Net Element International Inc. (NETE: Quote) said Tuesday that it entered into a binding term sheet to acquire all of the business assets of Unified Payments, LLC, a Delaware limited liability company. Unified is a provider of transaction processing services and payment-enabling technologies to small, medium and large merchants across the United States.
As per the Term Sheet, Unified will contribute all of its assets and business to the Company’s newly formed subsidiary, TOT, Inc.
As per the deal, TOT, Inc. will assume Unified’s long-term debt not exceeding, together with Unified’s entire preferred equity plus payable in kind interest accrued thereon through January 1, 2014, $23.14 million plus accrued interest on the long-term debt portion of such amount through the closing date less any liabilities to Unified and its affiliates and/or related parties; TOT will commit to reduce the assumed indebtedness to RBL Capital by $1 million within six months from the closing.
From the closing date through December 31, 2013, Unified’s preferred equity will continue accruing payable in kind interest at 8% per annum compounded quarterly and, on January 1, 2014, Unified’s preferred equity and accrued and unpaid payable in kind interest thereon will be converted into a term loan with 8% per annum interest only debt (interest to be paid quarterly), with the entire amount of outstanding principal payable three years from such conversion date.
At the closing of the Contribution, TOT, Inc. will issue to Unified an amount of common stock of TOT, Inc. representing, upon such issuance, 10% of the total issued and outstanding shares of common stock of TOT, Inc.The company said it will provide to Unified a bridge loan in the total amount of up to $750,000 substantially on the terms set forth in the loan documents entered into by the Company and Unified on March 8, 2013. The first draw under the Bridge Loan will be $600,000.
In Tuesday’s regular trading session, NETE is currently trading at $2.64, up $0.32 or 13.79 percent.
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by RTT Staff Writer
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