 UEPS TECHNOLOGIES, INC.

/s/ Herman Kotze                                       
Name: HG Kotze
Capacity: CFO
Who warrants his authority hereto

/s/ Serge CP Belamant                               
Name: SCP Belamant
Capacity: CEO
Who warrants his authority hereto

 

SIGNED at Gresham St, London on this the 27th day of August 2008.

For and on behalf of
INVESTEC BANK (UK) LIMITED

/s/ Charles Stott                                           
Name: Charles Stott
Capacity: Authorized Signatory
Who warrants his authority hereto

/s/ Michael Kurland                                     
Name: Michael Kurland
Capacity: Authorized Signatory
Who warrants his authority hereto

 

--------------------------------------------------------------------------------