SHARE PURCHASE AGREEMENT
between:
CROWN CONSOLIDATED GOLD RECOVERIES LIMITED
and
THE INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LIMITED
and
KHUMO BATHONG HOLDINGS (PROPRIETARY) LIMITED
and
DURBAN ROODEPOORT DEEP, LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇
Telephone : (▇▇▇) ▇▇▇ ▇▇▇▇
Fax : (▇▇▇) ▇▇▇ ▇▇▇▇
Page 2
TABLE OF CONTENTS
1. INTERPRETATION......................................................... 4
2. CONDITIONS PRECEDENT................................................... 11
3. SALE AND PURCHASE...................................................... 14
4. CONSIDERATION.......................................................... 15
5. CLOSING................................................................ 16
6. RAISING FEE............................................................ 20
7. COLLATERAL AGREEMENTS.................................................. 20
8. RESCISSION EVENT....................................................... 21
9. WARRANTIES AND REPRESENTATIONS......................................... 22
10. ANNOUNCEMENTS AND CONFIDENTIALITY...................................... 24
11. BREACH................................................................. 25
12. GENERAL................................................................ 25
13. ARBITRATION............................................................ 27
14. ADDRESSES FOR LEGAL PROCESS AND NOTICES................................ 28
15. COSTS.................................................................. 30
16. SPECIAL INDEMNITY UNDERTAKINGS......................................... 31
SCHEDULES:
SCHEDULE 1: CONTRACTS
SCHEDULE 1A: DRD GROUP CONTRACTS
SCHEDULE 2: SURETYSHIPS AND GUARANTEES
SCHEDULE 3: SHAREHOLDERS' AGREEMENT
SCHEDULE 4: SUBSCRIPTION AGREEMENT
SCHEDULE 5: LITIGATION
SCHEDULE 6: DRAFT CESSION AGREEMENT
SCHEDULE 7: MEMORANDUM OF LOAN AGREEMENT NO. 3
Page 3
SHARE PURCHASE AGREEMENT
between:
CROWN CONSOLIDATED GOLD RECOVERIES LIMITED
(Registration Number 1997/007865/06)
("Seller")
and
THE INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LIMITED
(Registration Number 1940/014201/06)
("IDC")
and
KHUMO BATHONG HOLDINGS (PROPRIETARY) LIMITED
(Registration Number 1998/007546/07)
("KBH")
(together "the Purchasers")
and
DURBAN ROODEPOORT DEEP, LIMITED
(Registration number 1895/000926/06)
("DRD")
for
the purchase by the IDC of 57% (fifty seven percent) of the issued share capital
of, and the cession of 57% (fifty seven percent) of the Claims (as defined in
clause 1.1.11) of the Seller against, Crown Gold Recoveries (Proprietary)
Limited ("the Company"), and the purchase by KBH of 3% (three percent) of the
issued share capital of, and the cession of 3% (three percent) of the Claims (as
defined in clause 1.1.11) of the Seller against, the Company.
Page 4
WHEREAS:
A. The Seller is the owner of the Claims and 100% (one hundred percent) of the
issued share capital of the Company.
B. The Seller is desirous of selling the Sale Shares and ceding the Ceded
Claims to the Purchasers and the Purchasers are willing to purchase the
Sale Shares and to accept the cession of the Ceded Claims from the Seller
on the terms and subject to the conditions set out in this Agreement.
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, and the preamble, unless the
context requires otherwise, the parties defined in the heading of this
Agreement shall retain such definitions and the words and expressions
set out below shall have the meanings assigned to them, namely:
1.1.1 "Affiliate" means with respect to any person, any
other person directly or indirectly
holding at least 30% (thirty per cent)
of the ordinary issued share capital
of that person;
1.1.2 "this Agreement" means this
share purchase agreement
and includes its Schedules which shall
form part of it;
1.1.3 "the Attorneys" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Inc, of ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇;
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1.1.4 "Audited Accounts" means the audited accounts of the
Company as at the Balance Sheet Date;
1.1.5 "Balance Sheet Date" means 30 June 2001;
1.1.6 "Business Day" means any day other than a Saturday,
Sunday or statutory holiday in South
Africa;
1.1.7 "Call Rate" means the publicly quoted rate of
interest, ruling from time to time and
expressed as a rate per annum based on
a 365 (three hundred and sixty five)
day year, which The Standard Bank of
South Africa Limited pays to its
depositors on amounts invested with it
in Rand denominated daily call
accounts, as certified by any manager
of that bank (whose authority and
appointment need not be proved);
1.1.8 "CCGR Loan" means all the non-interest bearing
loans made by the Company to DRD and
thus owing by DRD to the Company as at
the Closing Date, which shall be
evidenced by a certificate issued by
the finance director of the Company or
a person in an equivalent position in
the Company in terms of clause 5.4, at
Closing;
1.1.9 "Ceded Claims" means 60% (sixty percent) of the
Claims being the IDC Ceded Claims and
the KBH Ceded Claims, which for the
purposes of this Agreement shall be
R114 063 669.60 (one hundred and
fourteen million sixty three thousand
and six hundred and sixty nine Rand
and sixty cents), and which the Seller
is ceding to the Purchasers in terms
of this Agreement;
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1.1.10 "Cession Agreement" means the cession agreement to be
entered into by the Company the Seller
and DRD, in terms of clause 5.5, in
substantially the same form and
substance as that set out in the draft
attached to this Agreement as
Schedule 6;
1.1.11 "Claims" means all the shareholder loans
granted by the Seller to the Company
as reflected in the Memorandum of Loan
Agreement No. 3 attached to this
agreement as Schedule 7;
1.1.12 "Closing" means the meeting to be held by the
Parties in terms of clause 5;
1.1.13 "Closing Date" means the date and time on which all
the matters to be completed in terms
of clause 5 are duly completed in
accordance with the requirements of
that clause;
1.1.14 "Companies Act" means the Companies ▇▇▇, ▇▇▇▇, as
amended;
1.1.15 "the Company" means Crown Gold Recoveries
(Proprietary) Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1988/05115/07, and a wholly
owned subsidiary of the Seller;
1.1.16 "Conditions Precedent" means all the conditions precedent set
out in clause 2.1 and "Condition
Precedent" means any one of them;
1.1.17 "Contracts" means all the contracts of a material
nature to which DRD or the Company, as
the case may be, is a party and which
require consent of the counterparty to
effect the transaction
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contemplated in this Agreement and
which contracts are listed in
Schedule 1;
1.1.18 "DRD" means Durban Roodepoort Deep, Limited,
a company registered in accordance
with the laws of South Africa under
Registration Number 1895/000926/06,
and the sole shareholder in the
Seller;
1.1.19 "DRD Group Contracts" means any contracts entered into
between the Company, its holding
company(ies) or any of its Affiliates,
which contracts are listed in Schedule
1A to this Agreement;
1.1.20 "Effective Date" means the date upon which all the
Conditions Precedent are met and upon
which this Agreement becomes
unconditional and accordingly takes
effect;
1.1.21 "Encumbrance" means any interest (including any
right to acquire, option or right of
pre-emption), pledge, lien,
assignment, hypothecation, title
retention or other security agreement
or arrangement;
1.1.22 "Existing GNB" means the general notarial covering
bond registered on 13 September 1999,
under Registration Number
BN25326/1999, by the Company in favour
of the IDC over all the moveable
assets of the Company as security for
the amount of R25 000 000 (twenty five
million Rand) then owing by the
Company to the IDC;
1.1.23 "IDC" means The Industrial Development
Corporation of South Africa Limited, a
company registered in accordance with
the laws of the Republic of
Page ▇
▇▇▇▇▇ ▇▇▇▇▇▇ under Registration Number
1940/014201/06;
1.1.24 "IDC Ceded Claims" means 57% (fifty seven percent) of the
Claims, which for the purposes of this
Agreement shall be R108 360 486 (one
hundred and eight million three
hundred and sixty thousand and four
hundred and eighty six Rand), which
the Seller is ceding to the IDC in
terms of this Agreement;
1.1.25 "IDC Sale Shares" means 57 (fifty seven) ordinary shares
of R1 (one Rand) each in the issued
share capital of the Company to be
sold by the Seller to the IDC in terms
of this Agreement and constituting
part of the Sale Shares;
1.1.26 "KBH" means Khumo Bathong Holdings
(Proprietary) Limited, a company
registered in accordance with the laws
of the Republic of South Africa under
Registration Number 1998/007546/07;
1.1.27 "KBH Ceded Claims" means 3% (three percent) of the
Claims, which for the purposes of this
Agreement shall be R5 703 183 (five
million seven hundred and three
thousand and one hundred and eighty
three Rand), which the Seller is
ceding to KBH in terms of this
Agreement;
1.1.28 KBH Sale Shares means 3 (three) ordinary shares of R1
(one Rand) each in the issued share
capital of the Company to be sold by
the Seller to KBH in terms of this
Agreement and constituting part of the
Sale Shares;
1.1.29 "Litigation" means all litigation and claims of a
material
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nature affecting the Company and which
litigation and claims are listed in
Schedule 5 to this Agreement;
1.1.30 "Parties" means the Seller, the Purchasers and
DRD and "Party" means any one of them;
1.1.31 "Purchasers" means KBH and the IDC and "Purchaser"
means any one of them;
1.1.32 "Rand" or "R" means Rand, the lawful currency of
South Africa;
1.1.33 "Sale Shares" means 60 (sixty) ordinary shares of R1
(one Rand) each in the issued share
capital of the Company which the
Seller is selling to the Purchasers
under this Agreement, comprising the
IDC Sale Shares and the KBH Sale
Shares;
1.1.34 "Security" means the suretyships and guarantees
granted by DRD on behalf of or in
favour of the Company and listed in
Schedule 2;
1.1.35 "Seller" means Crown Consolidated Gold
Recoveries Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1997/007865/06, and a wholly
owned subsidiary of DRD;
1.1.36 "Shareholders' Agreement" means the shareholders' agreement to
be entered into between the Seller,
the Purchasers and the Company
simultaneously with the signing of
this Agreement, a copy of which is
attached to this Agreement as
Schedule 3;
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1.1.37 "Signature Date" means the last date on which this
Agreement is signed by the Parties;
1.1.38 "South Africa" means the Republic of South Africa as
constituted from time to time; and
1.1.39 "Subscription Agreement" means the subscription agreement to be
entered into between DRD and KBH
simultaneously with the signing of
this Agreement, a copy of which is
attached to this Agreement as
Schedule 4.
1.2 GENERAL INTERPRETATION
In addition to the definitions in clause 1.1, unless the context
requires otherwise:
1.2.1 the singular shall include the plural and vice versa;
1.2.2 a reference to any one gender, whether masculine, feminine or
neuter, includes the other two;
1.2.3 any reference to a natural person includes an artificial person
and vice versa;
1.2.4 any word or expression defined in and for the purposes of this
Agreement shall, if expressed in the singular, include the plural
and vice versa and a cognate word or expression shall have a
corresponding meaning;
1.2.5 words and expressions defined in the Companies Act, which are not
defined in this Agreement, shall bear the same meanings in this
Agreement as those ascribed to them in the Companies Act;
1.2.6 references to a statutory provision include any subordinate
legislation made from time to time under that provision;
references to a statutory
Page 11
provision include that provision as from time to time modified or
re-enacted as far as such modification or re-enactment applies,
or is capable of applying, to this Agreement or any transaction
entered into in accordance with this Agreement; and
1.2.7 references in this Agreement to "clauses" and "Schedules" are to
clauses and schedules to this Agreement.
1.3 HEADINGS AND SUB-HEADINGS
All the headings in this Agreement, including any sub-headings, are
for convenience only and are not to be taken into account for the
purposes of interpreting it.
2. CONDITIONS PRECEDENT
2.1 The whole of this Agreement (except for this clause 2 and clauses 1,
10, 11, 12, 13, 14 and 15) shall be subject to the fulfilment or
deemed fulfilment of all the following conditions precedent within 120
(one hundred and twenty) days of the Signature Date or such later date
as the Parties may agree upon in writing:
2.1.1 the Company shall have issued to the Seller an additional 99
(ninety nine) ordinary shares of R1 (one Rand) each in the issued
share capital of the Company resulting in the Company having an
issued share capital of 100 (one hundred) ordinary shares of R1
(one Rand) each;
2.1.2 the board of directors of each of the Parties shall have approved
this transaction and each of the Parties shall have been
furnished with the relevant resolutions of each of the boards of
directors of the other Parties evidencing such approval;
Page 12
2.1.3 the Parties shall have obtained the relevant written approval
from the South African competition authorities for the
acquisition by the Purchasers of the Sale Shares;
2.1.4 all appropriate shareholder approvals, to the extent required,
shall have been obtained by the Seller in terms of Section 228 of
the Companies Act;
2.1.5 the Seller shall have obtained the waiver of any rights which the
counterparties of the Company under the Contracts may have as a
result of the Purchasers acquiring the Sale Shares from the
Seller and, to the extent necessary, the written consent of each
such counterparty to the acquisition by the Purchasers of the
Sale Shares for the purposes of securing the IDC Ceded Claim;
2.1.6 the Company shall have registered, through the attorneys of the
IDC and in favour of the IDC, in addition to the Existing GNB, a
general notarial covering bond over all the assets of the
Company, on terms acceptable to the IDC, in the amount of R45 000
000 (forty five million Rand), as security for the shareholder
loan by the IDC to the Company referred to in clause 6.3.1 of the
Shareholders' Agreement;
2.1.7 DRD shall have furnished the IDC with a copy of the Subscription
Agreement duly executed by it and KBH.
2.2 It is recorded that the Conditions Precedent in clauses 2.1.1, 2.1.2,
and 2.1.3 are stipulated for the benefit of all the Parties, the
Condition Precedent in clause 2.1.4 is stipulated for the benefit of
the Seller, the Condition Precedent in clause 2.1.5 is stipulated for
the benefit of DRD and the Company and the Conditions Precedent in
clauses 2.1.6 and 2.1.7 above are stipulated for the benefit of the
IDC. To the extent that any of the Conditions Precedent is for the
sole benefit of one Party, such Party may waive such condition in
writing to that effect, and upon any such waiver the condition shall
be deemed to have been fulfilled.
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2.3 Except for the provisions of clause 2.1.1 and clause 2.1.7, if any
approval or consent required for the fulfilment of any Condition
Precedent is granted subject to any condition which adversely affects
the Company or the Seller or DRD or any Purchaser to a material
extent, the approval shall be deemed not to have been given:
2.3.1 if, in the event of the Company or the Seller or DRD being so
affected, DRD and the Seller, acting jointly, so require and give
written notice to that effect to the Purchasers within 30
(thirty) days from the date on which the approval in question is
granted; or
2.3.2 if, in the event of any Purchaser being so affected, the
Purchasers, acting jointly, so require and give written notice to
that effect to the Seller and DRD within 30 (thirty) days from
the date on which the approval in question is granted.
2.4 If any one of the Conditions Precedent is not fulfilled, deemed to be
fulfilled or waived within 120 (one hundred and twenty) days of the
Signature Date or such later date as the Parties may agree upon in
writing, then this Agreement (except for this clause 2 and clauses 1,
10, 11, 12, 13, 14 and 15) shall not take effect unless otherwise
agreed in writing by the Parties. If this Agreement (except for this
clause 2 and clauses 1, 10, 11, 12, 13, 14 and 15) does not take
effect in accordance with the provisions of this clause 2, no Party
shall have any claim against any other of any nature whatsoever
arising from the provisions of this Agreement, save that, if the
general notarial covering bond required to be registered in terms of
clause 2.1.6 shall have been registered, the IDC shall unconditionally
and at its own cost promptly procure the cancellation of, and release
the Company from, such general notarial covering bond and the IDC
shall reimburse the Company (in the event that this Agreement does not
take effect in accordance with the provisions of this clause 2 due to
any act or omission of or on the part of the IDC) for all costs
(including stamp duty) incurred by the Company in the registration of
such general notarial covering bond.
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2.5 The Parties shall use their reasonable endeavours to do whatever may
be necessary to procure the fulfilment of the Conditions Precedent and
shall co-operate fully with each other for that purpose.
2.6 Notwithstanding its obligation to use its reasonable endeavours to do
whatever may be necessary to procure the fulfilment of the Conditions
Precedent, set out in clause 2.5, the IDC undertakes to the Seller and
DRD that it will use its best endeavours to do whatever may be
necessary to procure the lodgement of the general notarial covering
bond, required to be registered in terms of clause 2.1.6, as soon as
possible after the Signature Date, and to procure its registration
within 10 (ten) Business Days of the date of its lodgement.
3. SALE AND PURCHASE
3.1 The Seller agrees to:
3.1.1 sell to KBH, and KBH agrees to purchase from the Seller, free
from all Encumbrances together with all rights attaching thereto,
the KBH Sale Shares, with effect from the Closing Date; and
3.1.2 cede to KBH, and KBH agrees to accept cession of, the KBH Ceded
Claims, with effect from the Closing Date,
against payment of the various consideration set out in clause 4 and
in accordance with the terms and subject to the conditions of this
Agreement.
3.2 The Seller agrees to:
3.2.1 sell to the IDC, and the IDC agrees to purchase from the Seller,
free from all Encumbrances together with all rights attaching
thereto, the IDC Sale Shares with effect from the Closing Date;
and
3.2.2 cede to the IDC, and the IDC agrees to accept cession of, the IDC
Ceded Claims, with effect from the Closing Date,
Page 15
against payment of the various consideration set out in clause 4 and
in accordance with the terms and subject to the conditions of this
Agreement.
3.3 The risk in and benefit of the KBH Sale Shares shall pass from the
Seller to KBH upon completion of Closing on the Closing Date.
3.4 The risk in and benefit of the IDC Sale Shares shall pass from the
Seller to the IDC upon completion of Closing on the Closing Date.
3.5 The risk in and benefit of the KBH Ceded Claims shall pass from the
Seller to KBH upon completion of Closing on the Closing Date.
3.6 The risk in and benefit of the IDC Ceded Claims shall pass from the
Seller to the IDC upon completion of Closing on the Closing Date.
4. CONSIDERATION
4.1 The total sum of the consideration payable by the Purchasers to the
Seller for the Sale Shares and Ceded Claims shall be R105 531 000 (one
hundred and five million five hundred and thirty one thousand Rand) in
the aggregate comprising:
4.1.1 an amount of R57 (fifty seven Rand) which shall be payable by the
IDC for the Sale Shares purchased by the IDC;
4.1.2 the discounted amount of R100 254 393 (one hundred million two
hundred and fifty four thousand and three hundred and ninety
three Rand) which shall be payable by the IDC for the IDC Ceded
Claims;
4.1.3 an amount of R3 (three Rand) which shall be payable by KBH for
the Sale Shares purchased by KBH;
Page 16
4.1.4 the discounted amount of R5 276 547 (five million two hundred and
seventy six thousand and five hundred and forty seven Rand) which
shall be payable by KBH for the KBH Ceded Claims.
4.2 The consideration referred to in clause 4.1 shall be payable by each
of the Purchasers to the Seller as follows:
4.2.1 the IDC shall discharge the consideration referred to in clauses
4.1.1 and 4.1.2 by paying an amount of R100 254 450 (one hundred
million two hundred and fifty four thousand four hundred and
fifty Rand) in cash to the Seller by means of a telegraphic
transfer, for value at the Closing Date, to a bank account of the
Seller in South Africa, which shall have been designated by the
Seller giving written notice to the IDC at least 24 (twenty four)
hours before the Closing Date, in accordance with the provisions
of clause 5;
4.2.2 KBH shall discharge the consideration referred to in clauses
4.1.3 and 4.1.4 by paying a total amount of R5 276 550 (five
million two hundred and seventy six thousand five hundred and
fifty Rand) in cash to the Seller by means of a telegraphic
transfer, for value at the Closing Date, to a bank account of the
Seller in South Africa, which shall have been designated by the
Seller giving written notice to KBH at least 24 (twenty four)
hours before the Closing Date, in accordance with the provisions
of clause 5.
5. CLOSING
Unless otherwise agreed by the Parties in writing, a meeting shall be held
within 5 (five) Business Days from the Effective Date at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Inc. located on ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ City,
Fifth Street, Sandton at 10h00, or at such other place or time as the
Parties may agree in writing, at which the following matters shall be
completed by them:
5.1 The Seller shall deliver to the Attorneys all the certificates for the
Sale Shares, together with such transfer forms, duly executed by it
and currently dated, as
Page 17
may be required for the lawful transfer of the Sale Shares to the
Purchasers, together with the appropriate resolutions if applicable,
from the Seller's board of directors authorising the sale of the Sale
Shares by the Seller to the Purchasers and the appropriate resolutions
from the Seller's shareholders authorising the sale of the Sale
Shares. The Parties shall procure that the Attorneys hold, and release
such certificates, transfer forms and resolutions, in accordance with
the provisions of clause 5.9.
5.2 Each Purchaser shall deliver to the Seller, in a form reasonably
acceptable to the Seller, written evidence from its bankers of the
implementation by it of the telegraphic transfer of the consideration
payable by it in terms of clause 4, to the bank account of the Seller
designated pursuant to the provisions of clause 4.2.1 or clause 4.2.2,
as the case may be, and for value at the Closing Date.
5.3 The Seller shall procure that meetings of the board of directors of
the Company are held, at which resolutions approving of the following
matters, where applicable, are duly passed by the board of directors:
5.3.1 the transfer from the Seller to the Purchasers of the Sale Shares
in accordance with the share transfer forms delivered to the
Purchasers in terms of clause 5.1 above;
5.3.2 the Company ceding assigning and making over the CCGR Loan to the
Seller in accordance with the provisions of the Cession
Agreement;
5.3.3 the registration in the Company's register of members of the
Purchasers as the holders of the Sale Shares in accordance with
the approval given in terms of clause 5.3.1 above;
5.3.4 the issue of appropriate new share certificates for the Sale
Shares to the Purchasers in accordance with the provisions of
clause 5.3.3 above;
5.3.5 accepting the resignation of the relevant members of the board of
directors of the Company; and
Page 18
5.3.6 the appointment to the board of directors of the Company of:
5.3.6.1 1 (one) representative of the IDC, nominated by the IDC as
its nominee for the board of directors of the Company with
immediate effect;
5.3.6.2 2 (two) representatives of KBH, nominated by KBH as its
nominees for the board of directors of the Company with
immediate effect.
5.4 The Seller shall deliver to the Purchasers a certificate issued by the
finance director of the Company, or a person in an equivalent position
in the Company, confirming the total amount of the CCGR Loan as at the
Closing Date. The Parties agree that the certificate so issued shall,
in absence of manifest error, be final and binding on them.
5.5 The Seller, the Company and DRD shall enter into and conclude the
Cession Agreement in terms of which the total amount of the CCGR Loan
(as evidenced by the certificate referred to in clause 5.4) is ceded,
assigned and made over by the Company to the Seller.
5.6 The Seller shall pay to the Company R1 (one Rand) in cash, as required
by the provisions of clause 3 of the Cession Agreement.
5.7 Each of the Purchasers shall deliver to the Seller appropriate board
resolutions authorising it to enter into and to perform all of its
obligations under this Agreement.
5.8 The Company shall issue, in the name of the IDC and KBH respectively,
appropriate new share certificates showing the IDC as the holder of
the IDC Sale Shares and KBH as the holder of the KBH Sale Shares. In
addition, the Company shall issue, if necessary, in the name of the
Seller a balancing share certificate showing the Seller as the holder
of 40 (forty) ordinary shares of R1 (one Rand) each in the issued
share capital of the Company. All the share certificates relating to
the shareholdings of KBH and the IDC shall be delivered by the Company
to the Attorneys. The Parties shall procure that the
Page 19
Attorneys hold, and release, such certificates in accordance with the
provisions of clause 5.9.
5.9 The Attorneys shall hold the share certificates, share transfer forms
and resolutions delivered to them in terms of clauses 5.1 and 5.8 in
trust on behalf of the Seller, until such time as it receives
notification in writing from the Seller confirming receipt by the
Seller of the consideration payable by the IDC and KBH for the Sale
Shares, set out in clause 4, in the bank account of the Seller
designated by the Seller pursuant to the provisions of clauses 4.2.1
and 4.2.2, for value at the Closing Date. Upon receipt of such written
notification from the Seller, the Attorneys shall release:
5.9.1 to the IDC:
5.9.1.1 the share transfer form duly executed by the Seller for the
transfer to the IDC of the IDC Sale Shares;
5.9.1.2 a certified copy of the resolutions authorising the sale of
the Sale Shares by the Seller to the Purchasers;
5.9.1.3 the share certificate issued by the Company in the IDC's
name for the IDC Sale Shares, in terms of clause 5.8;
5.9.2 to KBH:
5.9.2.1 the share transfer form duly executed by the Seller for the
transfer to KBH of the KBH Sale Shares;
5.9.2.2 a certified copy of the resolutions authorising the sale of
the Sale Shares by the Seller to the Purchasers;
5.9.2.3 the share certificate issued by the Company in KBH's name
for the KBH Sale Shares, in terms of clause 5.8;
5.9.3 to the Company:
Page 20
5.9.3.1 the Seller's share certificates for the Sale Shares, for the
purposes of their cancellation;
5.9.3.2 the original resolutions authorising the sale of the Sale
Shares by the Seller to the Purchasers, for the purposes of
inserting such resolutions into the Company's record books.
5.10 Each of the Parties shall provide written evidence that all the
Conditions Precedent, to the extent that it was its responsibility to
ensure fulfilment, have indeed been fulfilled.
5.11 Notwithstanding anything to the contrary anywhere else in this
Agreement, the Parties agree that all the actions taken pursuant to
the provisions of clauses 5.1 to 5.9 above shall be deemed to have
been taken simultaneously, and that none of them shall be deemed to
have been taken unless all of them have been taken.
6. RAISING FEE
Within 14 (fourteen) Business Days of the Subscription Date (as defined in
the Subscription Agreement), the Parties will procure that the Company
shall pay to the IDC a raising fee of R1 002 543 (one million two thousand
and five hundred and forty three Rand), which constitutes 1% (one percent)
of R100 254 393 (one hundred million two hundred and fifty four thousand
three hundred and ninety three Rand), in cash by means of a bank guaranteed
cheque issued by a reputable bank acceptable to the IDC.
7. COLLATERAL AGREEMENTS
The Parties agree with each other that the Parties and, where applicable,
other relevant parties, shall simultaneously with the signature of this
Agreement enter into the following collateral agreements:
7.1 the Shareholders' Agreement; and
Page 21
7.2 the Subscription Agreement.
8. RESCISSION EVENT
8.1 For the purposes of this Agreement, a "Rescission Event" shall occur
if KBH fails to subscribe for 4 794 889 (four million seven hundred
and ninety four thousand and eight hundred and eighty nine) ordinary
shares in the stated capital of DRD within 30 (thirty) days of the
Closing Date.
8.2 Upon occurrence of a Rescission Event in terms of clause 8.1, this
Agreement shall terminate with immediate effect unless otherwise
agreed upon in writing by the Parties and the Parties shall be
restored to their status quo and on the basis that there shall be
restitution between the Parties in accordance with and subject to the
following provisions:
8.2.1 each of the Purchasers shall transfer (without Encumbrances) to
the Seller all the shares it holds in the Company at a cash
consideration which is equivalent to the par value of each of
those shares and each of the Purchasers shall be liable for any
stamp duty payable for the transfer of its portion of the shares;
8.2.2 KBH shall be deemed to have re-ceded (without Encumbrances) all
the KBH Ceded Claims acquired by it in terms of this Agreement to
the Seller at a cash consideration payable by the Seller which is
equivalent to the purchase consideration paid for those Claims in
terms of clause 4, plus interest on that purchase consideration
calculated at the Call Rate from the Closing Date to the date of
payment, less any dividends declared or distributions made on the
KBH Sale Shares to KBH by the Company;
8.2.3 the IDC shall be deemed to have re-ceded (without Encumbrances)
all the IDC Ceded Claims acquired by it in terms of this
Agreement to the Seller at a cash consideration payable by the
Seller which is equivalent to the purchase consideration paid for
those Claims in terms of clause
Page 22
4, plus interest on that purchase consideration calculated at the
Call Rate from the Closing Date to the date of payment, less any
dividends declared or distributions made on the IDC Sale Shares
to the IDC by the Company;
8.2.4 the IDC shall promptly repay the raising fee referred to in
clause 6 together with interest thereon calculated at the Call
Rate from the date of payment of the raising fee by the Company
to the IDC in terms of clause 6 to the date of repayment by the
IDC to the Company,
and upon completion of all items referred to in clause 8.2, no Party
shall have any claim against any other of any nature whatsoever
arising from the provisions of this clause 8.2 save that, if any of
the Claims are secured, the Party holding the security shall
unconditionally and at its own cost promptly release the Company from
all such security. The risk in and benefit of the IDC Sale Shares, the
KBH Sale Shares, the IDC Ceded Claims and the KBH Ceded Claims,
transferred and deemed to have been receded in terms of clauses 8.2.1
to 8.2.3, shall be deemed to have passed from the IDC and KBH to the
Seller upon completion of the transfer of the IDC Shares and the KBH
Shares from the IDC and KBH to the Seller in terms of clause 8.2.1.
9. WARRANTIES AND REPRESENTATIONS
9.1 The Seller hereby warrants and represents to the Purchasers that:
9.1.1 the Company has properly and punctually made all tax returns and
provided all information required for taxation purposes in
accordance with the tax laws of South Africa;
9.1.2 in so far as it is aware, the Company has duly and punctually
paid all taxation which it has become liable to pay and is under
no liability to pay any penalty or interest in connection with
any claim for taxation;
9.1.3 other than the Litigation affecting the Company set out in
Schedule 5 to this Agreement, no other litigation or arbitration
or administrative or
Page 23
criminal proceedings are pending or threatened or expected by or
against the Company or any such officer, agent or employee in
relation to the business of the Company; and so far as the Seller
is aware there are no facts or circumstances likely to give rise
to any such litigation or arbitration or administrative or
criminal proceedings;
9.1.4 each of the Company's contracts as listed in Schedule 1 to this
Agreement are valid and binding and to the extent that the
counterparties to these contracts are to be notified of the
transaction contemplated in this Agreement or are required to
give their consent to the transaction contemplated in this
Agreement, as the case may be, such notice and/or consent has
been duly given and no notice of termination of any such contract
has been received or served by the Company and the Seller is not
aware of the invalidity of, or of any grounds for termination,
rescission, avoidance or repudiation of, any such contracts;
9.1.5 apart from the DRD Group Contracts which are listed in Schedule
1A to this Agreement, there are no other DRD Group Contracts in
place; and if there are any such DRD Group Contracts the Seller
agrees that these contracts are to be negotiated by the Company
and that the Seller will indemnify the Purchasers against any
losses arising from these contracts;
9.1.6 it is the owner of the Sale Shares;
9.1.7 the Sale Shares and the Claims are unencumbered;
9.1.8 the assets of the Company are unencumbered (except insofar as the
assets are encumbered in favour of the IDC by means of the
Existing GNB and the general notarial covering bond required to
be registered in terms of clause 2.1.6);
9.1.9 between Signature Date and the Effective Date, the Company shall
not pay out any dividends and sell any assets other than in the
ordinary course of business; and
Page 24
9.1.10 full provision has been made in the Audited Accounts for all
actual liabilities of the Company outstanding at the Balance
Sheet Date and proper provision (or note) in accordance with
generally accepted accounting principles in South Africa, at the
time they were audited, has been made therein for all other
liabilities of the Company then outstanding, whether contingent,
quantified, disputed or not.
9.2 The Seller acknowledges that the Purchasers are entering into this
Agreement to purchase the Sale Shares and the Ceded Claims in reliance
upon the warranties set out in clause 9.1 above.
9.3 Each of the warranties and representations is applicable as at the
Signature Date and the Closing Date.
10. ANNOUNCEMENTS AND CONFIDENTIALITY
10.1 Subject to clause 10.2, no Party shall make any announcement or
statement about this Agreement or its contents without first having
obtained the prior written consent of the other Parties to the
announcement or statement and to its contents, provided that such
consent may not be unreasonably withheld.
10.2 The provisions of clause 10.1 shall not apply to any announcement or
statement which any of the Parties is obliged to make by virtue of law
or its shares or the shares of its holding company or any of its
subsidiaries being listed on The JSE Securities Exchange South Africa
or any other recognised exchange, provided that the Party in question
shall consult with the other Parties before making any announcement or
statement contemplated in this clause 10.2 and the content of such
announcement or statement will be restricted to that information which
is required to be so disclosed.
10.3 Each Party shall procure that each of its subsidiaries shall, at all
times, use all reasonable endeavours to keep any confidential
information, which it may have acquired in relation to this Agreement,
in confidence, and shall not use
Page 25
or permit the use of such information for any other purpose than
stipulated in this Agreement and shall not disclose such information
to any third party.
11. BREACH
11.1 Should the Seller commit any breach of this Agreement, the Purchasers
shall not be entitled to cancel this Agreement unless the breach is
material and goes to the root of this Agreement and cannot be remedied
adequately by the payment of damages and, being such a breach, is not
remedied or is not capable of being remedied by specific performance
within a reasonable time after the Seller receives written notice from
the Purchasers to remedy the breach.
11.2 Should either of the Purchasers commit any breach of this Agreement,
the Seller shall not be entitled to cancel this Agreement unless the
breach is material and goes to the root of this Agreement and cannot
be remedied adequately by the payment of damages and, being such a
breach, is not remedied or is not capable of being remedied by
specific performance within a reasonable time after the Purchasers
receive written notice from the Seller to remedy the breach.
12. GENERAL
12.1 COMMUNICATIONS BETWEEN THE PARTIES
All notices, demands and other oral or written communications given or
made by or on behalf of any Party to the other Parties shall be in
English.
12.2 REMEDIES
No remedy conferred by this Agreement is intended, unless specifically
otherwise stated, to be exclusive of any other remedy which is
otherwise available at law, by statute or otherwise. Each remedy shall
be cumulative and in addition to every other remedy given hereunder or
now or hereafter
Page 26
existing at law, by statute or otherwise. The election of any one or
more remedy by any of the Parties shall not constitute a waiver by
such Party of the right to pursue any other remedy.
12.3 SEVERANCE
If any provision of this Agreement is rendered void, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and the Parties shall endeavour in good
faith to agree an alternative provision to the void, illegal or
unenforceable provision.
12.4 ENTIRE AGREEMENT
12.4.1 This Agreement (including the Schedules) constitutes the entire
agreement between the Parties in regard to their subject matter.
12.4.2 No Party shall have any claim or right of action arising from any
undertaking, representation or warranty not included in this
Agreement or the Schedules.
12.5 VARIATIONS
No agreement to vary, add to or cancel this Agreement shall be of any
force or effect unless recorded in writing and signed by or on behalf
of both Parties.
12.6 ASSIGNMENT
No Party may delegate any of its obligations under this Agreement.
12.7 GENERAL CO-OPERATION
Each Party shall co-operate with the others and execute and deliver to
the other Parties such other instruments and documents and take such
other actions as may be reasonably requested from time to time in
order to carry
Page 27
out, evidence and confirm their rights and the intended purpose of
this Agreement.
12.8 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Agreement by signing any such counterpart.
12.9 JURISDICTION
The Parties submit themselves to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the High Court of the Republic of
South Africa.
13. ARBITRATION
13.1 Any dispute arising out of this Agreement or the interpretation
thereof, both while in force and after its termination, shall be
submitted to and determined by arbitration. Any Party may demand
arbitration by notice in writing to the other Parties. Such
arbitration shall be held in Johannesburg unless otherwise agreed to
in writing and shall be held in a summary manner with a view to it
being completed as soon as possible.
13.2 There shall be 1 (one) arbitrator who shall be, where the question and
issue is:
13.2.1 primarily an accounting matter, an independent chartered
accountant of 10 (ten) years standing;
13.2.2 primarily a legal matter, a practising Senior Counsel; or
13.2.3 primarily a technical matter, a suitably qualified person.
Page 28
13.3 The appointment of the arbitrator shall be agreed upon between the
Parties in writing but, failing agreement between them, within a
period of 14 (fourteen) days after the arbitration has been demanded
in terms of clause 13.1, any Party shall be entitled to request the
President for the time being of the Law Society of the Northern
Provinces to make the appointment and, in making his appointment, to
have regard to the nature of the dispute.
13.4 The arbitrator shall have the powers conferred upon an arbitrator
under the Arbitration Act, 1965 (as amended), but shall not be obliged
to follow the procedures prescribed in that Act and shall be entitled
to decide on such procedures as he may consider desirable for the
speedy determination of the dispute, and in particular he shall have
the sole and absolute discretion to determine whether and to what
extent it shall be necessary to file pleadings, make discovery of
documents or hear oral evidence.
13.5 The decision of the arbitrator shall be final and binding on the
Parties and may be made an order of any court of competent
jurisdiction. The Parties hereby submit themselves to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa, or any successor thereto, should any Party
wish to make the arbitrator's decision an order of that Court.
14. ADDRESSES FOR LEGAL PROCESS AND NOTICES
14.1 The Parties choose for the purposes of this Agreement the following
addresses and telefax numbers:
14.1.1 the Seller : ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Company Secretary
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
Page 29
14.1.2 the IDC: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
Attn: The Chief Legal Advisor
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
14.1.3 KBH: ERPM Main Office
Cnr Main Reef and Pretoria Road
Boksburg
Attn: The Chief Executive Officer
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
14.1.4 DRD: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Company Secretary
Fax No. ▇▇▇ ▇▇▇ ▇▇▇▇
14.2 Any legal process to be served on any of the Parties may be served on
it at the address specified for it in clause 14.1 and it chooses that
address as its domicilium citandi et executandi for all purposes under
this Agreement.
14.3 Any notice or other communication to be given to any of the Parties in
terms of this Agreement shall be valid and effective only if it is
given in writing, provided that any notice given by telefax shall be
regarded for this purpose as having been given in writing.
14.4 A notice to any Party which is sent by registered post in a correctly
addressed envelope to the address specified for it in clause 14.1
shall be deemed to have been received (unless the contrary is proved)
within 14 (fourteen) days from the date it was posted, or which is
delivered to the Party by hand at that address shall be deemed to have
been received on the day of delivery,
Page 30
provided it was delivered to a responsible person during ordinary
business hours.
14.5 Each notice by telefax to a Party at the telefax number specified for
it in clause 14.1 shall be deemed to have been received (unless the
contrary is proved) within 4 (four) hours of transmission if it is
transmitted during normal business hours of the receiving Party or
within 4 (four) hours of the beginning of the next Business Day after
it is transmitted, if it is transmitted outside those business hours.
14.6 Notwithstanding anything to the contrary in this clause 14, a written
notice or other communication actually received by any Party (and for
which written receipt has been obtained) shall be adequate written
notice or communication to it notwithstanding that the notice was not
sent to or delivered at its chosen address.
14.7 Any Party may by written notice to the other Parties change its
address for the purposes of clause 14.1 to any other address (other
than a post office box number) provided that the change shall become
effective on the 7th (seventh) day after the receipt of the notice.
15. COSTS
15.1 Each Party shall pay its own costs incurred by it to its attorneys and
other professional advisers for the preparation, signing and closing
of this Agreement.
15.2 The Company shall bear the costs of the Competition Commission of
South Africa for the purposes of the sale and purchase of the Sale
Shares under this Agreement.
15.3 The Purchasers shall be liable for any stamp duty payable for the
registration of any transfer of the Sale Shares under this Agreement.
Page 31
16. SPECIAL INDEMNITY UNDERTAKINGS
16.1 KBH hereby unconditionally undertakes to DRD that it will procure the
release fully of DRD from the Security in all its forms within 6 (six)
months of the Closing Date. KBH hereby indemnifies DRD and hold it
harmless against any claim, loss or damages suffered or expense
incurred by the Seller arising from the Security in respect of any
breach by the Company, after the Closing Date, of any agreement which
is the subject matter of the Security for so long as KBH has not
procured the release of DRD from the Security. Notwithstanding the
provisions of this clause 16.1, KBH shall not be liable for any
consequential or indirect losses, expenses or damages suffered by DRD
under this Agreement.
16.2 For the purposes of this clause 16:
16.2.1 "Indemnity" means an indemnity given in terms of
this Agreement;
16.2.2 "Indemnifying Party" means KBH;
16.2.3 "Indemnified Party" means DRD.
16.3 The Indemnified Party shall notify the Indemnifying Party in writing
of any claim which is made against the Indemnified Party and which is
covered by an Indemnity as soon as practicable after the Indemnified
Party has become aware thereof.
16.4 If any claim is made against the Indemnified Party which is covered by
an Indemnity, the Indemnified Party shall, if so required by the
Indemnifying Party in writing, oppose the claim to the extent required
by the Indemnifying Party, provided that:
16.4.1 the Indemnified Party is first furnished with security to its
reasonable satisfaction for the payment of all costs (on an
attorney and client basis) of the opposition to the claim and all
costs which may be
Page 32
awarded against the Indemnified Party as a consequence of the
contesting of the claim;
16.4.2 if the security referred to in clause 16.4.1 is not provided, or
if that security is provided and the opposition to the claim is
unsuccessful or abandoned on the written instructions of the
Indemnifying Party, and if the Indemnifying Party does not
immediately discharge the claim in question, the Indemnified
Party will be entitled to pay the claim and recover the full
amounts so paid from the Indemnifying Party.
16.5 For the purposes of clause 16.4 above, the Indemnifying Party or its
duly authorised representatives shall be entitled to access to the
accounts, records and documents of the Indemnified Party which relate
to the claim in question.
SIGNED at Johannesburg on 12 June 2002
For: CROWN CONSOLIDATED GOLD
RECOVERIES LIMITED
/s/ ▇▇▇▇ Wellesley-Wood
--------------------------------
Signatory: ▇▇▇▇ Wellesley-Wood
Capacity: Director
Authority: Resolution
SIGNED at Sandton on 12 June 2002
For: THE INDUSTRIAL DEVELOPMENT
CORPORATION OF SOUTH AFRICA
LIMITED
/s/ Nam Tshivhase
--------------------------------
Signatory: Nam Tshivhase
Capacity: General Counsel
Authority: General Resolution
Page 33
and
/s/ M. Netshitangani
--------------------------------
Signatory: M. Netshitangani
Capacity: Head of Department
Authority: Resolution
SIGNED at Sandton on 12 June 2002
For: KHUMO BATHONG HOLDINGS
(PTY) LIMITED
/s/ M.P. Ncholo
--------------------------------
Signatory: M.P. Ncholo
Capacity: CEO
Authority: Resolution
SIGNED at Johannesburg on 12 June 2002
For: DURBAN ROODEPOORT DEEP,
LIMITED
/s/ ▇▇▇▇ Wellesley-Wood
--------------------------------
Signatory: ▇▇▇▇ Wellesley-Wood
Capacity: Director
Authority: Resolution
Page 34
SCHEDULE 1
CONTRACTS
1. Loan Facility agreement entered into between Buffelsfontein Gold Mines
Limited and FBCF Equipment Finance (Proprietary) Limited on 17 November 1999,
supported by a separate guarantee and indemnity agreement entered into between
DRD, Blyvooruitzicht Gold Mining Company Limited, Argonaut Financial Services
(Proprietary) Limited, West Witwatersrand Gold Mines Limited, the Company and
BOE Bank Limited (BOE Merchant Bank division).
2. International Bullion Master Agreement entered into between Chase Manhattan
Bank and DRD on 2 November 1998 for spot and forward traders and bullion
options.
Page 35
SCHEDULE 1A
DRD GROUP CONTRACTS
1. Toll Milling Contract entered into between DRD and CGR to treat Fleurhof
Material at Rand Lease Plant for CGR at the cost of R1, 20 per ton.
2. Management services agreement entered into between the Company and DRD.
Page 36
SCHEDULE 2
SURETYSHIPS AND GUARANTEES OF DRD
1. Suretyship in favour of the IDC for R25 000 000 (twenty five million Rand)
signed on 8 June 1999
2. Suretyship in favour of SCMB for R4 000 000 (four million Rand) signed on
25 October 2000.
Page 37
SCHEDULE 3
SHAREHOLDERS' AGREEMENT
SCHEDULE 3 TO THE
SHARE PURCHASE AGREEMENT
SHAREHOLDERS' AGREEMENT
between:
THE INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LIMITED
and
KHUMO BATHONG HOLDINGS (PROPRIETARY) LIMITED
and
CROWN CONSOLIDATED GOLD RECOVERIES LIMITED
and
CROWN GOLD RECOVERIES (PROPRIETARY) LIMITED
and
DURBAN ROODEPOORT DEEP, LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇
Telephone : (▇▇▇) ▇▇▇ ▇▇▇▇
Fax : (▇▇▇) ▇▇▇ ▇▇▇▇
Page 2
TABLE OF CONTENTS
1. INTERPRETATION..........................................................3
2. CONDITION PRECEDENT....................................................11
3. COMPANY BUSINESS.......................................................11
4. CORPORATE REQUIREMENTS.................................................11
5. DIVIDEND POLICY........................................................12
6. CAPITAL AND FURTHER FINANCE............................................13
7. WAREHOUSING ARRANGEMENT................................................15
8. OBLIGATIONS OWED TO DRD................................................20
9. OBLIGATIONS OWED BY DRD................................................21
10. DIRECTORS AND MANAGEMENT...............................................21
11. RESERVED MATTERS.......................................................23
12. FINANCIAL MATTERS......................................................26
13. INFORMATION AND REPORTING..............................................27
14. CONFIDENTIALITY........................................................28
15. REGULATORY MATTERS.....................................................30
16. TRANSFER OF SHARES.....................................................31
17. FURTHER ASSURANCES.....................................................37
18. ANNOUNCEMENTS..........................................................37
19. ENTIRE AGREEMENT.......................................................38
20. CONFLICT WITH MEMORANDUM AND ARTICLES..................................38
21. DURATION...............................................................39
22. NOTICES................................................................40
23. ARBITRATION............................................................42
24. GENERAL................................................................43
SCHEDULES
1. SCHEDULE 1: DEFINITION OF "IRR"
2. SCHEDULE 2: BASIS OF INTEREST COVER
3. SCHEDULE 3: PROPOSED BUSINESS PLAN
Page 3
WHEREAS:
A. The IDC and KBH are desirous of purchasing 57% (fifty seven per cent) and
3% (three per cent), respectively, of the issued share capital of the
Company and CCGR is desirous of selling 57% (fifty seven per cent) of the
issued share capital of the Company to the IDC and 3% (three per cent) of
the issued share capital of the Company to KBH, in terms of the
Share
Purchase Agreement. CCGR intends retaining 40% (forty per cent) of the
issued share capital of the Company upon completion of the
Share Purchase
Agreement.
B. The Parties are entering into this Agreement in order to establish the
manner in which the Company is to be managed and to set out the terms
governing the relationship of the IDC, KBH and CCGR as shareholders in the
Company.
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, and the preamble, unless the
context requires otherwise, the words and expressions set out below
shall have the meanings assigned to them, namely:
1.1.1 "this Agreement" means this shareholders' agreement and
all its Schedules;
1.1.2 "Affiliate" means with respect to any person, any
other person directly or indirectly
holding at least 30% (thirty per cent)
of the ordinary issued share capital
of that person;
1.1.3 "Board" means the board of Directors or any
duly
Page 4
appointed committee thereof from time
to time;
1.1.4 "Budget" means a budget for the Company for a
particular Financial Year in a format
approved from time to time by the
Board;
1.1.5 "Business Day" means any day other than a Saturday,
Sunday or statutory holiday in South
Africa;
1.1.6 "Business Plan" means an ongoing business plan for the
Company commencing with the Initial
Business Plan, including the business
plans of the Company drawn by the
Directors for the succeeding Financial
Years;
1.1.7 "CCGR" means Crown Consolidated Gold
Recoveries Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1997/007865/06;
1.1.8 "CCGR Directors" means the Directors appointed by CCGR
from time to time;
1.1.9 "CCGR Loan" means all the non-interest bearing
loans made by the Company to DRD and
thus owing by DRD to the Company as at
the Completion Date;
1.1.10 "CCGR's Shares" means the 40 (forty) Shares,
constituting 40% (forty per cent) of
the issued share capital of the
Company, held by CCGR as at the
Completion Date, together with any
other Shares held by CCGR from time to
time;
Page 5
1.1.11 "Cession Agreement" means the cession agreement as defined
in the
Share Purchase Agreement;
1.1.12 "Chairman" means the chairman from time to time
of the Board;
1.1.13 "Companies Act" means the Companies ▇▇▇, ▇▇▇▇, as
amended;
1.1.14 "the Company" means Crown Gold Recoveries
(Proprietary) Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1988/005115/07;
1.1.15 "Completion Date" means the date on which the condition
precedent referred to in clause 2.1 is
fulfilled;
1.1.16 "Directors" means directors of the Company from
time to time;
1.1.17 "DRD" means Durban Roodepoort Deep, Limited,
a company registered in accordance
with the laws of South Africa under
Registration Number 1895/000926/06;
1.1.18 "DRD Loan" means the unsecured loan note, which
as at the Signature Date has a face
value of R37 716 875 (thirty seven
million seven hundred and sixteen
thousand and eight hundred and seventy
five Rand), which was issued by the
Company to CCGR (evidencing the
indebtedness of the Company to CCGR)
and ceded to DRD and bears interest at
the Prime Rate plus 25% (twenty five
per cent) of the Prime Rate;
Page 6
1.1.19 "Executive Directors" means any of the Directors who are
employed by the Company or seconded to
the Company, as the case may be, in a
managerial capacity;
1.1.20 "Existing GNB" means the general notarial covering
bond registered on 13 September 1999
under registration number BN25326/1999
by the Company in favour of the IDC in
the amount of R25 000 000 (twenty five
million Rand) over the assets of the
Company;
1.1.21 "Fair Price" means the open market value of the
relevant Shares between a willing
seller and a willing third party buyer
at the date of the Transfer Notice (as
defined in clause 16.6) without any
premium or discount by reference to
the percentage of the Shares being
sold or transferred;
1.1.22 "Financial Year" means a financial period of the
Company (commencing, other than in the
case of its initial financing period,
on 1 July and ending on 30 June of
each year);
1.1.23 "the IDC" means The Industrial Development
Corporation of South Africa Limited, a
company registered in accordance with
the company laws of South Africa under
Registration Number 1940/014201/06;
1.1.24 "IDC Directors" means the Directors appointed by the
IDC from time to time;
Page 7
1.1.25 "IDC Investment" means the IDC Shares and the IDC Loan
from time to time;
1.1.26 "IDC Loan" means the IDC's shareholder loan
against the Company as set out in
clause 6.3.1;
1.1.27 "IDC Shares" means the 57 (fifty seven) Shares,
constituting 57% (fifty seven per
cent) of the issued share capital of
the Company, held by the IDC as at the
Completion Date, together with any
other Shares held by the IDC from time
to time;
1.1.28 "Initial Business Plan" means the proposed business plan
attached to this Agreement as
Schedule 3;
1.1.29 "IRR" means the real after tax internal rate
of return calculated in accordance
with the methodology contained in
Schedule 1 to this Agreement;
1.1.30 "IRR Certificate" means the certificate furnished by the
IDC to the other Parties in terms of
clause 7.5.5.6;
1.1.31 "KBH" means Khumo Bathong Holdings
(Proprietary) Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1998/007564/07;
1.1.32 "KBH Directors" means the Directors appointed by KBH
from time to time;
1.1.33 "KBH Shares" means the 3 (three) Shares,
constituting 3% (three per cent) of
the issued share capital of the
Company, held by KBH as at the
Page 8
Completion Date together with any
other Shares held by KBH from time to
time;
1.1.34 "Loan Account" in relation to a Shareholder, means
its loan account for shareholder loans
made to the Company by it and by any
company which is a Member of the Same
Group as it;
1.1.35 "Member of the Same Group" means in relation to any Party, any
company which is its subsidiary
company, holding company or Affiliate;
1.1.36 "Memorandum and Articles" means the memorandum and articles of
association of the Company for the
time being and as amended from time to
time;
1.1.37 "Non-Executive Directors" means any of the Directors who are not
employed by the Company or seconded to
the Company, as the case may be, in a
managerial capacity;
1.1.38 "Parties" means the IDC, KBH, CCGR and the
Company and "Party" means any one of
them;
1.1.39 "Prime Rate" shall mean the publicly quoted basic
rate of interest generally charged by
The Standard Bank of South Africa
Limited from time to time in South
Africa on overdraft to its first class
corporate borrowers, calculated on a
365 (three hundred and sixty five) day
factor, irrespective of whether or not
the year in question is a leap year,
it being recorded that a certificate
signed by any manager of The Standard
Bank of South Africa Limited
Page 9
(whose appointment it shall not be
necessary to prove) shall constitute
prima facie proof of the ruling prime
rate at the relevant time in the event
of there being a dispute in relation
thereto;
1.1.40 "Reserved Matters" means the matters set out in clause
11.2;
1.1.41 "Security Interest" means any mortgage, pledge, lien
(other than a lien arising by
operation of law), right of set-off,
encumbrance or any security interest
whatsoever, howsoever created or
arising, including any analogous
security interest under the law of
South Africa;
1.1.42 "
Share Purchase Agreement" means the
share purchase agreement
entered into between the IDC, KBH,
CCGR and DRD simultaneously with the
signing of this Agreement and to which
this Agreement is attached as
Schedule 3;
1.1.43 "Shareholders" means the IDC, KBH and CCGR (and
"Shareholder" shall mean any one of
them) and any other party which holds
Shares and has become a signatory to
this Agreement;
1.1.44 "Shares" means the ordinary shares of R1 (one
Rand) each in the issued share capital
of the Company;
1.1.45 "Signature Date" means the last date on which this
Agreement is signed by the Parties;
and
1.1.46 "South Africa" means the Republic of South Africa as
constituted from time to time.
Page 10
1.2 GENERAL INTERPRETATION
In addition to the definitions in clause 1.1, unless the context
requires otherwise:
1.2.1 the singular shall include the plural and vice versa;
1.2.2 a reference to any one gender, whether masculine, feminine or
neuter, includes the other two;
1.2.3 any reference to a natural person includes an artificial person
and vice versa;
1.2.4 a cognate word or expression shall have a corresponding meaning;
1.2.5 words and expressions defined in the Companies Act, which are not
defined in this Agreement, shall bear the same meanings in this
Agreement as those ascribed to them in the Companies Act;
1.2.6 references to a statutory provision include any subordinate
legislation made from time to time under that provision, and
include that provision as from time to time modified or
re-enacted as far as such modification or re-enactment applies,
or is capable of applying, to this Agreement or any transaction
entered into in accordance with this Agreement;
1.2.7 references to "this Agreement" include its Schedules, and
references in this Agreement to "clauses" and "Schedules" are to
clauses and schedules of this Agreement; and
1.2.8 where an obligation pursuant to this Agreement is expressed to be
undertaken or assumed by any Party, such obligation shall be
construed as requiring the Party concerned to exercise all rights
and powers of control over the affairs of any other person which
that Party is able to exercise (whether directly or indirectly)
in order to secure performance of that obligation.
Page 11
2. CONDITION PRECEDENT
2.1 The whole of this Agreement (except for this clause 2 and clauses 1,
14, 18, 22, 23 and 24) shall be subject to the condition precedent
that the
Share Purchase Agreement is duly entered into by all the
parties to that agreement and that all the conditions precedent to
which it is subject are fulfilled, or deemed to be fulfilled, and that
it accordingly takes effect and is duly carried into effect and
completed in accordance with its terms.
2.2 If the condition precedent referred to in clause 2.1 is not fulfilled,
then this Agreement (except for this clause 2 and clauses 1, 14, 18,
22, 23 and 24) shall not take effect unless otherwise agreed upon in
writing by the Parties. If this Agreement (except for this clause 2
and clauses 1, 14, 18, 22, 23 and 24) does not take effect in
accordance with the provisions of this clause 2, no Party shall have
any claim against any other of any nature whatsoever arising from the
provisions of this Agreement.
2.3 The Parties shall use their reasonable endeavours to do whatever may
be necessary to procure the fulfilment of the condition precedent and
shall co-operate fully with each other for that purpose.
3. COMPANY BUSINESS
The business of the Company is the re-treatment of sand dumps, slime dumps
and archive material deposits.
4. CORPORATE REQUIREMENTS
4.1 The Parties agree that:
Page 12
4.1.1 the name of the Company shall remain Crown Gold Recoveries
(Proprietary) Limited;
4.1.2 the Company's auditors are Deloitte & Touche;
4.1.3 the bankers of the Company are the Standard Bank of South Africa
Limited;
4.1.4 the registered office of the Company shall be at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇;
4.1.5 the Company's financial year end shall be 30 June in each year;
and
4.1.6 the secretary of the Company shall be ▇▇▇▇▇▇ ▇▇▇▇▇ or such other
person as may be nominated by DRD from time to time in accordance
with the provisions of the management services agreement referred
to in clause 8.4.
4.2 Each of the Parties undertakes to the other that it will do everything
within its powers to carry out all the matters referred to in clause
4.1, including the convening and holding of all the necessary meetings
of the Board and the Company, the passing of all necessary resolutions
at those meetings and the filing of all documents and forms which are
required to be filed with the Registrar of Companies in terms of the
Companies Act for the purposes of or to give effect to those
resolutions and the Shareholders shall exercise their votes as
shareholders in the Company to that end.
5. DIVIDEND POLICY
The Company and each of the Shareholders acknowledge to one another that
the Company shall, unless otherwise decided by the Board, and provided that
the majority shall always include the IDC Director for so long as the IDC
is a Shareholder, and subject to applicable laws, declare an annual
dividend of a minimum of 30% (thirty per cent) of the net profits of the
Company after interest and tax.
Page 13
6. CAPITAL AND FURTHER FINANCE
6.1 The authorised share capital of the Company as at the Signature Date
is R4 000 (four thousand Rand) comprising 4 000 (four thousand)
ordinary par value shares of R1 (one Rand) each and the initial issued
share capital of the Company as at the Completion Date shall be R100
(one hundred Rand) comprising 100 (one hundred) Shares of which:
6.1.1 40% (forty per cent) will be held by CCGR;
6.1.2 3% (three per cent) will be held by KBH; and
6.1.3 57% (fifty seven per cent) will be held by the IDC.
6.2 The issued share capital of the Company may from time to time be
increased to such an extent as shall be mutually agreed between the
Parties in accordance with this clause 6.
6.3 The Parties record that, as at the Completion Date, the Shareholders
will have the following claims against the Company:
6.3.1 a shareholder loan by the IDC to the Company of R108 360 486.00
(one hundred and eight million three hundred and sixty thousand
and four hundred and eighty six Rand), bearing interest at the
Prime Rate plus 15% (fifteen per cent) of the Prime Rate
calculated monthly in arrear with effect from the Completion Date
and repayable over 60 (sixty) months in equal monthly instalments
on the 15th (fifteenth) day of each month commencing on 15 August
2002, but subject to the warehousing arrangements set out in
clause 7. This shareholder loan shall be secured by the Existing
GNB and, as further security for this shareholder loan, the
Company shall register a general notarial covering bond in favour
of the IDC, on terms acceptable to the IDC, up to the amount of
R45 000 000.00 (forty five million Rand) over all the
Page 14
movable assets of the Company as contemplated in the Share
Purchase Agreement;
6.3.2 a shareholder loan by CCGR to the Company of R76 042 446.40
(seventy six million forty two thousand and four hundred and
forty six Rand and forty cents), bearing interest at the Prime
Rate plus 25% (twenty five percent) of the Prime Rate calculated
monthly in arrear with effect from the Completion Date and
repayable over 84 (eighty four) months in equal monthly
instalments on the 15th (fifteenth) day of each month commencing
on 15 August 2002. The Parties record that the payment of
interest shall be subject to the Company maintaining a monthly
interest cover ratio on the basis set out in Schedule 2 failing
which the Company shall not be liable to make the interest
payment for that month and the accrued interest will not be
capitalised but will be carried over into and be payable in the
subsequent month or months, as the case may be, subject to the
provisions of Schedule 2; and
6.3.3 KBH shall have a shareholder loan against the Company of R5 703
183.00 (five million seven hundred and three thousand one hundred
and eighty three Rand). This shareholder loan shall bear interest
at the Prime Rate and has no fixed repayment terms and is
repayable on demand.
6.4 The Parties agree that, in the event of any conflict between the terms
of the shareholder loans set out in clause 6.3, and any agreement
entered into by the Company prior to the Completion Date for the
purposes of borrowing such shareholder loans, the terms set out in
clause 6.3 shall prevail.
6.5 Notwithstanding anything to the contrary anywhere else in this
Agreement, none of the Shareholders undertake to provide any loan or
share capital to the Company nor to give any guarantee or indemnity in
respect of any of the Company's liabilities or obligations. Without
detracting from this clause in any way, the Shareholders record that
any further capital required by the Company from time to time and
which they may agree to provide, will be provided by them as agreed
between them.
Page 15
6.6 Where the Shareholders agree to provide any further capital by way of
a loan then, unless otherwise agreed in writing by the Shareholders,
the indebtedness of the Company incurred in respect of the loans shall
be subject to terms as approved by the Board.
7. WAREHOUSING ARRANGEMENT
7.1 The Parties record that it is their intention that the IDC shall not
remain a Shareholder of the Company indefinitely but shall transfer
the IDC Investment to KBH, simultaneously with the discharge of the
IDC Loan by KBH to the IDC, in accordance with the provisions of this
clause 7. Accordingly, the Parties agree with each other that KBH
shall, at all times, have the right to repay to the IDC, the IDC Loan
on behalf of the Company subject to the provisions of this clause 7
and the Company shall be deemed to have discharged all its obligations
to the IDC in this regard upon such repayment of the IDC Loan. A
certificate issued by an authorised officer of the IDC shall be prima
facie evidence of the amount owing under the IDC Loan and the Early
Purchase Amount (as defined in 7.4), and shall be provided by the IDC
to KBH within 10 (ten) Business Days of receipt of written notice to
do so, prior to the exercise of the KBH Special Option referred to in
clause 7.2. If any Party disputes the amount owing under the IDC Loan
and/or the Early Purchase Amount, such dispute shall be referred, at a
cost to be shared equally between KBH and the IDC, to a firm of
independent auditors to be agreed by the IDC, KBH and the Company
within 3 (three) Business Days of the dispute so arising, failing
which an internationally recognised independent firm of auditors
nominated by the president for the time being of the South African
Institute of Chartered Accountants upon request by any of the IDC, KBH
or the Company. Any firm of auditors appointed in terms of this clause
7.1 shall make its determination acting as experts and its
determination shall be final and binding on the Parties.
7.2 Notwithstanding any provision to the contrary in this Agreement, the
IDC hereby grants to KBH, which hereby accepts, a call option to
purchase the
Page 16
entire IDC Investment (hereinafter referred to as the "KBH Special
Option") upon the terms and subject to the conditions set out in
clauses 7.3 to 7.5.9 below and each of the other Parties, other than
the IDC and KBH, hereby consents to the IDC granting to KBH the KBH
Special Option and waives any pre-emptive rights which it may have in
regard to the Shares which constitute the subject matter of the KBH
Special Option.
7.3 The KBH Special Option may be exercised by KBH by notice in terms of
clause 7.4 at any time but not later than 16h00 of the last Business
Day of the 60th (sixtieth) month from the Completion Date whereafter
the KBH Special Option will lapse.
7.4 KBH shall exercise the KBH Special Option by written notice (the "KBH
Election Notice") to the IDC, with a copy to the other Parties, at any
time and on any day but always in accordance with the time period set
out in clause 7.3 above, specifying the number of IDC Shares (which
shall be equivalent to all the Shares then held by the IDC) and the
amount of the IDC Loan (which shall be equivalent to the amount then
outstanding on the IDC Loan in terms of clause 7.1) which KBH wishes
to discharge on behalf of the Company in terms of clause 7.1, plus the
amount payable by KBH to the IDC, which is equivalent to an IRR of 15%
(fifteen per cent) on the IDC Investment which will be payable by KBH
to the IDC if the IDC Investment has not yielded an IRR of 11% (eleven
per cent) prior to the repayment of the IDC Loan ("Early Purchase
Amount").
7.5 If KBH exercises the KBH Special Option to purchase all of the IDC
Shares and the balance of the IDC Loan in terms of this clause 7, then
the sale and purchase of the IDC Investment to KBH, which would
result, shall be on the following terms and conditions:
7.5.1 the IDC Investment shall be sold and purchased free from all
claims, liens, pledges and other hypothecations and encumbrances;
Page 17
7.5.2 the purchase price payable by KBH for the IDC Shares shall be the
par value for each of the IDC Shares and shall be payable in
South African Rand only;
7.5.3 the effective date of the purchase and sale of the IDC Investment
shall be the date and time specified by KBH and the Company under
clause 7.5.5;
7.5.4 the consideration for the IDC Loan shall be the face value of the
IDC Loan as at the date referred to in clause 7.5.3 and, if
applicable, the Early Purchase Amount;
7.5.5 completion of the sale and purchase of the IDC Investment shall
be effected within 10 (ten) Business Days of receipt by the IDC
of the KBH Election Notice (or as soon thereafter as any
necessary regulatory consents have been obtained and subject to
compliance by the IDC with its obligations under this clause 7),
at a meeting to be held at such reasonable time, date and place
as KBH and the Company may specify by not less than 36 (thirty
six) hours' prior written notice to the IDC and the other Parties
and at which meeting:
7.5.5.1 the IDC shall deliver the relevant share certificate(s) to
KBH or any nominee(s) for KBH, together with such duly
executed transfer forms as may be required by law for the
transfer of the IDC Shares to KBH or any nominee(s) for KBH,
and a power of attorney in such form and in favour of such
person as KBH may nominate so as to enable KBH to exercise
all rights of ownership in respect of the IDC Shares,
including, without limitation, the voting rights thereto;
7.5.5.2 KBH shall pay the purchase price for the IDC Investment to
the IDC by a telegraphic transfer for value on the date of
completion, in terms of this clause 7.5.5, but only against
such delivery of the IDC Shares and a letter of cession by
the IDC to
Page 18
KBH of all of the IDC's claims against the Company in
respect of the IDC Loan;
7.5.5.3 the IDC and KBH shall procure (insofar as they are able)
that such transfer or transfers are duly registered;
7.5.5.4 the IDC shall do all such other things and execute all such
other documents as KBH may require to give effect to the
sale and purchase of the IDC Shares; and
7.5.5.5 the IDC shall, simultaneously with the completion of the
sale and purchase of the IDC Shares, remove the Directors
appointed by it and such removal shall take effect without
any liability to the Company for compensation for loss of
office, loss of employment or otherwise; and
7.5.5.6 the IDC shall furnish KBH and the other Parties with a
certificate ("the IRR Certificate") which shall:
7.5.5.6.1 state the IRR yielded by the IDC Investment and
received by the IDC as at the date of the issuance of
the IRR Certificate;
7.5.5.6.2 confirm the Early Purchase Amount, if any, which KBH is
to pay to the IDC and which was stated in the
certificate issued by an authorised officer of the IDC
in terms of clause 7.1,
which IRR Certificate shall be prima facie evidence of the
Early Purchase Amount;
7.5.6 each of KBH and the IDC use their reasonable endeavours (costs to
be shared equally by both these Parties) to obtain any regulatory
consents that are required by law to enable the sale and purchase
of the IDC Shares to be completed; if such consents are refused
the
Page 19
purchase and sale shall become void and the IDC and KBH shall be
released from their obligations under this clause 7 but they
shall negotiate with each other in good faith with a view to
achieving an alternative solution;
7.5.7 simultaneously with the completion of a sale and purchase of the
IDC Shares:
7.5.7.1 the IDC shall procure that the IDC's obligations for all
loans, loan capital, borrowings and indebtedness in the
nature of borrowings owed to the Company by the IDC
(together with any accrued interest) are either delegated by
the IDC to KBH at such value as may be agreed between the
IDC and KBH, or failing agreement between them, are repaid
by the IDC to the Company;
7.5.7.2 KBH shall agree to the assignment to it of all rights and
obligations under any guarantees or indemnities given by the
IDC to or in respect of the Company and, pending such
assignment and consequent release of the IDC, shall
indemnify the IDC in respect thereof.
7.5.8 the IDC's obligation to transfer the IDC Shares to KBH in terms
of this clause 7 shall be conditional on the compliance by KBH
with its obligations under clause 7.5.7.2; and
7.5.9 notwithstanding anything to the contrary anywhere else in this
clause 7, the IDC shall be obliged to cede to KBH, and KBH shall
be obliged to acquire from the IDC, the whole of the IDC Loan at
the same time as the IDC Shares are transferred to KBH.
7.6 If any dispute arises in respect of the amounts stated in the IRR
Certificate under clause 7.5.5.6, the Party raising the dispute shall
deal with such dispute in accordance with the dispute resolution
mechanism set out in clause 7.1.
Page 20
8. OBLIGATIONS OWED TO DRD
8.1 The Company and each of the Shareholders acknowledge to one another
and to DRD and hereby record that the Company is indebted to DRD to
the extent of the DRD Loan.
8.2 The Parties agree that from the Completion Date, the DRD Loan will
bear interest at the Prime Rate plus 25% (twenty five per cent) of the
Prime Rate, which interest will be payable annually in arrear on each
anniversary of the Completion Date and the DRD Loan will be repayable
within 7 (seven) years of the Completion Date.
8.3 The Company and each of the Shareholders acknowledge to one another
and to DRD and record that the agreement between DRD and Rand Refinery
Limited dated 12 October 2001 will not be affected by this Agreement.
8.4 The Company and each of the Shareholders acknowledge to one another
and to DRD and record that the existing management services agreement
between the Company and DRD is being renegotiated and amended on terms
and conditions which are satisfactory to all the Parties and will be
concluded within 60 (sixty) days of the Completion Date.
8.5 Each of the Parties acknowledge the existence of a loan owed by the
Company to DRD in the capital amount of R875 000 (eight hundred and
seventy five thousand rands) which loan is unsecured, has been bearing
interest from 13 November 2001 at the Prime Rate plus 15% (fifteen
percent) of the Prime Rate payable annually in arrears on the 3rd
(third) Business Day after each anniversary of that date, and the
capital amount of which is repayable within 3 (three) years of that
date.
Page 21
9. OBLIGATIONS OWED BY DRD
The Company hereby cedes, assigns and makes over to CCGR all the rights
against DRD owing from the CCGR Loan for a total consideration of R1 (one
Rand) with effect from the Completion Date in accordance with the Cession
Agreement.
10. DIRECTORS AND MANAGEMENT
10.1 From the Completion Date until such date as the Shareholders will
determine, the Board shall consist of 5 (five) Directors. Subject to
the foregoing and the rights of IDC, KBH and CCGR under this
Agreement, the number of Non-Executive Directors and Executive
Directors shall be determined from time to time by the Shareholders.
10.2 From the Completion Date until such time as IDC ceases to be a
Shareholder, the IDC shall have the right to appoint 1 (one) IDC
Director, KBH shall have the right to appoint 2 (two) KBH Directors
and CCGR shall have the right to appoint 2 (two) CCGR Directors. If
IDC ceases to be a Shareholder, as soon as reasonably possible after
the event, the Board shall be reconstituted so that it comprises 3
(three) KBH Directors and 2 (two) CCGR Directors appointed by the
remaining Shareholders in terms of this clause 10.2.
10.3 Any appointment or removal of a Director appointed by a Shareholder
shall be effected by notice in writing to the Company signed by or on
behalf of the Shareholder in question and shall take effect, subject
to any contrary intention expressed in the notice, when the notice
effecting the same is delivered to the Company. Any such removal shall
be without prejudice to any claim which a Director so removed may have
under any contract between him and the Company, provided that (in the
case of a claim made by a Director in respect of such removal) the
Shareholder so removing such Director shall indemnify the Company in
respect of any liability arising in respect of such removal. Each
Shareholder shall consult with the other Shareholders prior to any
appointment or removal of a Director.
Page 22
10.4 The quorum for the transaction of business at any meeting of the Board
(other than an adjourned meeting) shall be at least the IDC Director
(for so long as the IDC is a Shareholder), 1 (one) KBH Director and at
least 1 (one) CCGR Director present at the time when the relevant
business is transacted. If such a quorum is not present within 30
(thirty) minutes from the time appointed for the meeting or if during
the meeting such a quorum ceases to be present, the meeting shall be
adjourned for 7 (seven) Business Days and at that adjourned meeting
any Director shall be regarded as present for the purposes of a quorum
if represented by an alternate director in accordance with clause
10.6. Directors may participate in a meeting of the Board by means of
conference telephone or similar equipment by means of which all
persons participating in the meeting can hear each other, and any such
participation in a meeting shall constitute presence in person at the
meeting.
10.5 At least 7 (seven) days' written notice shall be given to each of the
members of the Board of any meeting of the Board, provided always that
a shorter period of notice may be given with the written approval of
at least the IDC Director, 1 (one) KBH Director (or his alternate) and
at least 1 (one) CCGR Director (or his alternate). Any such notice
shall contain, inter alia, an agenda identifying in reasonable detail
the matters to be discussed at the meeting and shall be accompanied by
copies of any relevant papers to be discussed at the meeting. Any
matter which is to be submitted to the Board for a decision and which
is not identified in reasonable detail as aforesaid shall not be
decided upon, unless otherwise agreed in writing by all of the members
of the Board.
10.6 Matters for decision by the Board shall (subject to clause 10.4) be
decided by simple majority vote. Each Director shall have 1 (one)
vote. Any KBH Director or CCGR Director who is absent from any meeting
may nominate any other KBH Director or CCGR Director, as the case may
be, to act as his alternate and to vote in his place at the meeting.
If KBH or CCGR is not represented at any meeting of the Board by all
the Directors appointed by it (whether present in person or by
alternate so nominated by it to the Board), then 1 (one) of the
Directors so present appointed by it shall be entitled at that meeting
to such additional vote or votes as shall result in the Directors so
Page 23
present representing it having, subject to clause 10.4, in aggregate
such number of votes as will be equal to the number of votes such
Directors would have had, had such absent Directors been present. The
IDC Director, if absent from any meeting, may nominate any person
(including another Director) to act as his alternate and to vote in
his place at the meeting.
10.7 Any decision required or permitted to be taken at any meeting of the
Board, or any committee thereof, may be taken without a meeting if all
Directors consent thereto in writing.
11. RESERVED MATTERS
11.1 The Parties shall use their respective powers to procure, in so far as
they are legally able to do so, that no action or decision relating to
any of the Reserved Matters shall be taken, whether by the Board, the
Company or any subsidiary of the Company or any of the officers or
managers within the Company (as the case may be), without the prior
approval of CCGR (for Shareholder matters) or a CCGR Director (for
Board matters) for so long as CCGR is a Shareholder.
11.2 The Reserved Matters are the following:
11.2.1 MEMORANDUM AND ARTICLES - the adoption of or any alteration to
the Memorandum and Articles or other constitutional documents of
the Company;
11.2.2 CHANGES IN SHARE CAPITAL - any increase, alteration or reduction
in the authorised or issued share capital of the Company or any
increase or reduction by the Company in its shareholding in any
other company;
11.2.3 CHANGE IN THE NATURE OF BUSINESS - any material change in the
nature or scope of the business as set out in the memorandum of
association of the Company;
Page 24
11.2.4 BORROWINGS - after the expiry of the 7 (seven) year period from
the Completion Date, the borrowing or raising of money by the
Company or any of its subsidiary companies (which shall include
the entry into of any finance lease but shall exclude normal
trade credit) which would result in the aggregate borrowing of
the Company exceeding R500 000 (five hundred thousand Rand) or
such other amount as the Shareholders shall from time to time
agree;
11.2.5 CAPITAL EXPENDITURE - capital expenditure by the Company or any
of its subsidiary companies in respect of any item or project in
excess of R500 000 (five hundred thousand Rand) or such other
amount as the Shareholders shall from time to time agree;
11.2.6 ACQUISITIONS AND SHARE PURCHASES - any acquisition or share
purchase (whether in a single transaction or a series of
transactions) by the Company or any of its subsidiary companies
of any business or any material part of any business or of any
shares in any company where the value of the acquisition or share
purchase exceeds R100 000 (one hundred thousand Rand);
11.2.7 MATERIAL LITIGATION - major decisions relating to the conduct
(including the settlement) of legal proceedings to which the
Company or any of its subsidiary companies is a party where the
potential liability or claim is in excess of R100 000 (one
hundred thousand Rand);
11.2.8 MANAGEMENT SERVICES AGREEMENT - cancellation by the Company of
the management agreement entered into between DRD and the Company
in accordance with clause 8.4.
11.2.9 ENCUMBRANCES - the creation of a mortgage, charge, encumbrance or
other Security Interest of whatever nature in respect of all or
any material part of the undertaking, property or assets of the
Company or any of its subsidiary companies;
Page 25
11.2.10 WINDING-UP - any proposal that the Company or any of its
subsidiary companies be wound-up;
11.2.11 AUDITORS - a change in the auditors of the Company;
11.2.12 SHARE SCHEME - any proposal that any bonus or profit-sharing
scheme or any share option or share incentive scheme or employee
share trust or share ownership plan be adopted;
11.2.13 PARTNERSHIP OR JOINT VENTURE - any proposal that the Company
enters into any partnership or joint venture with any third
party, excluding (in so far as it may be necessary to do so)
joint working arrangements with third parties for the provision
of the Company's services for a particular contract or project in
the ordinary and regular course of its business;
11.2.14 MERGER - any proposal that the Company merges with any other
company or corporate body or merge the Company's business with
that of any other person;
11.2.15 DISPOSAL OR DILUTION - any proposal that there be a disposal of
or dilution of the Company's interests, directly or indirectly,
in any subsidiary companies it may have from time to time;
11.2.16 LISTING - any proposal that a listing be obtained for the Shares
on any stock exchange;
11.2.17 PREJUDICIAL TRANSACTIONS - anything which to the knowledge of any
Shareholder would prejudice or could be reasonably expected to
prejudice, to a material extent, any benefits available to a
Shareholder.
11.3 The approval by CCGR of any of the Reserved Matters or to any
variation thereof shall be given either in writing by the authorised
representative of CCGR for this purpose or by the representatives of
CCGR at a general meeting of the Company.
Page 26
11.4 General meetings of Shareholders shall take place in accordance with
the applicable provisions of the Memorandum and Articles on the basis,
inter alia, that:
11.4.1 a quorum shall be the duly authorised representative of the IDC
(for so long as the IDC is a Shareholder), 1 (one) duly
authorised representative of KBH and 1 (one) duly authorised
representative of CCGR;
11.4.2 the notice of meeting shall, unless otherwise agreed by each of
the Shareholders, set out an agenda identifying in reasonable
detail the matters to be discussed;
11.4.3 the chairman of any such meeting shall not have a casting vote;
and
11.4.4 subject to the provisions of clause 11.1, a decision to approve
any of the Reserved Matters shall require the vote of CCGR.
11.5 Any matters requiring a general meeting of or approval by the
Shareholders under relevant corporate laws, but not covered by the
Reserved Matters, shall be dealt with in accordance with the
Memorandum and Articles.
11.6 If a deadlock arises by reason of failure by the Shareholders to reach
agreement on any of the Reserved Matters or any other management
matter requiring decision by the Shareholders, the procedure set out
in clause 23 shall be followed by the Shareholders. Each Shareholder
shall endeavour to resolve any disagreements in the best interests of
the Company.
12. FINANCIAL MATTERS
12.1 The Company shall, in relation to its financial statements, continue
with the accounting principles applied by the Company as at the
Completion Date.
Page 27
12.2 The auditors of the Company shall be Deloitte & Touche or such other
firm of chartered accountants of recognised international standing as
may be agreed between the Parties from time to time.
12.3 The financial year of the Company shall commence on 1 July and
terminate on 30 June of each year, unless otherwise agreed by the
Parties.
13. INFORMATION AND REPORTING
13.1 Each of the Shareholders shall be entitled to examine the separate
books, records and accounts kept by the Company and to be supplied
with all information, including monthly management accounts and
operating statistics and other trading and financial information, to
keep each Shareholder properly informed about the business and affairs
of the Company.
13.2 The Company shall supply each of the Shareholders in any event and
without prejudice to the generality of clause 13.1 with copies of:
13.2.1 audited consolidated accounts for the Company complying with all
relevant legal requirements;
13.2.2 a Business Plan and itemised revenue and capital Budgets for each
Financial Year covering each principal division of the Company
and showing proposed trading and cash flow figures, ▇▇▇▇▇▇▇
levels and all material proposed acquisitions and other
commitments for such Financial Year; and
13.2.3 monthly management accounts of each principal division of the
Company, such accounts to include, inter alia, a consolidated
profit and loss account, balance sheet and cash flow statement
broken down according to the principal divisions of the Company
including a statement of progress against the relevant Business
Plan, a statement of variation from the quarterly revenue Budget
and up to date forecasts for the balance of the relevant
Financial Year and itemising all
Page 28
transactions referred to in the capital Budget entered into by
each principal division of the Company during that period.
14. CONFIDENTIALITY
14.1 Each Shareholder undertakes to the other Shareholders that it shall
use (and shall procure that any Member of the Same Group as it shall
use) all reasonable endeavours to keep confidential (and to ensure
that its officers, employees, agents and professional and other
advisers keep confidential) any information:
14.1.1 which it may have or acquire (whether before or after the date of
this Agreement) in relation to the customers, suppliers,
contractors, business, assets or affairs of the Company
including, without limitation, any information provided pursuant
to clause 13, unless otherwise required by the policies of the
holding company of any of the Shareholders;
14.1.2 which, in consequence of the negotiations relating to this
Agreement, or being a Shareholder, or having appointees on the
Board, or the exercise of its rights, or performance of its
obligations under this Agreement, it may have or acquire (whether
before or after this Agreement) in relation to the customers,
suppliers, contractors, business, assets or affairs of the
Company; or
14.1.3 which relates to the contents of this Agreement or any agreement
or arrangement entered into pursuant to this Agreement.
14.2 None of the Shareholders shall use for its own business purposes or
disclose to any third party any such information (collectively
"Confidential Information") without the written consent of the other
Shareholders. In performing its obligations under this clause 14, each
Shareholder shall apply such confidentiality standards and procedures
as it applies generally in relation to its own confidential
information.
Page 29
14.3 The obligation of confidentiality under clause 14.1 shall not apply
to:
14.3.1 the disclosure on a "need to know" basis to a company which is a
Member of the Same Group as the IDC, KBH or CCGR (as the case may
be) where such disclosure is for a purpose reasonably incidental
to this Agreement;
14.3.2 information which is independently developed by the relevant
Party or acquired from a third party to the extent that it is
acquired with the right to disclose the same;
14.3.3 the disclosure of information to the extent required to be
disclosed by law, any stock exchange regulation or any binding
judgment, order or requirement of any court or other competent
authority;
14.3.4 the disclosure of information to any tax authority to the extent
reasonably required for the purposes of the tax affairs of the
Party concerned or any Member of the Same Group as it;
14.3.5 the disclosure (subject to clause 14.4) in confidence to a
Shareholder's professional advisors of information reasonably
required to be disclosed for a purpose reasonably incidental to
this Agreement;
14.3.6 information which becomes is in the public domain (otherwise than
as a result of breach of this clause 14); or
14.3.7 any announcement made in accordance with the terms of clause 18.
14.4 Each Shareholder shall inform (and shall procure that any Member of
the Same Group as it shall inform) any of its officers, employees or
agents or any professional or other advisor advising it in relation to
the matters referred to in this Agreement, to whom it discloses
Confidential Information, that such information is confidential and
shall instruct the person to whom the Confidential Information is
disclosed:
Page 30
14.4.1 to keep it confidential; and
14.4.2 not to disclose it to any third party (other than those persons
to whom it has already been disclosed in accordance with the
terms of this Agreement).
The party disclosing the Confidential Information shall remain
responsible for any breach of this clause 14 by the person to whom it
is disclosed.
14.5 Upon termination of this Agreement, either Party may demand from the
other the return of the other Party's Confidential Information by
notice in writing; whereupon the other party shall (and shall ensure
that the Members of the Same Group as it shall):
14.5.1 return all documents containing Confidential Information which
have been provided by or on behalf of the Party demanding the
return of Confidential Information; and
14.5.2 destroy any copies of such documents and any document or other
record reproducing, containing or made from or with reference to
the Confidential Information,
save in each case, for any submissions to or filings with
governmental, tax or regulatory authorities. Such return or
destruction shall take place as soon as practicable after the receipt
of any such notice.
14.6 The provisions of this clause 14 shall survive any termination of this
Agreement for a period of 5 (five) years from such termination.
15. REGULATORY MATTERS
15.1 The Parties shall respectively co-operate with each other to ensure
that all information necessary or desirable for the making of (or
responding to any
Page 31
requests for further information consequent upon) any notification or
filings made in respect of this Agreement, or the transactions
contemplated by this Agreement, is supplied to the Party dealing with
such notifications and filings and that they are properly, accurately
and promptly made.
15.2 Notwithstanding any other provisions of this Agreement, each Party
declares that it will not give effect to any restriction or
restrictions contained in this Agreement (or any such other
agreement), which would cause this Agreement to contravene any
relevant anti-competition laws, regulations and directives.
16. TRANSFER OF SHARES
16.1 The provisions of this clause 16 shall apply in relation to any
transfer, or proposed transfer, of Shares or any interest in such
Shares, save for the transfer of the Shares from the IDC to KBH in
terms of the arrangements set out in clause 7.
16.2 Except with the prior written consent of the other Shareholders and in
accordance with the provisions of this clause 16, no Shareholder
shall:
16.2.1 transfer any of its Shares; or
16.2.2 grant, declare, create or dispose of any right or interest in any
of its Shares; or
16.2.3 create or permit to exist any pledge, lien, charge (whether fixed
or floating) or other encumbrances over any of its Shares.
16.3 No Shares held by a Shareholder may be transferred otherwise than
pursuant to a transfer by that party (the "Seller") of all (and not
some only) of the Shares then held by it (the "Seller's Shares").
16.4 Subject to clause 7, no Shareholder shall transfer any Shares during a
period of 2 (two) years from the Completion Date.
Page 32
16.5 The Company and each of the Shareholders acknowledge to each other and
record that KBH shall not be entitled to transfer the KBH Shares until
the IDC Loan has been repaid in full.
16.6 After the expiry of the initial period referred to in clause 16.4 and
before the Seller makes any transfer of the Seller's Shares, the
Seller shall first give to the other Shareholders (the "Continuing
Party/ies") notice in writing (a "Transfer Notice") of any proposed
transfer together with details of the proposed third party purchaser
thereof (the "Third Party Purchaser"), the purchase price and other
material terms agreed between the Seller and the Third Party
Purchaser. A Transfer Notice shall, except as hereinafter provided, be
irrevocable.
16.7 The Seller shall be deemed to have offered the Seller's Shares to the
Continuing Party/ies in proportion to their then shareholdings in the
Company. Each Shareholder to whom such Seller's Shares are offered
shall have the right to purchase all (but not some only) of the
Seller's Shares offered to it and the Seller's Shares offered to the
other Continuing Party/ies and not taken up by the other Continuing
Party/ies;
16.8 The Continuing Party/ies shall, subject to clause 16.11, have the
right to purchase the Seller's Shares at the purchase price specified
in the Transfer Notice (or at such other price as shall be agreed
between the Seller and the Continuing Party/ies) by giving written
notice to the Seller within 60 (sixty) days of the receipt of the
Transfer Notice (the "Acceptance Period"). The obligations of the
Parties to complete such purchase shall be subject to the provisions
of clause 16.12.
16.9 If any Continuing Party wishes to purchase the Seller's Shares but is
unwilling to accept the price specified in the Transfer Notice and
fails to agree a price with the Seller within the Acceptance Period,
then the Continuing Party shall be entitled to refer the question of
the purchase price to an independent investment bank (the "Expert")
agreed upon by the IDC (for so long as it is a
Page 33
Shareholder), KBH and CCGR to certify the Fair Price thereof. The
following principles shall apply:
16.9.1 the Expert shall, unless otherwise agreed between the Parties, be
an independent investment bank which is independent of all
Parties and the Third Party Purchaser and which shall not have
acted for any Party in any material capacity for a period of at
least 2 (two) years preceding the date of the Transfer Notice;
16.9.2 if the Seller and the Continuing Party/ies are unable to agree
upon such independent investment bank within a period of 40
(forty) days of the receipt of the Transfer Notice, then the
Expert shall be appointed by the head for the time being of
Standard Corporate and Merchant Bank (or its successor in title)
or, in the head's absence or otherwise at his request, by one of
the deputy heads;
16.9.3 the Parties shall procure that there is made available to the
Expert such information relating to the Company as it reasonably
requires in order to determine the Fair Price;
16.9.4 in certifying the Fair Price, the Expert shall take into account
all factors it considers to be relevant, including the purchase
price and other material terms agreed between the Seller and the
Third Party Purchaser;
16.9.5 the Expert shall be deemed to be acting as an expert and not an
arbitrator and its decision shall be final and binding on the
Parties; and
16.9.6 the cost of obtaining the Expert's certificate (the
"Certificate") shall be borne equally between the Seller and the
Continuing Party/ies who wish to purchase the Seller's Shares
unless the Seller shall give notice of revocation pursuant to
clause 16.10, in which case the Seller shall bear the said cost.
Page 34
16.10 If the Seller is not willing to accept the Fair Price determined by
the Expert, then it shall be entitled to revoke the Transfer Notice by
notice in writing given within a period of 30 (thirty) days after the
date of the issue of the Certificate (which, for the avoidance of
doubt, shall be issued to the Seller and the Continuing Parties). In
the event of such revocation, the Seller shall not be entitled to
transfer the Seller's Shares or any of them without first serving a
further Transfer Notice and otherwise complying with this clause 16.
16.11 If the Transfer Notice shall not have been duly revoked under clause
16.10, the Continuing Party/ies shall have the right to purchase from
the Seller the Seller's Shares at the Fair Price by giving written
notice to the Seller within 30 (thirty) days of the expiry of the
period of 30 (thirty) days mentioned in clause 16.10. Notwithstanding
anything to the contrary in this clause 16.11, in the event that an
Expert is required to determined the Fair Price of the Seller's
Shares, pursuant to the provisions of clause 16.9, the Fair Price of
the Seller's Shares so determined shall be the purchase price of the
Seller's Shares for the purposes of this clause 16, irrespective of
whether or not the Fair Price of the Seller's Shares so determined is
higher or lower than the purchase price specified in the Transfer
Notice or than such other price as may have been agreed upon between
the Seller and any Continuing Party.
16.12 The Continuing Party/ies shall become bound (subject only to necessary
approvals of its shareholders in general meeting and any regulatory
approvals) to purchase the Seller's Shares on giving written notice to
the Seller to exercise its rights under clause 16.8 or 16.11. In such
event, completion of the sale and purchase of the Seller's Shares
shall take place within 30 (thirty) days after the giving of such
notice. Notwithstanding the foregoing, such notice and right of the
Continuing Party/ies to acquire the Seller's Shares shall cease to
have effect if (i) any necessary approval of any Continuing Party's
shareholders in general meeting has not been obtained within the said
period of 30 (thirty) days or if (ii) any necessary regulatory
approval has not been obtained within 180 (one hundred and eighty)
days after the giving of such notice or (iii) if earlier than the
expiry of such latter period, any relevant authority has conclusively
refused to grant any such regulatory approval.
Page 35
16.13 If any Continuing Party does not exercise its rights of purchase under
clauses 16.8 or 16.11 or any notice given thereunder ceases to have
effect pursuant to clause 16.12, and the other Continuing Party has
not exercised its rights of purchase to take up the Seller's Shares
offered to the declining Continuing Party, the Seller shall (subject
to clause 16.14 below) be entitled to transfer the Seller's Shares on
a bona fide arm's length sale to the Third Party Purchaser with the
consent of the Continuing Parties (which shall not be unreasonably
withheld) at a price being not less than the purchase price specified
in the Transfer Notice or, if lower, any Fair Price determined by the
Expert provided that such transfer shall have been completed within a
period of 180 (one hundred and eighty) days after the latest of (i)
the date of Transfer Notice or (ii) if the question of the purchase
price shall have been referred to the Expert, the issue of the
Certificate or (iii) if any notice given by any Continuing Party shall
have ceased to have effect pursuant to clause 16.12, the date on which
such notice ceased to have effect. The Parties undertake to (or
procure that any shareholders in Members of the Same Group as it) give
such approvals as may be required under the provisions of the
Memorandum and Articles to any transfer of Shares permitted by the
terms of this clause 16.
16.14 Completion of any transfer of Shares to the Third Party Purchaser
shall be subject to the conditions that:
16.14.1 the Third Party Purchaser shall first have entered into an
agreement with the Continuing Party/ies whereby it agrees to be
bound by the provisions of this Agreement binding upon the
Seller;
16.14.2 any claim on Loan Account (but excluding, for the avoidance of
doubt, any debts incurred in the ordinary course of trade which
are at the relevant time outstanding on inter company account)
owing at that time from the Company to the Seller shall first
have been assigned to, or equivalent finance made available by,
the Third Party Purchaser; and
16.14.3 if and insofar as the Seller requires the Third Party Purchaser
to assume the obligations of the Seller under any guarantees
and/or
Page 36
counter-indemnities to third parties in relation to the business
of the Company, such assumption shall first have taken place
(provided that any assumption is without prejudice to the right
of the Continuing Party/ies to receive a contribution from the
Seller for its share of any claims attributable to any
liabilities arising in respect of the period during which the
Seller held Shares).
16.15 Notwithstanding anything to the contrary anywhere else in this clause
16, a Seller which has a Loan Account for which the Company is
indebted to it shall be bound by the following provisions:
16.15.1 it may not transfer all of the Seller's Shares without
transferring the whole of its Loan Account at the same time;
16.15.2 a Transfer Notice given by the Seller shall specify, in addition
to the particulars required in terms of clause 16.6, the amount
of its Loan Account that it is required to transfer in terms of
clause 16.15.1 above;
16.15.3 the consideration for such Loan Account shall be the face value
of the Loan Account as at the date of completion of the sale and
purchase of the Seller's Shares;
16.15.4 all the provisions of this clause 16 shall apply to the Seller's
Shares and the Seller's Loan Account as one indivisible
transaction, and all references in these provisions to the
"Seller's Shares" shall be deemed to be references to the
Seller's Shares and the Loan Account together, as specified in
the Transfer Notice, so far as those provisions can apply to the
Seller's Loan Account.
Page 37
17. FURTHER ASSURANCES
17.1 Each Shareholder undertakes with the other Shareholders that (so far
as it is legally able) it will exercise all voting rights and powers,
direct and indirect, available to it in relation to any person and to
the Company so as to ensure the complete and punctual fulfilment,
observance and performance of the provisions of this Agreement (and
the other agreements referred to in this Agreement) and generally that
full effect is given to the principles set out in this Agreement.
17.2 Each Shareholder shall procure the performance by each Member of The
Same Group as it of all obligations under this Agreement, which are
expressed to relate to Members of the Same Group as it (whether as
Shareholders or otherwise) and of all obligations under any agreement
entered into by any Member of the Same Group pursuant as it to this
Agreement. The liability of a Party under this clause 17.2 shall not
be discharged or impaired by any release of or granting of time or
other indulgence to any Party or any other act, event or omission
which but for this clause would operate to impair or discharge the
liability of such Party under this clause 17.2.
18. ANNOUNCEMENTS
18.1 No formal public announcement or press release in connection with the
signature or subject matter of this Agreement shall (subject to clause
18.2) be made or issued by or on behalf of any Party without the prior
written approval of the other Parties (such approval not to be
unreasonably withheld or delayed).
18.2 If a Party has an obligation to make or issue any announcement
required by law or by any stock exchange or by any governmental
authority, the relevant Party shall give the other Parties every
reasonable opportunity to comment on any such announcement or release
before it is made or issued (provided
Page 38
always that this shall not have the effect of preventing the Party
making the announcement or release from complying with its legal and
stock exchange obligations).
19. ENTIRE AGREEMENT
This Agreement, together with its Schedules, sets out the entire agreement
and understanding between the Parties with respect to the subject matter
hereof and save as otherwise expressly provided no modification, amendment
or waiver of any of the provisions of this Agreement or any agreement to
cancel or terminate it shall be effective unless made in writing
specifically referring to this Agreement and duly signed by the Parties. It
is agreed that no Party has entered into this Agreement in reliance upon
any representation, warranty or undertaking of another Party which is not
expressly set out or referred to in this Agreement.
20. CONFLICT WITH MEMORANDUM AND ARTICLES
20.1 In the event of any conflict between the provisions of this Agreement
and the Memorandum and Articles or other constitutional document of
the Company, the provisions of this Agreement shall prevail as between
the Parties. The Parties shall exercise all voting and other rights
and powers available to them so as to give effect to the provisions of
this Agreement and shall further (if necessary) procure any required
amendment to the Memorandum and Articles or other constitutional
document of the Company or any member of the Company as may be
necessary and without undue delay.
20.2 Without prejudice to the generality of clause 20.1, the Parties
confirm their intention that the provisions of this Agreement shall
prevail in relation to the transfer of Shares.
20.3 The Company shall not be bound by any provision of this Agreement to
the extent that it would constitute an unlawful ▇▇▇▇▇▇ on any
statutory power of the Company (but this shall not affect the validity
of the relevant provision as
Page 39
between the other Parties or the respective obligations of such other
Parties as between themselves under clause 20.1).
21. DURATION
21.1 This Agreement shall continue in full force and effect for so long as
KBH and CCGR, and/or their successors in title, each hold Shares in
the Company.
21.2 Notwithstanding the provisions of clause 21.1 above, this Agreement
shall terminate upon a resolution being passed for the winding-up of
the Company. In such event, the IDC (if it is still a shareholder in
the Company), KBH, CCGR and the Company shall endeavour to agree on a
suitable basis for dealing with the interests and assets of the
Company but subject thereto:
21.2.1 the IDC, KBH and CCGR shall co-operate, but without any
obligation to provide any additional finance, with a view to
enabling all existing trading obligations of the Company to be
completed insofar as its resources allow. The IDC, KBH and CCGR
shall consult together with a view to outstanding contracts
within the usiness of the Company being novated or re-allocated
in a suitable manner;
21.2.2 no new contractual obligation for the supply of products or
services shall be issued by the Company;
21.2.3 unless otherwise agreed between the IDC, KBH and CCGR, the
Parties shall procure that the Company shall as soon as
practicable be wound up;
21.2.4 the IDC, KBH and CCGR shall be free to compete in any way within
the field of the business of the Company;
21.2.5 each Shareholder shall, as soon as reasonably practicable,
deliver up to the other Shareholders all drawings, notes, copies
or other representations of Confidential Information proprietary
to and/or
Page 40
originating from that other Party or any Member of the Same Group
as it. Termination shall nevertheless not affect the obligations
of the Parties under clause 14, which shall remain in full force
and effect;
21.2.6 each Member of the Same Group of the IDC, KBH and CCGR shall have
free access to and use of any technology or products developed by
the Company (whether by transfer of design and manufacturing
rights or by appropriate non-exclusive licences) and the Company
shall deliver to each of the IDC, KBH and CCGR, and not to any
third party, copies of drawings, notes or other representations
of confidential information proprietary to and/or originating
from the Company.
21.3 After termination of this Agreement and if the Company is not placed
into liquidation, or upon any of the IDC, KBH or CCGR ceasing or being
about to cease to be a Shareholder, each of the remaining Shareholders
undertake to the departing Shareholder that upon request by the
departing Shareholder, it will exercise its powers with a view to
procuring that the name of the Company (and any other relevant member
of the Company) is changed so as no longer to include the name,
initials or trademark or any reference to the name, initials or
trademark of the departing Shareholder.
22. NOTICES
22.1 Any notice or other formal communication to be given under this
Agreement shall be in writing and signed by or on behalf of the Party
giving it and may be served by sending it by fax, delivering it by
hand or sending it by registered mail with acknowledgement of receipt
to the address and for the attention of the relevant Party set out in
clause 22.2 (or as otherwise duly notified from time to time). Any
notice so served by hand, fax or post shall be deemed to have been
received:
22.1.1 in the case of delivery by hand or mail, when delivered;
22.1.2 in the case of fax, 12 (twelve) hours after the time of dispatch,
Page 41
provided that, where (in the case of delivery by hand or by fax) such
delivery or transmission occurs after 18h00 on a Business Day or on a
day which is not a Business Day, service shall be deemed to occur at
09h00 on the next following Business Day.
22.2 The Parties choose for the purposes of this Agreement the following
addresses:
22.2.1 the IDC: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
Attn: The Chief Legal Advisor
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
22.2.2 KBH: ERPM
Main Office
Cnr Main Reef and Pretoria Road
Boksburg
Attn: The Chief Executive Officer
Fax No: ▇▇▇ ▇▇▇▇▇▇▇
22.2.3 CCGR: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Company Secretary
Fax No: ▇▇▇ ▇▇▇▇▇▇▇
22.2.4 the Company: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Company Secretary
Fax No: ▇▇▇ ▇▇▇▇
Page 42
22.3 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
to the address shown thereon or that the fax was sent after obtaining
in person or by telephone appropriate evidence of the capacity of the
addressee to receive the same, as the case may be.
23. ARBITRATION
23.1 Any dispute arising out of this Agreement or the interpretation
thereof, both while in force and after its termination, shall be
submitted to and determined by arbitration. Any Party shall demand
arbitration by notice in writing to the other Parties. Such
arbitration shall be held in Johannesburg unless otherwise agreed to
in writing and shall be held in a summary manner with a view to it
being completed as soon as possible.
23.2 There shall be 1 (one) arbitrator who shall be, where the question and
issue is:
23.2.1 primarily an accounting matter, an independent chartered
accountant of 10 (ten) years standing;
23.2.2 primarily a legal matter, a practising Senior Counsel; or
23.2.3 primarily a technical matter, a suitably qualified person.
23.3 The appointment of the arbitrator shall be agreed upon between the
Parties in writing but, failing agreement between them within a period
of 14 (fourteen) days after the arbitration has been demanded in terms
of clause 23.1, any Party shall be entitled to request the President
for the time being of the Law Society of the Northern Provinces to
make the appointment who, in making his appointment, shall have regard
to the nature of the dispute.
Page 43
23.4 The arbitrator shall have the powers conferred upon an arbitrator
under the Arbitration Act, 1965 (as amended), but shall not be obliged
to follow the procedures prescribed in that Act and shall be entitled
to decide on such procedures as he may consider desirable for the
speedy determination of the dispute, and in particular he shall have
the sole and absolute discretion to determine whether and to what
extent it shall be necessary to file pleadings, make discovery of
documents or hear oral evidence.
23.5 The decision of the arbitrator shall be final and binding on the
Parties and may be made an order of any court of competent
jurisdiction. The Parties hereby submit themselves to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa, or any successor thereto, should any Party
wish to make the arbitrator's decision an order of that Court.
24. GENERAL
24.1 COMMUNICATIONS BETWEEN THE PARTIES
24.1.1 All notices and demands given by or on behalf of any Party to the
other shall be in English or accompanied by a certified
translation into English.
24.1.2 The Parties shall procure that all notices, demands and other
oral or written communications given or made by or on behalf of
the Company to the Shareholders or the Directors in their
capacity as such shall also be in English or accompanied by a
certified translation into English. All meetings of the Board and
any committees of the Board shall be conducted in English.
24.2 REMEDIES
No remedy conferred by this Agreement is intended to be exclusive of
any other remedy which is otherwise available at law, by statute or
otherwise. Each remedy shall be cumulative and in addition to every
other remedy given
Page 44
hereunder or now or hereafter existing at law, by statute or
otherwise. The election of any one or more remedy by any of the
Parties shall not constitute a waiver by such Party of the right to
pursue any other remedy.
24.3 SEVERANCE
If any provision of this Agreement, which is not material to its
efficacy as a whole, is rendered void, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby and the Parties shall endeavour in good faith to agree an
alternative provision to the void, illegal or unenforceable provision.
24.4 SURVIVAL OF RIGHTS, DUTIES AND OBLIGATIONS
Termination of this Agreement for any cause shall not release a Party
from any liability which at the time of termination has already
accrued to such Party or which thereafter may accrue in respect of any
act or omission prior to such termination.
24.5 COSTS
Each Party shall bear its own costs incurred by it to its attorneys
and other professional advisors for the preparation and signing of
this Agreement and the Schedules.
24.6 ASSIGNMENT
None of the Parties may assign this Agreement or any of its rights and
obligations under it except, in the case of a Party which is a
Shareholder, to a transferee of that Shareholder's Shares, when the
transfer is permitted in terms of this Agreement or the Articles, who
has complied with clause 16.4.
Page 45
24.7 NO PARTNERSHIP
Nothing in this Agreement shall be deemed to constitute a partnership
between the Parties (or any of them) or constitute any Party the agent
of any other Party for any purpose.
24.8 FURTHER ASSURANCE
Each Party shall co-operate with the other Parties and execute and
deliver to the other Parties such other instruments and documents and
take such other actions as may be reasonably requested from time to
time in order to carry out, evidence and confirm their rights and the
intended purpose of this Agreement.
24.9 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Agreement by signing any such counterpart.
24.10 SUCCESSORS BOUND
This Agreement shall be binding on and shall inure for the benefit of
the successors and assigns and personal representatives (as the case
may be) of each of the Parties.
24.11 GOOD FAITH
Each of the Parties undertakes with each of the others to do all
things reasonably within its power which are necessary or desirable to
give effect to the spirit and intent of this Agreement.
Page 46
SIGNED at on 2002.
For: THE INDUSTRIAL DEVELOPMENT
CORPORATION OF SOUTH AFRICA
LIMITED
------------------------------------
Signatory:
Capacity:
Authority:
and
------------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: KHUMO BATHONG HOLDINGS
(PROPRIETARY) LIMITED
------------------------------------
Signatory:
Capacity:
Authority:
Page 47
SIGNED at on 2002.
For: CROWN GOLD RECOVERIES
(PROPRIETARY) LIMITED
------------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: CROWN CONSOLIDATED GOLD
RECOVERIES LIMITED
------------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: DURBAN ROODEPOORT DEEP,
LIMITED
------------------------------------
Signatory:
Capacity:
Authority:
Page 48
SCHEDULE 1
DEFINITION OF IRR
CALCULATION OF THE INTERNAL RATE OF RETURN
The real internal rate of return ("IRR") referred to in the Agreement to which
this Schedule is annexed shall, for the purposes of the Agreement, be
calculated -
1. on the total of the IDC's Investment;
2. after taking into account any amounts received by the IDC by virtue of its
holding any shares in the share capital of the Company, including, but not
limited to, any dividend received on such shares as well as any interest
received on the IDC Loan;
3. on the basis that any amounts received by the IDC or paid by the IDC,
excluding payment of the purchase price paid by IDC in acquiring any class
of shares in the share capital of the Company, will be recognised as a
receipt or payment on the last day of the month during which such receipt
or payment took place, and that the return will be compounded on a monthly
basis;
4. on the basis that any amounts received in terms of paragraph 2 above, where
applicable, be adjusted to be after tax cash flow by reference to the
relevant tax rate applicable at the time,
by adjusting the nominal return to a real return by reference to core overall
Consumer Price Index ("CPI") as defined below as published by Statistics South
Africa or its successor.
For these purposes the CPI means the annual change in the Core Consumer Price
Index of the RSA as published by Statistics South Africa or its successor, which
for the purposes hereof is defined as - "Headline CPI excluding: 1) interest
rates on Mortgage Bonds, overdrafts and personal loans 2) changes in VAT 3)
Assessment rates and 4) Fresh and frozen meat, fish, vegetables and fresh fruit
and nuts"
Page 49
provided that -
- if the basis of computation of that CPI is at any time changed so as to
result in comparisons of that index for period before and after the
introduction of that change not truly reflecting the core rate of inflation
required to be used herein, in the whole of South Africa, or if that index
as previously adjusted in terms of this paragraph is further changes so as
to have that result, that index shall be adjusted or further adjusted in
such manner as will be determined by an independent firm of auditors
appointed by the Registrar in order to ensure as far as possible
consistency and a true reflection of the core rate of inflation in the
whole of South Africa in the application of the CPI in respect of periods
both before and after introduction of that change; and
- if publication of that CPI ceases at any time, a substitute index shall be
applied to reflect that rate of inflation over periods commencing prior to
and ending after the date upon which such publication ceases, which
substitute index shall be an index which reflects the core rate of
inflation South Africa and which will have been published prior to the
cessation of the publication of the index referred to in this paragraph and
shall be determined by the auditors referred to above who shall have the
right to use or adapt any then published index of that rate of inflation
for that purpose.
The IRR shall be calculated by the Company's auditors who shall act at the
expense of the Company and as experts and not as arbitrators and their decision
shall be final and binding on all the Shareholders and the Company, save in the
case of manifest arithmetic error or fraud.
Page 50
SCHEDULE 2
BASIS OF INTEREST COVER
CCGR is to hold the remaining 40 (forty) Shares in the Company, and the
remaining shareholders' loan of R76 042 446.40 (seventy six million forty two
thousand and four hundred and forty six Rand and forty cents). This
shareholders' loan will be unsecured, will bear interest at 125% (one hundred
and twenty five per cent) of the Prime Rate and will be repayable over 84
(eighty four) months subject to maintenance of an interest cover in the Company
of 2.5 (two point five) times.
The 2.5 (two point five) times interest cover will, however, be waived for as
long as:
- the 60 (sixty) day moving average gold price (determined by the London PM
US$ fix and the Reuters closing R/US$ rate) is below R100 000/kg (one
hundred thousand Rand per kilogram) for the Financial Years 2001/02 and
2002/03, whereafter the amount of R100 000/kg (one hundred thousand Rand
per kilogram) referred to in this paragraph shall be increased by 7% (seven
per cent) per annum commencing on 1 July 2003, and
- the previous quarter cash operating costs of the Company (namely, the total
costs associated with production, including corporate costs and ongoing
rehabilitation costs, but excluding capital expenditure and depreciation as
reflected in the quarterly results of the Company) are less than R67 500/kg
(sixty seven thousand and five hundred Rand per kilogram) for the 2001/02
Financial Year, whereafter the amount of R67 500/kg (sixty seven thousand
and five hundred Rand per kilogram) referred to above shall be increased at
the end of every 3 (three) month period commencing on 1 July 2002 in
accordance with the following formula, which is based on the pro-rata
change in the overall producer price index per quarter (as published by
Statistics South Africa) ("PPI"):
Page 51
CALCULATION OF CHANGE IN PPI PER QUARTER
Pro-rata per quarter change in PPI =
pa % change (Month 1)/12 + pa % change (Month 2)/12 + pa % change (Month 3)/12
For as long as all conditions for waiving of the 2.5 (two point five) times
interest cover ratio on the CCGR shareholders' loan apply, interest payments on
all shareholders' loans in the Company for that period are to be subject to
maintenance of a 1.0 (one point zero) times interest cover ratio in the Company.
Page 52
SCHEDULE 3
PROPOSED BUSINESS PLAN
SCHEDULE 4 TO THE SHARE PURCHASE AGREEMENT
SUBSCRIPTION AGREEMENT
between:
KHUMO BATHONG HOLDINGS (PROPRIETARY) LIMITED
(Registration number 1998/007546/07)
("KBH")
and
DURBAN ROODEPOORT DEEP, LIMITED
(Registration number 1895/000926/06)
("the Company")
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ 2146
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 2
TABLE OF CONTENTS
1. INTERPRETATION..........................................................3
2. CONDITIONS PRECEDENT....................................................6
3. AGREEMENT TO SUBSCRIBE FOR AND ISSUE SHARES.............................8
4. ISSUE OF SHARES.........................................................8
5. RESTRICTIONS ON KBH.....................................................9
6. CO-OPERATION...........................................................10
7. CONFIDENTIALITY........................................................11
8. ARBITRATION............................................................11
9. COSTS..................................................................12
10. GENERAL................................................................13
11. ADDRESSES..............................................................14
Page 3
WHEREAS:
KBH wishes to invest R68 027 000 (sixty eight million and twenty seven thousand
Rand) in the Company by subscribing for 4 794 889 (four million seven hundred
and ninety four thousand and eight hundred and eighty nine) Ordinary Shares, and
the Company is willing to allot and issue to KBH 4 794 889 (four million seven
hundred and ninety four thousand and eight hundred and eighty nine) Ordinary
Shares, on the terms and subject to the conditions set out in this Agreement.
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, and the preamble, unless the
context requires otherwise, the parties defined in the heading of this
Agreement shall retain such definitions and the words and expressions
set out below shall have the meanings assigned to them, namely:
1.1.1 "the Act" means the Companies ▇▇▇, ▇▇▇▇, as
amended;
1.1.2 "this Agreement" means this Subscription Agreement;
1.1.3 "Board of Directors" means the board of directors of the
Company or any duly appointed
committee thereof from time to time;
1.1.4 "Business Day" means any day other than a Saturday,
Sunday or statutory holiday in South
Africa;
1.1.5 "the Company" means Durban Roodepoort Deep, Limited,
a company registered in accordance
with the laws of South Africa under
Registration Number
Page 4
1895/000926/06;
1.1.6 "Effective Date" means the date on which all the
conditions set out in clause 2.1 are
fulfilled or deemed to be fulfilled
and upon which this Agreement becomes
unconditional and accordingly takes
effect;
1.1.7 "the JSE" means The JSE Securities Exchange
South Africa;
1.1.8 "KBH" means Khumo Bathong Holdings,
(Proprietary) Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1998/007546/07;
1.1.9 "Ordinary Shares" means ordinary no par value shares in
the stated capital of the Company;
1.1.10 "Parties" means KBH and the Company and "Party"
means any one of them;
1.1.11 "South Africa" means the Republic of South Africa as
constituted from time to time;
1.1.12 "Signature Date" means the last date on which this
Agreement is signed by the Parties;
1.1.13 "the Subscription Date" means the date and time on which the
matters referred to in clause 4 are
duly completed in accordance with the
requirements of that clause; and
1.1.14 "Subscription Shares" means the 4 794 889 (four million
seven hundred and ninety four thousand
and eight
Page 5
hundred and eighty nine) Ordinary
Shares which KBH is desirous of
subscribing for in terms of this
Agreement.
1.2 GENERAL INTERPRETATION
In addition to the definitions in clause 1.1, unless the context
requires otherwise:
1.2.1 the singular shall include the plural and vice versa;
1.2.2 a reference to any one gender, whether masculine, feminine or
neuter, includes the other two;
1.2.3 any reference to a natural person includes an artificial person
and vice versa;
1.2.4 any word or expression defined in and for the purposes of this
Agreement shall, if expressed in the singular, include the plural
and vice versa and a cognate word or expression shall have a
corresponding meaning;
1.2.5 words and expressions defined in the Act, which are not defined
in this Agreement, shall bear the same meanings in this Agreement
as those ascribed to them in the Act;
1.2.6 references to a statutory provision include any subordinate
legislation made from time to time under that provision,
references to a statutory provision include that provision as
from time to time modified or re-enacted as far as such
modification or re-enactment applies, or is capable of applying,
to this Agreement or any transaction entered into in accordance
with this Agreement;
1.2.7 references in this Agreement to "clauses" are to clauses to this
Agreement; and
Page 6
1.2.8 where an obligation pursuant to this Agreement is expressed to be
undertaken or assumed by any Party, such obligation shall be
construed as requiring the Party concerned to exercise all rights
and powers of control over the affairs of any other person which
that Party is able to exercise (whether directly or indirectly)
in order to secure performance of that obligation.
2. CONDITIONS PRECEDENT
2.1 The whole of this Agreement (except for this clause 2 and clauses 1,
6, 7, 8, 9, 10 and 11) shall be subject to the fulfilment or deemed
fulfilment of all the following conditions precedent within 120 (one
hundred and twenty) days of the Signature Date or by such later date
as the Parties may agree upon in writing:
2.1.1 KBH raising adequate finance in the amount of R66 303 550 (sixty
six million three hundred and three thousand five hundred and
fifty Rand) for the purpose of acquiring the Subscription Shares;
2.1.2 the passing of resolutions by the Company in general meeting
authorising the Company to allot and issue to KBH the
Subscription Shares in accordance with the provisions of
section 82(1) of the Act, and the registration of those
resolutions in accordance with the requirements of the Act, if so
required;
2.1.3 the passing of a resolution by the Board of Directors approving
the terms of, and the transactions contemplated by, this
Agreement and authorising any of the directors of the Company to
execute this Agreement and any ancillary documentation;
2.1.4 the passing of a resolution by the board of directors of KBH
approving the terms of, and the transactions contemplated by,
this Agreement and authorising any of the directors of KBH to
execute this Agreement and any ancillary documentation;
Page 7
2.1.5 all appropriate approvals and processes, to the extent required,
having been obtained and complied with, in accordance with the
Listings Requirements of the JSE;
2.1.6 all appropriate approvals and processes, to the extent required,
having been obtained and complied with, in accordance with the
Listings Requirements of the London Stock Exchange;
2.1.7 all appropriate approvals and processes, to the extent required,
having been obtained and complied with, in accordance with the
Listings Requirements of the Australian Stock Exchange;
2.1.8 all appropriate approvals and processes, to the extent required,
having been obtained and complied with, in accordance with the
Listings Requirements of the Paris Bourse;
2.1.9 all appropriate approvals and processes, to the extent required,
having been obtained and complied with, in accordance with
NASDAQ;
2.1.10 KBH and The Industrial Development Corporation of South Africa
Limited having become the owners of 3% (three per cent) and 57%
(fifty seven per cent) respectively of the issued share capital
of Crown Gold Recoveries (Proprietary) Limited.
2.2 The condition precedent in clause 2.1.1 is stipulated for the sole
benefit of KBH and KBH may waive such condition precedent in writing
to that effect, and upon any such waiver the condition precedent shall
be deemed to have been fulfilled. It is recorded that the conditions
precedent in clauses 2.1.2 to 2.1.10 are stipulated for the benefit of
both Parties.
2.3 Except for the provisions of clause 2.1.1 and clause 2.1.10, if any
approval or consent required for the fulfilment of any condition
precedent is granted subject to any condition which adversely affects
the Company to a material extent, the approval shall be deemed not to
have been given if the Company so requires, and gives written notice
to that effect to KBH within 30 (thirty) days from the date on which
the approval in question is granted.
Page 8
2.4 If any one of the conditions precedent is not fulfilled, deemed to be
fulfilled or waived during the period set out in clause 2.1, then this
Agreement (except for this clause 2 and clauses 1, 6, 7, 8, 9, 10 and
11) shall not take effect unless otherwise agreed in writing by the
Parties.
2.5 The Parties shall use their reasonable endeavours to do whatever may
be necessary to procure the fulfilment of the conditions precedent set
out in clause 2.1 and shall co-operate fully with each other for that
purpose.
3. AGREEMENT TO SUBSCRIBE FOR AND ISSUE SHARES
KBH agrees to subscribe for, and the Company agrees to allot and issue to
KBH, the Subscription Shares for a cash subscription price of R68 027 000
(sixty eight million and twenty seven thousand Rand), with effect from the
Subscription Date and in accordance with the terms and subject to the
conditions of this Agreement.
4. ISSUE OF SHARES
Unless otherwise agreed by the Parties in writing, a meeting shall be held
within 7 (seven) Business Days from the Effective Date, provided that such
date shall not be earlier than the Closing Date (as defined in the Share
Purchase Agreement entered into between Crown Consolidated Gold Recoveries
Limited, The Industrial Development Corporation of South Africa Limited,
KBH and the Company simultaneously with the signature of this Agreement),
at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ at 14h00 or such later date and time as the Parties
may agree upon in writing, at which KBH shall subscribe for the
Subscription Shares and the Company will allot and issue the Subscription
Shares to KBH against receipt in cash of the subscription of R68 027 000
(sixty eight million and twenty seven thousand Rand) by means of a
telegraphic transfer, for value at the Subscription Date, to a bank account
of the Company in South Africa, which shall have been designated by the
Company giving written notice to KBH at least 24 (twenty four) hours before
the Subscription Date..
Page 9
5. RESTRICTIONS ON KBH
5.1 KBH undertakes that it will not sell, alienate or otherwise dispose of
the Subscription Shares other than in accordance with the provisions
of clause 5.2.
5.2 If KBH wishes to sell, alienate or otherwise dispose of all or some of
the Subscription Shares, KBH shall first offer for sale to the Company
all or some of the Subscription Shares by means of written notice to
that effect (a "Transfer Notice") on the same terms and conditions of
any proposed transfer as those offered to a proposed third party (the
"Third Party Purchaser") together with details of the Third Party
Purchaser, the purchase price and other material terms offered by KBH
to the Third Party Purchaser. To give effect to this provision, the
Company shall issue the Subscription Shares in a material form and KBH
hereby authorises the Company to hold the share certificate evidencing
the ownership of the Subscription Shares in trust on behalf of KBH and
the Company shall not be bound to release such share certificate at
the instruction of KBH if such instruction is pursuant to a
transaction which is in breach of this clause 5.
5.3 On receipt of the Transfer Notice, the Company shall have the right
but shall not be bound to place the Subscription Shares at the
purchase price specified in the Transfer Notice (or at such other
price as may be agreed between KBH and the Company) with another
purchaser of the Company's choice, by giving written notice to KBH to
that effect within 21 (twenty one) days of the receipt of the Transfer
Notice.
5.4 If the Company does not exercise its rights under clause 5.3, KBH
shall be entitled to sell and transfer the Subscription Shares on a
bona fide arm's length sale to the Third Party Purchaser with the
written consent of the Company at a price which is not less than the
purchase price specified in the Transfer Notice.
Page 10
5.5 DRD acknowledges that KBH intends to pledge the Subscription Shares to
The Industrial Development Corporation of South Africa Limited as
security for a loan of R66 303 550 (sixty six million three hundred
and three thousand and five hundred and fifty) by The Industrial
Development Corporation of South Africa Limited to Crown Gold
Resources (Proprietary) Limited. The Parties agree that the pledge by
KBH of the Subscription Shares for that purpose shall not constitute a
breach of clause 5.1, and that the transfer or sale of the
Subscription Shares by The Industrial Development Corporation of South
Africa Limited pursuant to its due enforcement of such pledge shall
not constitute a breach of clause 5.2.
5.6 KBH undertakes to DRD to procure that, forthwith upon lapse of the
pledge referred to in clause 5.5 for any reason, the share certificate
evidencing the ownership of the Subscription Shares is delivered to
DRD, to be held by DRD for the purposes of, and in accordance with,
the provisions of clause 5.2.
6. CO-OPERATION
Each Party to this Agreement undertakes to do such things, perform such
acts, to take all such steps and to procure the doing of all such things,
the performance of all such acts and the taking of all such steps as may be
necessary, incidental and conducive to give effect to the terms, conditions
and import of this Agreement.
Page 11
7. CONFIDENTIALITY
7.1 Each Party undertakes to the other that this Agreement and all
negotiations relating to its conclusion shall remain strictly
confidential between them and no disclosure thereof shall be made to
any third party other than the professional advisers of the Parties,
The Industrial Development Corporation of South Africa Limited, Crown
Consolidated Gold Recoveries Limited and Crown Gold Recoveries
(Proprietary) Limited and their professional advisers or as is
necessary to give effect to its provisions and to comply with the
listing requirements of the various stock exchanges and the Act as set
out in clause 2. Only such disclosures as have been agreed by both
Parties in writing shall be made.
7.2 KBH undertakes that while this Agreement remains in force it shall
keep confidential and not disclose any information about the Company
or its business to any third party unless KBH is under a legal
obligation to make the disclosure or the information is in the public
domain.
8. ARBITRATION
8.1 Any dispute arising out of this Agreement or the interpretation
thereof, both while in force and after its termination, may at the
election of the Party claiming such dispute, be submitted to and
determined by arbitration. Such arbitration shall be held in
Johannesburg unless otherwise agreed to and shall be held in a summary
manner with a view to it being completed as soon as possible.
8.2 There shall be one arbitrator who shall be, if the question in issue
is:
8.2.1 primarily an accounting matter, an independent chartered
accountant of 10 (ten) years standing;
8.2.2 primarily a legal matter, a practising Senior Counsel; and
Page 12
8.2.3 primarily a technical matter, a suitably qualified person.
8.3 The appointment of the arbitrator shall be agreed upon between the
Parties, but failing agreement between them within a period of 14
(fourteen) days after the arbitration has been demanded, either of the
Parties shall be entitled to request the Chairman for the time being
of the Arbitration Foundation of Southern Africa to make the
appointment who, in making his appointment, shall have regard to the
nature of the dispute.
8.4 The arbitrator shall have the powers conferred upon an arbitrator
under the Arbitration Act, 1965, as amended, or re-enacted in some
other form from time to time, but shall not be obliged to follow the
procedures described in that Act and shall be entitled to decide on
such procedures as he may consider desirable for the speedy
determination of the dispute, and in particular he shall have the sole
and absolute discretion to determine whether and to what extent it
shall be necessary to file pleadings, make discovery of documents or
hear oral evidence.
8.5 The decision of the arbitrator shall be final and binding on the
Parties, and may be made an order of any court of competent
jurisdiction. Each of the Parties hereby submits itself to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa should the other Party wish to make the
arbitrator's decision an order of that Court.
9. COSTS
Each Party shall bear its own legal costs in respect of the negotiation,
preparation and conclusion of this Agreement and all other documents
necessary to give effect to this Agreement.
Page 13
10. GENERAL
10.1 REMEDIES
No remedy conferred by this Agreement is intended to be exclusive of
any other remedy which is otherwise available at law, by statute or
otherwise and each remedy shall be cumulative and in addition to every
other remedy given hereunder or now or hereafter existing at law, by
statute or otherwise. The election of any one or more remedy by any of
the Parties shall not constitute a waiver by such party of the right
to pursue any other remedy.
10.2 SEVERANCE
If any provision of this Agreement is rendered void, illegal or
unenforceable in any respect under any law it shall be severable from
this Agreement, and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
10.3 SURVIVAL OF RIGHTS, DUTIES AND OBLIGATIONS
Termination of this Agreement for any cause shall not release a Party
from any liability which at the time of termination has already
accrued to that Party or which thereafter may accrue in respect of any
act or omission prior to such termination.
10.4 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties in
regard to its subject matter and save as otherwise expressly provided
no modification, amendment or waiver of any of the provisions of this
Agreement shall be effective unless made in writing specifically
referring to this Agreement and duly signed by the Parties.
Page 14
10.5 BINDING AGREEMENT
This Agreement shall be binding on the Parties hereto and their
respective successors and assigns.
10.6 NO PARTNERSHIP
Nothing in this Agreement shall be deemed to constitute a partnership
between the Parties (or any of them) or constitute any Party the agent
of any other Party for any purpose.
10.7 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Agreement by signing any such counterpart.
11. ADDRESSES
11.1 Each Party to this Agreement chooses the address set out opposite its
name below as its address at which all notices, legal processes and
other communications must be delivered for the purposes of this
Agreement.
11.1.1 The Company: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: M Eloff (the Company Secretary)
Fax No. ▇▇▇ ▇▇▇ ▇▇▇▇
Page 15
11.1.2 KBH: ERPM Main Office
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
Attn: Dr P Ncholo (Chief Executive)
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
11.2 Any notice or communication required or permitted to be given in terms
of this Agreement shall be valid and effective only if in writing.
11.3 Any Party may by written notice to the other change its chosen address
to another physical address in South Africa, provided that the change
shall become effective on the 14th (fourteenth) day after the receipt
of the notice by the addressees.
11.4 Any notice or communication to a Party -
11.4.1 sent by telefax to it at its telefax number; or
11.4.2 delivered by hand to a responsible person during ordinary
business hours at its chosen address,
shall be deemed to have been received, in the case of clause 11.4.1,
on the first Business Day after transmission thereof and, in the case
of clause 11.4.2, on the day of delivery.
11.5 A copy of any notice or communication sent by telefax to a Party at
its telefax number shall forthwith be sent by prepaid registered post
to it at its chosen address.
11.6 Notwithstanding anything to the contrary in this clause 11, a written
notice or other communication actually received by a Party shall be
adequate written notice or communication to it notwithstanding that it
was not sent to or delivered at its chosen address.
Page 16
SIGNED at on 2002
For: KHUMO BATHONG HOLDINGS
(PTY) LIMITED
-------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002
For: DURBAN ROODEPOORT DEEP,
LIMITED
-------------------------------
Signatory:
Capacity:
Authority:
Page 39
SCHEDULE 5
LITIGATION
Claims / Litigation affecting the Company.
PLAINTIFF DEFEDANT QUANTUM
-----------------------------------------------------------------------
1. the Company Air Liquide SA R 238,000
2. Mr/s ▇▇▇▇▇▇▇▇ the Company R 126,000
3. S A Rail Commuter Corp the Company R 17,000
4. Active Personnel the Company R 82,000
5. Multiprint the Company R 15,500
SCHEDULE 6 TO THE SHARE PURCHASE AGREEMENT
CESSION OF LOAN
between:
CROWN GOLD RECOVERIES (PROPRIETARY) LIMITED
and
CROWN CONSOLIDATED GOLD RECOVERIES LIMITED
and
DURBAN ROODERPOORT DEEP, LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ 2146
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 2
WHEREAS:
A. The Cedent has a claim against DRD arising out of loans advanced by the
Cedent to DRD.
B. The Cedent wishes to cede its rights, title and interest in and to this
claim to the Cessionary for a consideration of R1 (one Rand).
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, and the preamble, unless the
context requires otherwise, the words and expressions set out below
shall have the meanings assigned to them, namely:
1.1.1 "this Agreement" means this cession of loan agreement;
1.1.2 "Business Day" means any day other than a Saturday,
Sunday or statutory holiday of the
Republic of South Africa;
1.1.3 "Cedent" means Crown Gold Recoveries
(Proprietary) Limited, a company
registered in accordance with the laws
of the Republic of South Africa under
Registration Number 1988/005155/07;
1.1.4 "Cessionary" means Crown Consolidated Gold
Recoveries Limited, a company
registered in accordance with the laws
of the Republic of South Africa under
Registration Number 1997/007865/06;
Page 3
1.1.5 "DRD" means Durban Roodepoort Deep Limited,
a company registered in accordance
with the laws of the Republic of South
Africa under Registration Number
1895/000926/06;
1.1.6 "Loan" means all the non-interest bearing
loans made by the Cedent to DRD and
thus owing by DRD to the Cedent as at
the Signature Date, which shall be
evidenced by a certificate issued by
the finance director of the Cedent or
a person in an equivalent position in
the Cedent in terms of clause 2.3, on
the Signature Date;
1.1.7 "Parties" means the Cedent, the Cessionary and
DRD and "Party" means any one of them;
1.1.8 "Signature Date" means the last date on which this
Agreement is signed by the Parties.
1.2 GENERAL INTERPRETATION
In addition to the definitions in clause 1.1, unless the context
requires otherwise:
1.2.1 the singular shall include the plural and vice versa;
1.2.2 a reference to any one gender, whether masculine, feminine or
neuter, includes the other two;
1.2.3 any reference to a natural person includes an artificial person
and vice versa;
1.2.4 any word or expression defined in and for the purposes of this
Agreement shall, if expressed in the singular, include the plural
and vice versa and a cognate word or expression shall have a
corresponding meaning;
Page 4
1.2.5 references to a statutory provision include any subordinate
legislation made from time to time under that provision;
references to a statutory provision include that provision as
from time to time modified or re-enacted as far as such
modification or re-enactment applies, or is capable of applying,
to this Agreement or any transaction entered into in accordance
with this Agreement; and
1.2.6 references in this Agreement to "clauses" are to clauses to this
Agreement.
1.3 HEADINGS AND SUB-HEADINGS
All the headings in this Agreement, including any sub-headings, are
for convenience only and are not to be taken into account for the
purposes of interpreting it.
2. CESSION
2.1 The Cedent hereby cedes, assigns and makes over to the Cessionary its
rights, title and interest in and to the Loan, with effect from the
Signature Date and for a consideration of R1 (one Rand).
2.2 DRD hereby agrees to the Cedent ceding, assigning and making over to
the Cessionary its rights, title and interest in and to the Loan in
terms of clause 2.1.
2.3 The Cedent shall deliver to the Cessionary, on the Signature Date, a
certificate issued by the finance director of the Cedent or a person
in an equivalent position in the Cedent confirming the total amount of
the Loan as at the Signature Date.
2.4 The Parties agree that the certificate issued and delivered in terms
of clause 2.3 shall, in absence of manifest error, be final and
binding on them.
Page 5
3. PAYMENT
The Cessionary shall pay to the Cedent R1 (one Rand) in cash on the
Signature Date.
4. PRIOR CESSION
The Cedent hereby unconditionally and irrevocably warrants and represents
to the Cessionary that the Loan is not subject to any prior cession to
anyone else.
5. ADDRESSES FOR LEGAL PROCESS AND NOTICE
5.1 The Parties choose, for the purposes of this Agreement, the following
addresses and telefax numbers:
5.1.1 the Cedent: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Chief Executive Officer
Fax No:▇▇▇ ▇▇▇ ▇▇▇▇
5.1.2 the Cessionary: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attention: The Chief Executive Officer
Fax No: ▇▇▇ ▇▇▇ ▇▇▇▇
5.2 Any legal process to be served on any of the Parties may be served on
it at the address specified for it in clause 5.1 and it chooses that
address as its domicilium citandi et executandi for all purposes under
this Agreement.
Page 6
5.3 Any notice or other communication to be given to any Party in terms of
this Agreement shall be valid and effective only if it is given in
writing, provided that any notice given by telefax shall be regarded
for this purpose as having been given in writing.
5.4 A notice or other communication to any Party which is sent by
registered post in a correctly addressed envelope to the address
specified for it in clause 5.1 shall be deemed to have been received
(unless the contrary is proved) within 14 (fourteen) days from the
date it was posted, or which is delivered to the Party by hand at that
address shall be deemed to have been received on the day of delivery,
provided it was delivered to a responsible person during ordinary
business hours.
5.5 Each notice by telefax to a Party at the telefax number specified for
it in clause 5.1 shall be deemed to have been received (unless the
contrary is proved) within 4 (four) hours of transmission if it is
transmitted during normal business hours of the receiving Party or
within 4 (four) hours of the beginning of the next Business Day after
it is transmitted, if it is transmitted outside those business hours.
5.6 Notwithstanding anything to the contrary in this clause 5, a written
notice or other communication actually received by any Party (and for
which written receipt has been obtained) shall be adequate written
notice or communication to it notwithstanding that the notice was not
sent to or delivered at its chosen address.
5.7 Any Party may by written notice to the other Parties change its
address for the purposes of clause 5.1 to any other address (other
than a post office box number) provided that the change shall become
effective on the 7th (seventh) day after the receipt of the notice.
Page 7
6. GENERAL
6.1 COMMUNICATIONS BETWEEN THE PARTIES
All notices, demands and other oral or written communications given or
made by or on behalf of any Party to the other Parties shall be in
English.
6.2 REMEDIES
No remedy conferred by this Agreement is intended, unless specifically
otherwise stated to be exclusive of any other remedy which is
otherwise available at law, by statute or otherwise. Each remedy shall
be cumulative and in addition to every other remedy given hereunder or
now or hereafter existing at law, by statute or otherwise. The
election of any one or more remedy by any of the Parties shall not
constitute a waiver by such Party of the right to pursue any other
remedy.
6.3 SEVERANCE
If any provision of this Agreement is rendered void, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and the Parties shall endeavour in good
faith to agree an alternative provision to the void, illegal or
unenforceable provision.
6.4 ENTIRE AGREEMENT
6.4.1 This Agreement constitutes the entire agreement between the
Parties in regard to its subject matter.
6.4.2 No Party shall have any claim or right of action arising from any
undertaking, representation or warranty not included in this
Agreement.
Page 8
6.5 VARIATIONS
No agreement to vary, add to or cancel this Agreement shall be of any
force or effect unless recorded in writing and signed by or on behalf
of both Parties.
6.6 ASSIGNMENT
No Party may delegate any of its obligations under this Agreement.
6.7 GENERAL CO-OPERATION
Each Party shall co-operate with the other and execute and deliver to
the other Parties such other instruments and documents and take such
other actions as may be reasonably requested from time to time in
order to carry out, evidence and confirm their rights and the intended
purpose of this Agreement.
6.8 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Agreement by signing any such counterpart.
6.9 JURISDICTION
The Parties submit themselves to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the High Court of the Republic of
South Africa.
Page 9
SIGNED on 2002.
For: CROWN GOLD RECOVERIES
(PROPRIETARY) LIMITED
------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: CROWN CONSOLIDATED GOLD
RECOVERIES LIMITED
------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: DURBAN ROODERPOORT DEEP, LIMITED
------------------------------
Signatory:
Capacity:
Authority:
SCHEDULE 7 TO SHARE PURCHASE AGREEMENT
MEMORANDUM OF LOAN AGREEMENT NO. 3
between:
CROWN CONSOLIDATED GOLD RECOVERIES LIMITED
and
CROWN GOLD RECOVERIES (PROPRIETARY) LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ 2146
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 2
TABLE OF CONTENTS
1. DEFINITIONS.............................................................3
2. THE FIRST LOAN..........................................................6
3. THE SECOND LOAN.........................................................6
4. THE THIRD LOAN..........................................................7
5. UNDERTAKINGS BY THE BORROWER............................................7
6. EVENTS OF DEFAULT.......................................................8
7. CESSION AND DELEGATION BY THE LENDER...................................10
8. CESSION AND DELEGATION BY THE BORROWER.................................11
9. NOTICES................................................................11
10. ARBITRATION............................................................12
11. GENERAL................................................................13
Page 3
WHEREAS:
A. This Memorandum records 3 (three) interest free loans made by the Lender to
the Borrower on the terms and subject to the conditions recorded in this
Memorandum.
B. In terms of the First Loan, the Lender agreed to lend to the Borrower, who
agreed to borrow from the Lender, the amount of R125 106 116 (one hundred
and twenty five million, one hundred and six thousand and one hundred and
sixteen Rand), which entire amount has been drawn down by the Borrower.
C. In terms of the Second Loan, the Lender agreed to lend to the Borrower, who
agreed to borrow from the Lender, the amount of R40 000 000 (forty million
Rand), which entire amount has been drawn down by the Borrower.
D. In terms of the Third Loan, the Lender agreed to lend to the Borrower, who
agreed to borrow from the Lender, the amount of R25 000 000 (twenty five
million Rand), which amount was credited to the loan account of the Lender
against the Company in terms of an agreement dated 13 November 1997.
E. The Borrower and the Lender wish to record the terms and conditions of the
First Loan, the Second Loan and the Third Loan in this Memorandum.
THE PARTIES ACCORDINGLY RECORD THAT :
1. DEFINITIONS
For the purposes of this Memorandum, and the preamble, unless the context
indicates otherwise, the words and expressions set out below shall have the
meanings assigned to them, namely:
1.1 "Business Day" means any day other than a Saturday,
Sunday or statutory holiday in South
Africa;
1.2 "Borrower" means Crown Gold Recoveries
(Proprietary) Limited, a company
registered in accordance with the laws
of South Africa under Registration
Page 4
Number 1988/005155/07;
1.3 "Event of Default" means any one of the events specified
in clause 6;
1.4 "First Loan" means the amount of R125 106 116 (one
hundred and twenty five million and
one hundred and six thousand and one
hundred and sixteen Rand) which the
Borrower agreed to borrow from the
Lender and which the Lender agreed to
lend to the Borrower and which entire
amount has been drawn down by the
Borrower and is still outstanding;
1.5 "Indebtedness" means any loan, debt, guarantee,
indemnity or other obligation now or
hereafter existing valued in excess of
R500 000 (five hundred thousand Rand);
1.6 "Loans" means the First Loan, the Second Loan
and the Third Loan and "Loan" shall
mean any of these 3 (three) loans;
1.7 "the Lender" means Crown Consolidated Gold
Recoveries Limited, a company
registered in accordance with the laws
of South Africa under Registration
Number 1997/007865/06;
1.8 "this Memorandum" means this memorandum of loan
agreement;
1.9 "Parties" means the Borrower and the Lender and
"Party" means either one of them;
1.10 "Prime Rate" shall mean the publicly quoted basic
rate of interest generally levied by
The Standard Bank of
Page 5
South Africa Limited from time to time
in South Africa on overdraft to its
first class corporate borrowers,
calculated on a 365 (three hundred and
sixty five) day factor, irrespective
of whether or not the year is a leap
year, it being recorded that a
certificate signed by any manager of
The Standard Bank of South Africa
Limited (whose appointment shall not
be necessary to prove) shall
constitute prima facie proof of the
ruling prime rate at the relevant time
in the event of there being a dispute
in relation thereto;
1.11 "Second Loan" means the amount of R40 000 000 (forty
million Rand) which the Borrower
agreed to borrow from the Lender and
which the Lender agreed to lend to the
Borrower and which entire amount has
been drawn down by the Borrower and is
still outstanding;
1.12 "Signature Date" means the date of last signature of
this Memorandum;
1.13 "South Africa" means the Republic of South Africa as
constituted from time to time; and
1.14 "Third Loan" means the amount of R25 000 000
(twenty five million Rand) which the
Borrower agreed to borrow from the
Lender and which the Lender agreed to
lend to the Borrower and which amount
was credited to the loan account of
the Lender against the Company in
terms of an agreement dated 13
November 1997 and which amount is
still outstanding.
Page 6
2. THE FIRST LOAN
2.1 It is recorded that the Lender agreed to lend to the Borrower, and the
Borrower borrowed from the Lender, the First Loan on the following
terms:
2.1.1 the First Loan I was unsecured, interest free; and
2.1.2 the First Loan was repayable on demand.
2.2 Notwithstanding the provisions of clause 2.1 above, the Parties now
hereby agree that from the Signature Date, the First Loan will start
bearing interest at the Prime Rate plus 15% (fifteen per cent) of the
Prime Rate which interest will be payable annually in arrear on the
3rd (third) Business Day after each anniversary of the Signature Date,
and the capital amount of the First Loan will be repayable within 7
(seven) years of the Signature Date.
3. THE SECOND LOAN
3.1 It is recorded that the Lender agreed to lend to the Borrower, and the
Borrower borrowed from the Lender, the Second Loan on the following
terms:
3.1.1 the Second Loan was unsecured, interest free; and
3.1.2 the Second Loan was repayable on demand.
3.2 Notwithstanding the provisions of clause 3.1 above, the Parties now
hereby agree that from the Signature Date, the Second Loan will start
bearing interest at the Prime Rate plus 15% (fifteen per cent) of the
Prime Rate which interest will be payable annually in arrear on the
3rd (third) Business Day after each anniversary of the Signature Date
and the capital amount of the Second Loan will be repayable within 7
(seven) years of the Signature Date.
Page 7
4. THE THIRD LOAN
4.1 It is recorded that the Lender agreed to lend to the Borrower and the
Borrower borrowed from the Lender the Third Loan on the following
terms:
4.1.1 the Third Loan was unsecured, interest free; and
4.1.2 the Third Loan was repayable on demand.
4.2 Notwithstanding the provisions of clause 4.1 above, the Parties now
hereby agree that from the Signature Date, the Third Loan will start
bearing interest at the Prime Rate plus 15% (fifteen per cent) of the
Prime Rate, which interest will be payable annually in arrear on the
3rd (third) Business Day after each anniversary of the Signature Date,
and the capital amount of the Third Loan will be repayable within 7
(seven) years of the Signature Date.
5. UNDERTAKINGS BY THE BORROWER
5.1 The Borrower undertakes to the Lender that until all the Loans have
been repaid in full by the Borrower to the Lender:
5.1.1 the Borrower shall (immediately upon it becoming aware of such
occurrence) notify the Lender of the occurrence of any Event of
Default and of any other event which, with the giving of notice
or lapse of time or both, might constitute an Event of Default
and at the same time inform the Lender of any action taken or
proposed to be taken in connection with that Event of Default;
5.1.2 the Borrower will continue its business, being the conduct of
mining operations, including but not limited to the re-treatment
of sand dumps, slime dumps and archive material deposits;
5.1.3 the Borrower shall maintain in full force and effect all
authorisations, approvals, licences, registrations, consent or
declarations from all
Page 8
legislative bodies of government, ministries, agencies or other
authorities required by the laws of South Africa or otherwise
appropriate in order for the Borrower-
5.1.3.1 to incur the obligations expressed to be assumed by it in or
pursuant to this Memorandum;
5.1.3.2 to execute and deliver all other documents and instruments
to be delivered by it pursuant to this Memorandum;
5.1.3.3 to perform and observe the terms and provisions of this
Memorandum;
5.1.3.4 to make all payments expressed to be required under this
Memorandum; and
5.1.3.5 to render this Memorandum legal, valid, binding, enforceable
and admissible in evidence.
5.2 The Borrower shall promptly furnish the Lender with such evidence of
authority, authenticated specimen signatures and other documents and
information as the Lender may reasonably request, on the request of
the Lender, and perform all such other acts as may be necessary to
carry out the intent of this Memorandum.
6. EVENTS OF DEFAULT
6.1 With regard to the Loans, if:
6.1.1 the Borrower shall for any reason fail duly and promptly to
perform or observe any of the other obligations or undertakings
expressed to be binding on or undertaken in or pursuant to this
Memorandum; or
6.1.2 a moratorium is declared on the discharge of Indebtedness of the
Borrower or the Borrower is unable to pay its debts generally as
they
Page 9
become due and payable or stops or threatens to stop or suspends
payment of any sum over R500 000 (five hundred thousand Rand)
expressed to be payable by it in or pursuant to this Memorandum
or of its debts generally or otherwise becomes insolvent or shall
convene a meeting for the purposes of making, or shall propose or
enter into, any arrangement or composition for the benefit of any
one or more of its creditors or shall commence negotiations with
any one or more of its creditors with a view to a readjustment or
rescheduling of its Indebtedness or with a view to the avoidance
of circumstances in which it would or might be obliged to declare
a moratorium on the discharge of its Indebtedness; or
6.1.3 any person becomes entitled to take possession of or realise or
otherwise apply any of the assets of the Borrower or to cause
such assets to be realised in satisfaction of any obligation of
the Borrower to such person and such event would or might, either
directly or indirectly, materially affect the Borrower's ability
to perform any of the obligations expressed to be assumed by it
in or pursuant to this Memorandum; or
6.1.4 if any action or proceeding of or before any judicial,
administrative, governmental or other authority or arbitrator
commences (and is not stayed or discharged within 15 (fifteen)
calendar days thereafter) to enjoin or restrain the performance
or observance by the Borrower of the terms of this Memorandum or
in any manner to question the right and power of the Borrower to
enter into, exercise its rights under and perform and observe the
terms of this Memorandum or the legality, validity,
enforceability, binding nature or admissibility in evidence of
this Memorandum; or
6.1.5 if it becomes or proves to be unlawful or impossible for the
Borrower duly and promptly to perform or observe any of the
obligations or undertakings expressed to be binding on or
undertaken by it in or pursuant to this Memorandum,
Page 10
then and in any case the Borrower shall forthwith notify the Lender of
the occurrence of such event which (regardless of whether such notice
shall have been given) shall constitute an Event of Default. At any
time after the occurrence of an Event of Default the Lender may, by
written notice to the Borrower, declare the First Loan, the Second
Loan and Third Loan to be immediately due and payable.
6.2 If the Loans are declared immediately due and payable pursuant to
clause 6.1, the Borrower shall immediately pay to the Lender the
amount due under the Loans.
7. CESSION AND DELEGATION BY THE LENDER
7.1 The Lender may at any time and from time to time cede all or any part
of its rights and benefits and delegate all or any part of its
obligations under this Memorandum to another person (an "Assignee").
7.2 For this purpose the Lender may disclose to a potential or actual
Assignee such credit and other information relating to the Borrower
and its financial condition as the Borrower shall have made available
to the Lender or as shall be known to the Lender otherwise howsoever.
7.3 If the Lender cedes any part of its rights and benefits and delegates
any part of its obligations under this Memorandum then all references
in this Memorandum to the Lender shall thereafter be construed as
references to the Lender and its Assignee to the extent of their
respective participations.
7.4 The expression "Lender" wherever used in this Memorandum shall include
every Assignee of the Lender and every successor in title of any such
Assignee or of the Lender.
Page 11
8. CESSION AND DELEGATION BY THE BORROWER
The rights and obligations of the Borrower under this Memorandum are
personal to the Borrower and accordingly the Borrower shall not cede any of
its rights or benefits or delegate any of its obligations under this
Memorandum either in whole or in part.
9. NOTICES
9.1 Any notice or other formal communication to be given under this
Memorandum shall be in writing and signed by or on behalf of the Party
giving it and may be served by sending it by fax, delivering it by
hand or sending it by registered mail with acknowledgement of receipt
to the address and for the attention of the relevant Party set out in
clause 9.2 (or as otherwise duly notified from time to time). Any
notice so served by hand, fax or post shall be deemed to have been
received:
9.1.1 in the case of delivery by hand or mail, when delivered;
9.1.2 in the case of fax, 12 (twelve) hours after the time of dispatch;
provided that, where (in the case of delivery by hand or by fax), such
delivery or transmission occurs after 18h00 on a Business Day or on a
day which is not a Business Day, service shall be deemed to occur at
09h00 on the next following Business Day. References to time in this
clause are to local time in the country of the addressee.
9.2 The Parties choose for the purposes of this Memorandum the following
addresses:
9.2.1 The Lender: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Page 12
Attn: The Company Secretary
Fax No: ▇▇▇ ▇▇▇-▇▇▇▇;
9.2.2 The Borrower: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Attn: The Company Secretary
Fax No: ▇▇▇ ▇▇▇-▇▇▇▇.
9.3 In proving such service it shall be sufficient to prove that the
envelope containing such notice was properly addressed and delivered
to the address shown thereon or that the fax was sent after obtaining
in person or by telephone appropriate evidence of the capacity of the
addressee to receive the same, as the case may be.
9.4 All notices or formal communications under or in connection with this
Memorandum shall be in the English language or, if in any other
language, accompanied by a translation into English. In the event of
any conflict between the English text and the text in any other
language, the English text shall prevail.
10. ARBITRATION
10.1 Any dispute arising out of this Memorandum or the interpretation
thereof, both while in force and after its termination, shall be
submitted to and determined by arbitration. Any Party may demand
arbitration by notice in writing to the other Party. Such arbitration
shall be held in Johannesburg unless otherwise agreed to in writing
and shall be held in a summary manner with a view to it being
completed as soon as possible.
10.2 There shall be 1 (one) arbitrator who shall be, where the question and
issue is:
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10.2.1 primarily an accounting matter, an independent chartered
accountant of 10 (ten) years standing;
10.2.2 primarily a legal matter, a practising Senior Counsel; or
10.2.3 primarily a technical matter, a suitably qualified person.
10.3 The appointment of the arbitrator shall be agreed upon between the
Parties in writing but, failing agreement between them, within a
period of 14 (fourteen) days after the arbitration has been demanded
in terms of clause 10.1, any party shall be entitled to request the
President for the time being of the Law Society of the Northern
Provinces to make the appointment who shall, in making his
appointment, to have regard to the nature of the dispute.
10.4 The arbitrator shall have the powers conferred upon an arbitrator
under the Arbitration Act, 1965 (as amended), but shall not be obliged
to follow the procedures prescribed in that Act and shall be entitled
to decide on such procedures as he may consider desirable for the
speedy determination of the dispute, and in particular he shall have
the sole and absolute discretion to determine whether and to what
extent it shall be necessary to file pleadings, make discovery of
documents or hear oral evidence.
10.5 The decision of the arbitrator shall be final and binding on the
Parties and may be made an order of any court of competent
jurisdiction. The Parties hereby submit themselves to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the
High Court of South Africa, or any successor thereto, should any Party
wish to make the arbitrator's decision an order of that Court.
11. GENERAL
11.1 COMMUNICATIONS BETWEEN THE PARTIES
All notices and demands given by or on behalf of either Party to the
other shall be in English or accompanied by a certified translation
into English.
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11.2 REMEDIES
No remedy conferred by this Memorandum is intended to be exclusive of
any other remedy which is otherwise available at law, by statute or
otherwise. Each remedy shall be cumulative and in addition to every
other remedy given hereunder or now or hereafter existing at law, by
statute or otherwise. The election of any one or more remedy by any of
the Parties shall not constitute a waiver by such Party of the right
to pursue any other remedy.
11.3 SEVERANCE
If any provision of this Memorandum, which is not material to its
efficacy as a whole, is rendered void, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby and the Parties shall endeavour in good faith to agree an
alternative provision to the void, illegal or unenforceable provision.
11.4 SURVIVAL OF RIGHTS, DUTIES AND OBLIGATIONS
Termination of this Memorandum for any cause shall not release a Party
from any liability which at the time of termination has already
accrued to such Party or which thereafter may accrue in respect of any
act or omission prior to such termination.
11.5 COSTS
Each Party shall bear its own costs incurred by it to its attorneys
and other professional advisors for the preparation and signing of
this Memorandum.
11.6 ENTIRE AGREEMENT
This Memorandum constitutes the entire agreement between the Parties
in relation to its subject matter and save as otherwise expressly
provided no modification, amendment or waiver of any of the provisions
of this Memorandum or any agreement to cancel or terminate it shall be
effective
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unless made in writing specifically referring to this Memorandum and
duly signed by the Parties.
11.7 NO PARTNERSHIP
Nothing in this Memorandum shall be deemed to constitute a partnership
between the Parties (or any of them) or constitute any Party the agent
of any other Party for any purpose.
11.8 FURTHER ASSURANCE
Each Party shall co-operate with the other Party and execute and
deliver to the other Party such other instruments and documents and
take such other actions as may be reasonably requested from time to
time in order to carry out, evidence and confirm the rights and the
intended purpose of this Memorandum.
11.9 COUNTERPARTS
This Memorandum may be signed in any number of counterparts, all of
which taken together shall constitute one and the same instrument. Any
Party may enter into this Memorandum by signing any such counterpart.
11.10 SUCCESSORS BOUND
This Memorandum shall be binding on and shall inure for the benefit of
the successors and assigns and personal representatives (as the case
may be) of each of the Parties.
11.11 GOOD FAITH
Each of the Parties undertakes with each of the others to do all
things reasonably within its power which are necessary or desirable to
give effect to the spirit and intent of this Memorandum.
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SIGNED at on 2002.
For: CROWN CONSOLIDATED GOLD
RECOVERIES LIMITED
-----------------------------------
Signatory:
Capacity:
Authority:
SIGNED at on 2002.
For: CROWN GOLD RECOVERIES
(PROPRIETARY) LIMITED
-----------------------------------
Signatory:
Capacity:
Authority:
