A G R E E M E N T
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entered into between
AFRICA FINANCE CORPORATION
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(Registration No. 19441/3602)
and
NEW AFRICA OPPORTUNITY FUND SUB TWO LLC
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and
CHANCELLOR CORPORATION
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and
AFINTA MOTOR CORPORATION (PROPRIETARY) LIMITED
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(Registration No. 96/06574/07)
and
GRAHAM EDWARD NICHOLLS
----------------------
and
ROBERT CHARLES DRAKE
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and
HAROLD JOSHUA MANNE
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WHEREBY IT IS AGREED AS FOLLOWS :
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1. INTERPRETATION AND PRELIMINARY INTERPRETATION AND PRELIMINARY
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The headings of the clauses in this agreement are for the purpose of convenience
and reference only and shall not be used in the interpretation of nor modify nor
amplify the terms of this agreement nor any clause hereof. Unless a contrary
intention clearly appears -
1.1. words importing -
1.1.1. any one gender include the other two genders;
1.1.2. the singular include the plural and vice versa; and
1.1.3. natural persons include created entities (corporate or unincorporate)
and the state and vice versa;
1.2. the following terms shall have the meanings assigned to them hereunder
and cognate expressions shall have corresponding meanings, namely -
1.2.1. "AFRICA FINANCE" means AFRICA FINANCE CORPORATION, Registration
Number 19441/3602, a corporation established under the laws of Mauritius, being
a wholly-owned subsidiary company of CAC;
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1.2.2. "AMC" means AFINTA MOTOR CORPORATION (PROPRIETARY) LIMITED,
Registration Number 96/06574/07, a company established under the laws of the
Republic of South Africa;
1.2.3. "AMC group" means AMC and any company which is a subsidiary (as
defined in the Companies Act, 1973) from time to time of AMC;
1.2.4. "'A' preference shares" means "A" convertible preference shares in
the share capital of AMC with the rights, privileges and conditions set forth in
ANNEXURE A;
1.2.5. "business day" means any day other than a Saturday, Sunday or
national public holiday in the Republic of South Africa;
1.2.6. "CAC" means CHANCELLOR AFRICA CORPORATION, Registration Number
1998/013128/10/3602, a corporation established under the laws of Mauritius,
being a wholly-owned subsidiary company of CHANCELLOR CORPORATION;
1.2.7. "CC ordinary stock" means ordinary stock in the share capital of
CHANCELLOR CORPORATION, which stock is traded on NASD bulletin board;
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1.2.8. "CHANCELLOR CORPORATION" means CHANCELLOR CORPORATION Registration
Number 04/2626079, a corporation established under the laws of the Commonwealth
of Massachussets;
1.2.9. "closing date" means Friday, 8 October 1999;
1.2.10. "effective date" means 30 June 1999;
1.2.11. "NAOF" means NEW AFRICA OPPORTUNITY FUND LP, a limited liability
partnership established under the laws of Delaware, USA;
1.2.12. "NAOF-SUB" means NAOF SUB TWO LLC, a limited liability company
established under the laws of Delaware, USA, being a wholly-owned subsidiary of
NAOF;
1.2.13. "the NASD bulletin board" means the NATIONAL ASSOCIATION OF
SECURITIES DEALERS, being a recognised investment exchange system operating in
the United States of America as an over-the-counter market;
1.2.14. "series 'B' stock" means series "B" preferred stock in the share
capital of CHANCELLOR CORPORATION with the rights, privileges and conditions set
forth in ANNEXURE B;
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1.3. any reference in this agreement to "date of signature hereof" shall be
read as meaning a reference to the date of the last signature of this agreement;
1.4. any reference to an enactment is to that enactment as at the date of
signature hereof and as amended or re-enacted from time to time;
1.5. if any provision in a definition is a substantive provision conferring
rights or imposing obligations on any party, notwithstanding that it is only in
the definition clause, effect shall be given to it as if it were a substantive
provision in the body of the agreement;
1.6. when any number of days is prescribed in this agreement, same shall be
reckoned exclusively of the first and inclusively of the last day unless the
last day falls on a day which is not a business day, in which case the last day
shall be the next succeeding business day;
1.7. where figures are referred to in numerals and in words, if there is any
conflict between the two, the words shall prevail;
1.8. expressions defined in this agreement shall bear the same meanings in
schedules or annexures to this agreement which do not themselves contain their
own definitions;
1.9. reference to day/s, month/s or year/s shall be construed as Gregorian
calendar day/s, month/s or year/s;
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1.10. the use of any expression in this agreement covering a process
available under South African law such as a winding-up or liquidation (without
limitation eiusdem generis) shall, if any of the parties to this agreement is
subject to the law of any other jurisdiction, be construed as including any
equivalent or analogous proceedings under the law of such defined jurisdiction;
1.11. where any term is defined within the context of any particular clause
in this agreement, the term so defined, unless it is clear from the clause in
question that the term so defined has limited application to the relevant
clause, shall bear the meaning ascribed to it for all purposes in terms of this
agreement, notwithstanding that that term has not been defined in this
interpretation clause;
1.12. the expiration or termination of this agreement shall not affect such
of the provisions of this agreement as expressly provide that they will operate
after any such expiration or termination or which of necessity must continue to
have effect after such expiration or termination, notwithstanding that the
clauses themselves do not expressly provide for this;
1.13. the rule of construction that the contract shall be interpreted
against the party responsible for the drafting or preparation of the agreement,
shall not apply;
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1.14. this agreement shall be governed by and interpreted in accordance with
the laws of the Republic of South Africa.
2. RECORDAL RECORDAL
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CHANCELLOR CORPORATION intends to invest in AMC by way of equity investments so
that it will, on the closing date, hold 15,1% (fifteen comma one per cent) of
the entire issued share capital of AMC, upon the terms and conditions set out in
this agreement.
3. REPAYMENT OF LOAN ACCOUNT REPAYMENT OF LOAN ACCOUNT
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On the effective date AMC shall repay to AFRICA FINANCE R8 200 000 (eight
million two hundred thousand rand) of AFRICA FINANCE's loan account against AMC
together with any and all accrued interest thereon.
4. DEBT/EQUITY CONVERSION DEBT/EQUITY CONVERSION
----------------------- -----------------------
4.1. On the effective date AFRICA FINANCE shall subscribe for 9 213 (nine
thousand two hundred and thirteen) "A" preference shares at a subscription price
inclusive of premium equal to the sum of R8 200 000 (eight million two hundred
thousand rand) plus an amount equal to the accrued interest referred to in
clause 3. AFRICA FINANCE shall pay the aforementioned subscription price to AMC
on the effective date.
4.2. On the closing date, and against discharge of AFRICA FINANCE's
obligation to pay the subscription price contemplated in clause 4.1, AMC shall
allot and issue 9 213 (nine thousand two hundred and thirteen) "A" preference
shares to AFRICA FINANCE.
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4.3. As a result of the implementation of the transactions contemplated in
clause 3 and this clause 4 -
4.3.1. AFRICA FINANCE's loan account against AMC shall be reduced on the
effective date by R8 200 000 (eight million two hundred thousand rand) plus the
aforementioned accrued interest thereon; and
4.3.2. AFRICA FINANCE shall become the holder of 9 213 (nine thousand two
hundred and thirteen) "A" preference shares, representing 5,1% (five comma one
per cent) of the entire issued share capital of AMC.
4.4. AMC, management and NAOF-SUB warrant jointly and severally in favour of
AFRICA FINANCE that AMC shall have sufficient authorised share capital to allot
and issue the aforementioned 9 213 (nine thousand two hundred and thirteen) "A"
preference shares to AFRICA FINANCE, as contemplated in this agreement.
5. SHARE SWOP SHARE SWOP
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5.1. With effect on the closing date and against discharge by AFRICA FINANCE
of its obligations contemplated in clause 5.2, NAOF-SUB sells, transfers, cedes
and delivers to AFRICA FINANCE 18 064 (eighteen thousand and sixty four) "A"
preference shares (representing 10% (ten per cent) of the entire issued share
capital of AMC). NAOF-SUB shall do all things and deliver all documents
required to ensure that the 18 064 (eighteen thousand and sixty four) "A"
preference shares are transferred to and registered in the name of AFRICA
FINANCE with effect from the closing date.
5.2. With effect on the closing date and against discharge by NAOF-SUB of
its obligations under clause 5.1 above, AFRICA FINANCE shall discharge its
obligation to pay for the 18 064 (eighteen thousand and sixty four) "A"
preference shares transferred in terms of clause 5.1 above, by transferring,
ceding and delivering to NAOF-SUB 250 000 (two hundred and fifty thousand)
series "B" stock. AFRICA FINANCE shall do all things and deliver all documents
required to ensure that the 250 000 (two hundred and fifty thousand) series "B"
stock is transferred to and registered in the name of NAOF-SUB with effect from
the closing date in terms of this clause 5.2.
5.3. Management hereby waives any rights of pre-emption against NAOF in
respect of the 18 064 (eighteen thousand and sixty four) "A" preference shares
contemplated in clause 5.1 and hereby consents to the transfer contemplated
herein.
5.4. The sale contemplated in this clause 5 shall be effected on the basis
that, except as expressly provided for elsewhere in this agreement, neither
AFRICA FINANCE nor NAOF-SUB gives any warranties whatsoever, whether express,
implied or tacit, in respect of the 250 000 (two hundred and fifty thousand)
series "B" stock and the 18 064 (eighteen thousand and sixty four) "A"
preference shares, respectively.
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5.5. Accordingly, as a result of the implementation of the transaction
contemplated in clause 4 and the sale contemplated in this clause 5, AFRICA
FINANCE shall initially hold 27 277 (twenty seven thousand two hundred and
seventy seven) "A" preference shares, representing 15,1% (fifteen comma one per
cent) of the entire issued share capital of AMC.
6. WORLDWIDE DISTRIBUTION RIGHTS WORLDWIDE DISTRIBUTION RIGHTS
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6.1. GRAHAM E NICHOLLS (or his nominee) and NAOF-SUB each undertakes to
procure that AMC grants to AFRICA FINANCE as soon as reasonably possible after
the date of signature hereof, certain worldwide rights of distribution
substantially on the basis set forth in the exclusive distribution agreement
attached hereto as ANNEXURE C.
6.2. On the closing date or on the date of execution of the written
exclusive distribution agreement referred to in clause 6.1, whichever is the
later, in consideration for the undertakings contemplated in clause 6.1, AFRICA
FINANCE shall transfer, cede and deliver 100 000 (one hundred thousand) series
"B" stock as follows -
6.2.1. 71 429 (seventy one thousand four hundred and twenty nine) shares to
GRAHAM E NICHOLLS (or his nominee); and
6.2.2. 28 571 (twenty eight thousand five hundred and seventy one) shares to
NAOF-SUB.
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7. RIGHTS OF FIRST REFUSAL AND TRANSFERS OF SHARES RIGHTS OF FIRST
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REFUSAL AND TRANSFERS OF SHARES
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7.1. AFRICA FINANCE may not sell or otherwise dispose of or transfer
(including but not limited to by way of donation or dividend) any shares held by
it in AMC -
7.1.1. except in terms of this clause 7 and clause 8 and any other provision
of this agreement specifically providing for disposal, and
7.1.2. only if, in one and the same transaction, it likewise sells, disposes
of or alienates a proportionate share of its claim against AMC on loan account
("loan account"), if any.
7.2. The provisions of this clause 7 and clause 8 shall also apply to the
extent applicable to any future rights offers or allotments made to any
shareholders of AMC. Accordingly, all references in this clause 7 and clause 8
and in the lien, transmission and forfeiture provisions of the articles of
association of AMC to the offer, sale, disposal, alienation, transfer or
transmission of a share in AMC shall, unless the context otherwise requires, be
deemed to apply also to the proportionate share of the loan account of the
holder of such share and to any rights offers or allotments.
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7.3. When it is intended to dispose of some or all of the AMC shares held by
AFRICA FINANCE (other than in terms of clause 7.2 or clause 8.2 or any other
permitted provision in the agreement) AFRICA FINANCE shall offer the shares in
writing to NAOF-SUB, stating the price (which shall sound in money in South
African currency or in United States dollars) and the terms of payment required
by it and no other terms shall be stipulated save for that contemplated in
clause 7.10 and if it intends selling or otherwise disposing or transferring to
a particular third party if the offer is not accepted by NAOF-SUB, it shall
disclose the name of such third party.
7.4. If, within 5 (five) days after the receipt of the offer (during which
period the offer shall be irrevocable), it is not accepted in writing in respect
of all the shares offered to NAOF-SUB then, only if a third party was named in
the offer contemplated in clause 7.3, AFRICA FINANCE may, within a further 30
(thirty) days, but not thereafter without again making an offer to NAOF-SUB in
terms of clause 7.3 dispose of all the shares offered (but not fewer) to the
third party only, at a price not lower and on terms not more favourable to such
person than the price at and terms on which NAOF-SUB was entitled to purchase
them.
7.5. The fact that AFRICA FINANCE gives any third party normal warranties
shall not constitute terms more favourable than those given to NAOF-SUB who will
not be given any warranties.
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7.6. If whilst an offer in terms of this clause 7 is pending, the provisions
of clause 8.2 become operative in respect of those shares so offered, then at
the election of NAOF-SUB (which election shall be made in writing delivered to
AFRICA FINANCE within 48 (forty-eight) hours after the provisions of clause 8.2
become operative) the offer in terms of this clause 7 shall be deemed to be
withdrawn and substituted with the deemed offer in terms of clause 8.2.
7.7. Any disposal of shares to any non-shareholder of AMC shall be subject
to the condition that the transferee shall undertake in writing not to operate
in competition to the business of any company in the AMC group whilst it is a
shareholder of AMC.
7.8. Subject to clause 7.9, transfer of any shares acquired in terms of this
clause 7 shall be given to the person so acquiring them.
7.9. Notwithstanding anything to the contrary herein contained, no share in
AMC shall be disposed of, pledged or transferred by AFRICA FINANCE to a
non-shareholder including the heirs or beneficiaries of any shareholder unless
that non-shareholder agrees to be bound by any written agreement in force
between AMC and its shareholders and/or between the shareholders of AMC
governing their relationship as shareholders in AMC and nominates a chosen
address for the purposes of clause 15.
7.10. IF AFRICA FINANCE disposes of its shares as contemplated in this
clause 7, it shall be entitled to stipulate as a condition of such sale that -
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7.10.1. AFRICA FINANCE shall be released pro rata to the number of shares
sold, as a surety or guarantor or indemnitor on behalf of AMC, subject to the
purchaser(s) of the shares in question binding himself as surety or guarantor or
indemnitor in his stead; or
7.10.2. if the release contemplated in clause 7.10.1 cannot be achieved, or
pending such release being implemented, the disposing shareholder shall be
indemnified by the purchaser of the shares pro rata to the number of shares sold
against any claims made against the disposing shareholder by reason of such
suretyship, guarantee or indemnity. Such purchaser shall be liable for any
amount payable in terms hereof together with value-added tax thereon.
7.11. The transferee of any shares and loan accounts acquired pursuant to
this clause 7, shall pay the stamp duty and any other similar duties payable
thereon.
7.12. Notwithstanding anything to the contrary herein contained, the
provisions of this clause 7 will cease to be of any force and effect in the
event that AMC becomes listed on any recognised stock exchange.
8. FORCED SALES FORCED SALES
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8.1. If AFRICA FINANCE or CAC or CHANCELLOR CORPORATION is wound up or
liquidated, whether provisionally or finally, or if the CC ordinary stock ceases
to be or is suspended from trading on the NASD bulletin board for whatever
reason (provided that the provisions of this clause 8 shall not apply in the
event of a sale of the entire issued share capital of CHANCELLOR CORPORATION),
then the provisions of this clause 8 shall apply. Reference hereinafter in this
clause 8 to AFRICA FINANCE or to CAC or to CHANCELLOR CORPORATION shall include
the provisional or final liquidator of AFRICA FINANCE or CAC or CHANCELLOR
CORPORATION, as the case may be.
8.2.
8.2.1. As soon as an event contemplated in clause 8.1 occurs, AFRICA FINANCE
shall notify NAOF-SUB in writing.
8.2.2. Within 60 (sixty) days after learning of the occurrence of any event
contemplated in clause 8.1, NAOF-SUB may, by notice in writing to AFRICA
FINANCE, compel AFRICA FINANCE to offer its shares in AMC to NAOF-SUB at a price
sounding in money in South African currency being the fair value of the shares
to be agreed between AFRICA FINANCE and NAOF-SUB or, failing agreement, to be
determined by the auditors of AMC, who shall act as experts and not as
arbitrators.
8.2.3. The auditors' decision as to the fair value of the shares shall be
final and binding on the parties. The auditors' charges shall be paid by
NAOF-SUB and AFRICA FINANCE pro rata to their respective shareholdings in AMC.
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8.2.4. In determining the value of such shares, no deduction shall be made
for the fact that the shares in question constitute a minority interest in AMC
nor for the fact that new management shall or may be managing AMC nor shall any
premium be added for the fact that the shares in question constitute a majority
or controlling interest in AMC nor, if the purchaser is an existing shareholder,
for the fact that by purchasing the shares in question, such shareholder would
be in a position to control AMC's affairs.
8.2.5. As soon as the price has been agreed or determined as aforesaid and
notified in writing to AFRICA FINANCE and NAOF-SUB, AFRICA FINANCE shall be
deemed to have offered the shares to NAOF-SUB at the price as agreed or
determined. Such offer shall be open for acceptance thereafter for a period of
20 (twenty) days and failing acceptance thereof in respect of all such shares
within such period shall lapse. Such lapsing of the offer shall not affect the
continued application of the pre-emptive provisions of this agreement. If the
offer is accepted, the effective date of the sale shall be the day prior to the
date upon which the event contemplated in clause 8.1, which triggered the offer,
occurs.
8.2.6. The purchase price so agreed or determined, if NAOF-SUB accepts the
offer, shall be payable in cash by NAOF-SUB within 30 (thirty) days of such
agreement or determination.
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8.2.7. The shares shall be delivered in transferable form to NAOF-SUB
against payment of the purchase price. If AFRICA FINANCE does not deliver the
shares in transferable form on due date, NAOF-SUB is irrevocably and in rem suam
appointed as the attorney and agent of AFRICA FINANCE to sign the necessary
transfer forms.
8.2.8. If the offer is not accepted by NAOF-SUB in respect of such shares,
AFRICA FINANCE shall be entitled to retain such shares subject to the remaining
provisions of this agreement.
8.3. The provisions of clauses 7.8, 7.10 and 7.11 shall apply mutatis
mutandis to this clause 8.
9. SALE OF SERIES "B" STOCK BY NAOF-SUB SALE OF SERIES B STOCK BY
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NAOF-SUB
--
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9.1. If GRAHAM EDWARD NICHOLLS or NAOF-SUB wish to dispose of any series "B"
stock held by them, they shall not be entitled to do so unless they first offer
the relevant series "B" stock for sale to CHANCELLOR CORPORATION or its nominee.
Such offer shall be made in writing by telefax to CHANCELLOR CORPORATION's
telefax number specified in clause 15.1.3, and marked for the attention of "the
Chairman of CHANCELLOR CORPORATION". Such offer shall be irrevocable for a
period of 5 (five) days from the time of despatch of the telefax notice to
CHANCELLOR CORPORATION. The series "B" stock specified in the notice as
aforesaid shall be deemed to have been offered during the aforementioned 5
(five) day period at the most favourable price to NAOF-SUB quoted on the NASD
bulletin board.
9.2. CHANCELLOR CORPORATION shall be entitled to accept the offer before the
expiry of the 5 (five) day period referred to in clause 9.1 by telefax notice to
NAOF-SUB's telefax number specified in clause 15.1.2, to be received by NAOF-SUB
before the expiry of the aforementioned 5 (five) day period. If such acceptance
is received within the time period specified in this clause 9, then a sale of
the series "B" stock offered by NAOF-SUB in terms hereof shall be deemed to have
been concluded with effect at the time of the receipt by NAOF-SUB of such
acceptance. AFRICA FINANCE shall forthwith pay the purchase price in respect of
the series "B" stock sold to it in full in cash without set-off or deduction
whatsoever, to NAOF-SUB at the address of NAOF-SUB set forth in clause 15.
9.3. If payment in full is not received as aforementioned by NAOF-SUB before
the expiry of 5 (five) days from the date of receipt of the acceptance notice
referred to in clause 9.2 then the sale contemplated herein shall lapse and the
provisions of this clause 9 shall cease forthwith to have any further force or
effect as between the parties.
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9.4. If within 5 (five) days after the receipt of the offer, it is not
accepted in writing in respect of all the shares offered to CHANCELLOR
CORPORATION or its nominee, then, GRAHAM EDWARD NICHOLLS or NAOF-SUB may within
a further 30 (thirty) days, but not thereafter, without again making an offer to
CHANCELLOR CORPORATION in terms of clause 9, dispose of all the shares offered.
10. APPOINTMENT OF DIRECTORS APPOINTMENT OF DIRECTORS
-------------------------- --------------------------
10.1. If AFRICA FINANCE disposes of all of its shares or the requisite part
which entitles it to appoint a director it shall remove any director of the
company appointed by it without any claims for compensation -
10.1.1. if such shares are acquired by other existing shareholders in AMC,
on payment in full of the purchase price by those purchasing shareholders; or
10.1.2. if such shares are to be acquired by a third party, on conclusion of
the sale agreement with the third party,
and AFRICA FINANCE, which appointed or nominated such director, indemnifies the
company if the directors fail or refuse to resign.
11. WARRANTIES BY CHANCELLOR CORPORATION WARRANTIES BY CHANCELLOR
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CORPORATION
-----
CHANCELLOR CORPORATION warrants in favour of AMC and NAOF-SUB that -
11.1. CHANCELLOR CORPORATION is duly incorporated, in good standing under
the laws of the Commonwealth of Massachussets, has all requisite corporate
powers and authority to own and operate its properties and assets and to carry
on its business as now conducted and as presently proposed to be conducted and
to execute and deliver this agreement;
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11.2. CHANCELLOR CORPORATION has all requisite corporate power and authority
to issue and sell the series "B" stock and the CC ordinary stock, issuable upon
conversion thereof;
11.3. CHANCELLOR CORPORATION has all requisite corporate power and authority
to carry out the provisions of this agreement;
11.4. CHANCELLOR CORPORATION is duly qualified and authorised to transact
business and is in good standing as a foreign corporation in each jurisdiction
in which failure to so qualify would have a material adverse effect on its
business, properties, prospects or financial conditions;
11.5. all corporate action on the part of CHANCELLOR CORPORATION, its
officers, directors and stockholders, necessary for the authorisation, execution
and delivery of this agreement and delivery of the series "B" stock being sold
and transferred hereunder and the CC ordinary stock issuable upon conversion
thereof, has been taken or will be taken prior to the closing date;
11.6. the sale and transfer of the series "B" stock is not and the
subsequent conversion of the series "B" stock into CC ordinary stock will not be
subject to any pre-emptive rights or rights of first refusal that have not been
properly waived or complied with;
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11.7. the series "B" stock sold and transferred in terms hereof shall, when
issued, sold, transferred and delivered in terms hereof, be duly and validly
issued, fully paid and will be free of any restrictions in respect of transfer
save for restrictions on transfer contemplated in terms of this agreement. The
CC ordinary stock issuable upon conversion of the series "B" stock being sold
and transferred hereunder has been duly and validly reserved for issuance and,
upon issuance in accordance with the terms of the Restated Certificate, shall be
duly and validly issued, fully paid-up and will be free of restrictions on
transfer other than restrictions contemplated in terms of this agreement;
11.8. no consent, approval, qualification, order or authorisation of, or
filing with any local, state or federal governmental authority is required on
the part of CHANCELLOR CORPORATION in connection with it's valid execution,
delivery or performance of this agreement, the sale and transfer of the series
"B" stock by it or the issuance of the CC ordinary stock upon conversion of the
series "B" stock, save for -
11.8.1. the filing of the Restated Certificate with the Secretary of State
of the Commonwealth of Massachussets; and
11.8.2. such filings as have been made prior to the closing date (except any
notices of sale required to be filed with the Securities and Exchange Commission
under Regulation D of the Securities Act of 1933, as amended), or such
post-closing date filings as may be required under the applicable state
securities laws, which shall be timely filed within the applicable periods
therefor;
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11.9. all authorisations, approvals, or permits, if any, of any governmental
authority or regulatory body of the United States of America or of any states
that are required in connection with the lawful issuance and sale and transfer
of the series "B" stock sold and transferred in terms of this agreement, shall
be duly obtained and effective as of the closing date.
12. FURTHER WARRANTIES BY AFRICA FINANCE AND CHANCELLOR CORPORATION
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FURTHER WARRANTIES BY AFRICA FINANCE AND CHANCELLOR CORPORATION
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AFRICA FINANCE and CHANCELLOR CORPORATION jointly and severally warrant in
favour of AMC that, on the effective date and the closing date -
12.1. both AFRICA FINANCE and CHANCELLOR CORPORATION are and will be
regularly incorporated and established according to the laws of Mauritius and
the Commonwealth of Massachussets, respectively;
12.2. no steps have been will have been taken to liquidate, whether finally
or provisionally, or to deregister AFRICA FINANCE or CHANCELLOR CORPORATION;
12.3. AFRICA FINANCE and CHANCELLOR CORPORATION have or will have sufficient
share capital and are and will be entitled and able to give free and
unencumbered title of the series "B" stock and the CC ordinary stock, as
contemplated in this agreement, to the relevant parties as contemplated in this
agreement;
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12.4. each of AFRICA FINANCE and CHANCELLOR CORPORATION is and shall be
authorised and competent to transfer and deliver the CC ordinary stock and the
series "B" stock to the relevant parties, as contemplated in this agreement;
12.5. the rights, terms and conditions of the series "B" stock, as
determined and set forth in ANNEXURE B hereto, are a complete and accurate
description, in all respects, of all the rights, terms and conditions attaching
to the series "B" stock.
13. SUBMISSION TO JURISDICTION SUBMISSION TO JURISDICTION
---------------------------- ----------------------------
The parties agree that any legal action or proceedings arising out of or in
connection with this agreement may be brought in the High Court of South Africa
(Witwatersrand Local Division) (or any successor to that court) and irrevocably
submit to the non-exclusive jurisdiction of such court. Each appoints any
person (at the address chosen in terms of clause 15) to receive for and on its
behalf service of process in such jurisdiction in any legal action or
proceedings with respect to this agreement. The parties irrevocably waive any
objection they may now or hereafter have that such action or proceeding has been
brought in an inconvenient forum. Nothing herein shall affect the right to
serve process in any manner permitted by law. The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the right of
any of the parties to take proceedings against any other party in whatever other
jurisdiction the relevant party shall consider appropriate nor shall the taking
of proceedings in any one or more jurisdictions automatically preclude the
taking of proceedings in any other jurisdiction whether concurrently or not.
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The parties hereto irrevocably agree not to claim for itself or its assets
immunity from suit, execution, attachment or otherwise, to the full extent
permitted by the laws of such jurisdiction.
140 BREACH BREACH
------ ------
If any party breaches any material provision or term of this agreement (other
than those which contain their own remedies or limit the remedies in the event
of a breach thereof) and fails to remedy such breach within 5 (five) days of
receipt of written notice requiring it to do so (or if it is not reasonably
possible to remedy the breach within 5 (five) days, within such further period
as may be reasonable in the circumstances provided that the party in breach
furnishes evidence within the period of 5 (five) days, reasonably satisfactory
to the other party, that it has taken whatever steps are available to it, to
commence remedying the breach)) then the aggrieved party shall be entitled
without notice, in addition to any other remedy available to it at law or under
this agreement, including obtaining an interdict, to cancel this agreement or to
claim specific performance of any obligation whether or not the due date for
performance has arrived, in either event without prejudice to the aggrieved
party's right to claim damages.
150 ADDRESSES ADDRESSES
--------- ---------
15.1. The parties choose as their addresses for all purposes under this
agreement, whether in respect of court process, notices or other documents or
communications of whatsoever nature (including the exercise of any option), the
following addresses -
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15.1.1. AFRICA FINANCE:
Physical: c/o International Management Mauritius Limited
Les Cascades Building
Edith Cavell Street
Port Louis
Republic of Mauritius
Postal: c/o International Management Mauritius Limited
Les Cascades Building
Edith Cavell Street
Port Louis
Republic of Mauritius
Telefax: 230 212 9833
15.1.2. NAOF-SUB:
Physical: 9th Floor
Ten Sixty Six
35 Pritchard Street
Johannesburg
2001
Postal: PO Box 9431
Johannesburg
2000
Telefax: 011 836 0029
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15.1.3. CHANCELLOR CORPORATION:
Physical: 210 South Street
Boston
Massachussets
02111
USA
Postal: 210 South Street
Boston
Massachussets
02111
USA
Telefax: 617 422 5851
15.1.4. AMC:
Physical: 127 Van Riebeeck Avenue
Edenvale
1610
Postal: 127 Van Riebeeck Avenue
Edenvale
1610
Telefax: 011 452 6161
15.1.5. MANAGEMENT:
Physical: 127 Van Riebeeck Avenue
Edenvale
1610
Postal: 127 Van Riebeeck Avenue
Edenvale
1610
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Telefax: 011 452 6161
15.1.6. GRAHAM EDWARD NICHOLLS:
Physical: 127 Van Riebeeck Avenue
Edenvale
1610
Postal: 127 Van Riebeeck Avenue
Edenvale
1610
Telefax: 011 452 6161
15.1.7. ROBERT CHARLES DRAKE:
Physical: 127 Van Riebeeck Avenue
Edenvale
1610
Postal: 127 Van Riebeeck Avenue
Edenvale
1610
Telefax: 011 452 06161
15.1.8. HAROLD JOSHUA MANNE:
Physical: 127 Van Riebeeck Avenue
Edenvale
1610
Postal: 127 Van Riebeeck Avenue
Edenvale
1610
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Telefax: 011 452 6161
15.2. Any notice or communication required or permitted to be given in terms
of this agreement shall be valid and effective only if in writing but it shall
be competent to give notice by telefax.
15.3. Any party may by notice to any other party change the physical address
chosen by that party to another physical address where postal delivery occurs or
its postal address or its telefax number, provided that the change shall become
effective vis- -vis that addressee on the 10th (tenth) day from the receipt of
the notice by the addressee.
15.4. Any notice to a party -
15.4.1. delivered by hand to a responsible person during ordinary business
hours at the physical address chosen in terms hereof shall be deemed to have
been received on the day of delivery; or
15.4.2. sent by telefax to its chosen telefax number stipulated in clause
15.1, shall be deemed to have been received on the date of despatch (unless the
contrary is proved).
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15.5. Notwithstanding anything to the contrary herein contained a written
notice or communication actually received by a party shall be an adequate
written notice or communication to it notwithstanding that it was not sent to or
delivered at its chosen address.
160 WHOLE AGREEMENT, NO AMENDMENT WHOLE AGREEMENT, NO AMENDMENT
-------------------------------- --------------------------------
16.1. This agreement constitutes the whole agreement between the parties
relating to the subject matter hereof.
16.2. No amendment or consensual cancellation of this agreement or any
provision or term hereof or of any agreement, bill of exchange or other document
issued or executed pursuant to or in terms of this agreement and no settlement
of any disputes arising under this agreement and no extension of time, waiver or
relaxation or suspension of any of the provisions or terms of this agreement or
of any agreement, bill of exchange or other document issued pursuant to or in
terms of this agreement shall be binding unless recorded in a written document
signed by the parties (or in the case of an extension of time, waiver or
relaxation or suspension, signed by the party granting such extension, waiver or
relaxation). Any such extension, waiver or relaxation or suspension which is so
given or made shall be strictly construed as relating strictly to the matter in
respect whereof it was made or given.
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16.3. No extension of time or waiver or relaxation of any of the provisions
or terms of this agreement or any agreement, bill of exchange or other document
issued or executed pursuant to or in terms of this agreement, shall operate as
an estoppel against any party in respect of its rights under this agreement, nor
shall it operate so as to preclude such party thereafter from exercising its
rights strictly in accordance with this agreement.
16.4. To the extent permissible by law no party shall be bound by any
express or implied term, representation, warranty, promise or the like not
recorded herein, whether it induced the contract and/or whether it was negligent
or not.
SIGNED by the parties and witnessed on the following dates and at the following
places respectively:
DATE PLACE WITNESS SIGNATURE
- ---- ----- ------- ---------
For: AFRICA FINANCE CORPORATION
1.
2.
For: NEW AFRICA OPPORTUNITY FUND SUB TWO LLC
1.
2.
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DATE PLACE WITNESS SIGNATURE
- ---- ----- ------- ---------
For: CHANCELLOR CORPORATION
1.
2.
For: AFINTA MOTOR CORPORATION (PROPRIETARY) LIMITED
1.
2.
1.
GRAHAM EDWARD NICHOLLS
2.
1.
ROBERT CHARLES DRAKE
2.
1.
HAROLD JOSHUA MANNE
2.
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ANNEXURE AANNEXURE A
----------------------
01521PAM.JLB
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ANNEXURE B ANNEXURE B
----------- -----------
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ANNEXURE C ANNEXURE C
----------- -----------
[see clause 6.1]
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TABLE OF CONTENTS
CLAUSE NO. DESCRIPTION PAGE
1. INTERPRETATION AND PRELIMINARY 2
2. RECORDAL 7
3. REPAYMENT OF LOAN ACCOUNT 7
4. DEBT/EQUITY CONVERSION 7
5. SHARE SWOP 8
6. WORLDWIDE DISTRIBUTION RIGHTS 10
7. RIGHTS OF FIRST REFUSAL AND TRANSFERS OF SHARES 11
8. FORCED SALES 14
9. SALE OF SERIES "B" STOCK BY NAOF-SUB 17
10. APPOINTMENT OF DIRECTORS 19
11. WARRANTIES BY CHANCELLOR CORPORATION 19
12. FURTHER WARRANTIES BY AFRICA FINANCE AND CHANCELLOR CORPORATION 22
13. SUBMISSION TO JURISDICTION 23
14. BREACH 24
15. ADDRESSES 24
16. WHOLE AGREEMENT, NO AMENDMENT 29
ANNEXURE A 1
ANNEXURE B 1
ANNEXURE C 1