Shareholders Agreement

SHAREHOLDERS AGREEMENT INDEX NO CLAUSE HEADINGS PAGE PART 1 ............................................................................................. 1 INTRODUCTORY ............................................................................. 1 1 2 3 PARTIES .......................................................................................... 1 INTERPRETATION........................................................................... 1 INTRODUCTION .............................................................................. 5 PART 2 ............................................................................................. 6 THE COMPANY................................................................................ 6 4 5 ADMINISTRATIVE MATTERS .......................................................... 6 ARTICLES OF ASSOCIATION ......................................................... 6 PART 3 ............................................................................................. 7 GOVERNANCE ................................................................................ 7 6 7 8 9 10 11 DIRECTORS AND MEETINGS......................................................... 7 REMUNERATION OF DIRECTORS ............................................... 10 REMUNERATION OF VUE DU CAP .............................................. 10 CONDUCT OF THE BUSINESS OF THE COMPANY .................... 10 MATERIAL DECISIONS ................................................................. 13 DIVIDEND POLICY ......................................................................... 17 PART 4 ........................................................................................... 17 FUNDING ....................................................................................... 17 12 FUNDING ....................................................................................... 17 PART 5 ........................................................................................... 20 SHARE TRANSFERS AND EXIT PROVISIONS ............................ 20 13 14 15 16 16 SHARE TRANSFERS: GENERAL PRINCIPLES............................ 20 PRE-EMPTIVE RIGHTS ................................................................. 21 DEEMED OFFER ........................................................................... 24 COME ALONG AND TAG ALONG ................................................. 25 VALUATION.................................................................................... 26 1 of 43 NO CLAUSE HEADINGS PAGE PART 6 ........................................................................................... 28 CONFIDENTIALITY AND RESTRAINT .......................................... 28 17 CONFIDENTIALITY ........................................................................ 28 PART 7 ........................................................................................... 29 GENERAL PROVISIONS ............................................................... 29 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 LIMITED REMEDY IN EVENT OF BREACH .................................. 29 ARBITRATION ................................................................................ 30 PAYMENTS .................................................................................... 34 GOOD FAITH.................................................................................. 35 CESSION ........................................................................................ 36 PERFORMANCE ............................................................................ 36 NOTICES AND DOMICILIUM ......................................................... 36 NEW LAWS AND INABILITY TO PERFORM ................................. 37 SEVERABILITY .............................................................................. 38 OPERATION ................................................................................... 38 INDEPENDENT ADVICE ................................................................ 39 WHOLE AGREEMENT ................................................................... 39 VARIATION..................................................................................... 39 RELAXATION ................................................................................. 39 COSTS ........................................................................................... 40 SIGNATURE ................................................................................... 40 Initials SHAREHOLDERS AGREEMENT PART 1 INTRODUCTORY 1 PARTIES 1.1 The parties to this agreement are 1.1.1 ______________________ shareholder]__”); 1.1.2 ______________________ shareholder__”); 1.1.3 ______________________ company”). 1.2 The parties agree as set out below. (Proprietary) Limited (“the (Proprietary) Limited (“__[second (Proprietary) Limited (“__[first 2 INTERPRETATION context 2.1.1 2.1.2 “the Act” means the Companies Act, No. 61 of 1973, as amended; “[second shareholder]” means ______________________ 2.1 In this agreement, unless inconsistent with or otherwise indicated by the (Proprietary) Limited, a private company with limited liability duly registered in accordance with the laws of the Republic of South Africa, herein represented by ______________________ 2.1.3 “the/this agreement” means the agreement as set out in this document; 2.1.4 “the business” means the business of the company which shall be ______________________ and shall include as well any other Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 2 of 43 business as may be lawfully conducted by the company from time to time; 2.1.5 “business day” means a day which is not a Saturday, Sunday or South African public holiday; 2.1.6 “claims” means any amount from time to time owing by the company to any shareholder on loan account; 2.1.7 “the company” means ______________________ (Proprietary) Limited, a private company with limited liability duly registered in accordance with the laws of the Republic of South Africa, herein represented by ______________________; 2.1.8 "control" shall have the meaning assigned thereto in the South African Code on Takeovers and Mergers or its replacing legislation from time to time and "controlled" and "controlling" shall have corresponding meanings; 2.1.9 “the directors” means the board of directors of the company; 2.1.10 “dispose” means sell, alienate, transfer in any manner or otherwise dispose of; 2.1.11 “effective date” means, ______________________; 2.1.12 “encumber” means cede, pledge or in any other manner encumber for the purpose of creating a security; 2.1.13 “[second shareholder]” means ______________________ notwithstanding the signature date, (Proprietary) Limited, a private company with limited liability duly registered in accordance with the laws of the Republic of South Africa, herein represented by ______________________; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 3 of 43 2.1.14 “including” (or words of similar meaning) means to include without limitation, and if the expression is used with reference to specific examples the “eiusdem generis” rule shall not apply; 2.1.15 “law” means any law of general application and includes the common law and any statute, constitution, decree, treaty, regulation, directive, ordinance, by-law, order or any other enactment of legislative measure of government (including local and provincial government) statutory or regulatory body which has the force of law; 2.1.16 “market value” means the market value of shares and claims, as determined in accordance with 17; 2.1.17 “person” means any person, company, close corporation, trust, partnership or other entity whether or not having separate legal personality; 2.1.18 "prime rate" means the publicly quoted basic rate of interest (as certified by a manager of ______________________ Bank Limited whose appointment and authority it shall not be necessary to prove) at which that bank lends on unsecured overdraft to its most favoured customers in the private sector, compounded monthly in arrears and calculated on a 365 (three hundred and sixty five) day year factor irrespective of whether the year is a leap year or not; 2.1.19 “the shareholders” means the shareholders of the company from time to time; 2.1.20 “shareholders interests” means the shares of a shareholder, together with a proportionate share of his claims, if any; 2.1.21 “shares” means ordinary par value shares in the capital of the company; 2.1.22 “the signature date” means the date on which this agreement is signed by the last party hereto; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 4 of 43 2.1.23 “writing” (or words of similar meaning) means legible writing and in English and excludes any form of electronic communication contemplated in the Electronic Communications and Transactions Act, No. 25 of 2002. 2.2 Any reference to – 2.2.1 2.2.2 2.2.3 the singular includes the plural and vice versa; natural persons includes juristic persons and vice versa; any one sex or gender includes the other sexes or genders, as the case may be; 2.2.4 any statute, constitution, decree, treaty, regulation, directive, ordinance, by-law, order or any other enactment or legislative measure of government (including local or provincial government) statutory or regulatory body which has the force of law means the relevant enactment or legislative measure as at the date of signature of this agreement and as amended or re-enacted from time to time; 2.2.5 a party includes a reference to that party’s successors in title and assigns allowed at law. 2.3 The words “shall” and “will” and “must” used in the context of any obligation or restriction imposed on a party have the same meaning. 2.4 The clause headings in this agreement have been inserted for convenience only and shall not be taken into account in its interpretation. 2.5 If any provision in a definition is a substantive provision conferring rights or imposing obligations on any party, effect shall be given to that provision as if it were a substantive clause in the body of the agreement, notwithstanding that it is only contained in the interpretation clause. 2.6 If any period is referred to in this agreement by way of a reference to a number of days or weeks or months or other intervals, the period shall be Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 5 of 43 reckoned exclusively of the 1st (first) day and inclusively of the last day of the relevant interval, 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. 2.7 If the due date for performance of any obligation in terms of this agreement is a day which is not a business day then (unless otherwise stipulated) the due date for performance of the relevant obligation shall be the immediately preceding business day. 2.8 If any obligation or act is required to be performed on a particular day it shall be performed (unless otherwise stipulated) by 16h00 (local time at the place where the obligation or act is required to be performed) on that day. 2.9 This agreement shall be governed, interpreted and enforced in accordance with the laws of the Republic of South Africa from time to time. 2.10 If amounts or figures are specified in numerals and in words and if there is any discrepancy between the numerals and the words then the words shall apply. 2.11 No provision of this agreement shall (unless otherwise stipulated) constitute a stipulation for the benefit of any person (stipulatio alteri) who is not a party to this agreement. 2.12 The rule of construction that this agreement shall be interpreted against the party responsible for the drafting of this agreement, shall not apply. 2.13 The use of any expression which is relevant to a process available under South African law (including “liquidation”, “winding-up”, “insolvency” and “judicial management”) shall, if any party to this agreement is subject to the laws of any other jurisdiction, be interpreted as to include any equivalent or similar process under the law of that other jurisdiction. 3 INTRODUCTION company is the holder of a licence permitting it to ______________________. Initials 3.1 The shareholders AGREEMENT blank 071201 07 April 2009 Page 6 of 43 3.2 The purpose of this agreement is to record and regulate, inter alia 3.2.1 the shareholding in the company which it is recorded is ______________________. It being recorded that all shareholders have been allotted their respective shareholding at par; 3.2.2 3.2.3 3.2.4 3.2.5 the funding of the company; the relationship between the company and its shareholders; the relationship between the shareholders inter se; and matters ancillary and/or incidental to the aforegoing. PART 2 THE COMPANY 4 ADMINISTRATIVE MATTERS and in the event of there being no agreement between the parties any one of the firms of auditors which constitutes what is colloquially known in South Africa as the big four as may be chosen by the president of the South African Institute of Chartered Accountants at the request of either party. 4.2 The financial year of the company shall end on 28 February of each year. 4.3 ______________________ Bank Limited, or such bankers as the directors may from time to time determine, shall be the bankers of the company. 4.1 The first auditors shall be that firm as is unanimously agreed to by the parties 5 ARTICLES OF ASSOCIATION may conflict with the provisions of this agreement – 5.1.1 any shareholder may require the articles of association of the company to be amended accordingly; and Initials 5.1 To the extent that the provisions of the articles of association of the company shareholders AGREEMENT blank 071201 07 April 2009 Page 7 of 43 5.1.2 the shareholders shall vote in favour of all resolutions of the company necessary to amend the articles of association in terms of this 5.1.1. 5.2 Without detracting from the provisions of 5.1, to the extent that the provisions of this agreement may conflict with the provisions of the company's articles of association, the provisions of this agreement shall take precedence and shall be given effect to accordingly by the parties. PART 3 GOVERNANCE 6 DIRECTORS AND MEETINGS have more than 000 (number) directors. 6.2 The shareholders hereby agree that – 6.2.1 [first shareholder] shall be entitled, but not obliged, to nominate for appointment to the board, 000 (number) directors; 6.2.2 [second shareholder] shall be entitled but not obliged to nominate for appointment to the board, 000 (number) directors. 6.3 Each director shall be entitled to appoint an alternate director to act during his absence from time to time, provided that such alternate director shall be suitably qualified to perform the functions entrusted by the board to the director he is replacing. 6.4 A shareholder entitled to appoint a director shall be entitled to request the removal of any director appointed by it and to replace the director appointed by it if that director, for any reason whatsoever, ceases to hold office. 6.5 The shareholders will from time to time vote for 6.5.1 the appointment of any shareholder’s nominees; and Initials 6.1 Until the shareholders otherwise unanimously agree, the company shall not shareholders AGREEMENT blank 071201 07 April 2009 Page 8 of 43 6.5.2 the removal of a shareholder’s nominee when so requested by that shareholder; 6.5.3 the re-appointment of the other shareholder’s nominees in the event of removal or disqualification as a director of any of the other shareholder’s nominees. 6.6 All decisions taken at a meeting of directors shall be taken by majority vote. 6.7 A quorum for a meeting of directors shall be 000 (number) or their alternatives, provided that such directors shall have been nominated as to 000 (number) by [first shareholder] and as to 000 (number) by [second shareholder]. 6.8 If a quorum is not present within 30 (thirty) minutes after the time appointed for the commencement of any meeting of the directors, that meeting shall stand adjourned until a day, 5 (five) days after the date scheduled for the meeting, at the same time and place, or such other date, time or place as the chairperson of the meeting shall appoint. The adjourned meeting may only deal with the matters which were on the agenda of the meeting which was adjourned. 6.9 If any directors’ meeting is adjourned as envisaged in 6.8 above, the company shall use its best endeavours to inform the directors who were not present at that meeting that it was adjourned, and of the time, date and place to which that meeting has been adjourned. 6.10 The directors shall meet at such times as the business of the company requires and as may be in any event requested by any of the directors. 6.11 Each party shall procure that each director appointed by it shall upon his/her appointment furnish the company in writing with a postal address and a telefacsimile number at which notice of meetings may be given to him/her. 6.12 Written notice of meetings of directors shall be - Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 9 of 43 6.12.1 given not less than 5 (five) business days ahead of the date scheduled for such meetings, at the address or telefacsimile provided in terms of 6.11 above; and 6.12.2 given in a manner calculated to ensure that meetings are, as far as reasonably possible, held at a time and place convenient to all directors. 6.13 The directors shall by majority resolution determine which of the directors shall be the chairman of the board for the time being. The chairman shall also be the chairman of any shareholders meeting. The chairman shall not have a second or casting vote at meetings of directors or shareholders in addition to his deliberative vote. 6.14 An annual general meeting of shareholders shall be held within the time periods prescribed in the Act. Every shareholder shall be entitled at any time to convene a shareholders meeting in the manner prescribed in the Act and the articles of association of the company. 6.15 If a quorum is not present within 30 (thirty) minutes after the time appointed for the commencement of any meeting of shareholders, that meeting shall stand adjourned until a day, 5 (five) days after the date scheduled for the meeting, at the same time and place, or such other date, time or place as the chairperson of the meeting shall appoint. The adjourned meeting may only deal with the matters which were on the agenda of the meeting which was adjourned. 6.16 A resolution of directors or shareholders (as the case may be) signed by all persons required to be present at a meeting of directors or shareholders (as the case may be) to constitute a quorum shall be as valid and effective as if it had been adopted by a duly convened meeting of directors or shareholders (as the case may be). 6.17 The directors or shareholders may participate in and act at any meeting through the use of a conference telephone or other communication Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 10 of 43 equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting shall constitute attendance and presence in person at the meeting by the person or persons so participating. 6.18 Each shareholder shall procure and hereby warrants that every director appointed by it shall exercise his/her voting rights in such a manner as to implement this agreement and any decisions made pursuant thereto. 7 REMUNERATION OF DIRECTORS company in general meeting. 7.1 Each director shall receive such remuneration as shall be agreed to by the 7.2 The company shall bear all reasonable travelling, accommodation or other costs incurred in connection with the performance of the duties of a director. 8 REMUNERATION OF [FIRST SHAREHOLDER] carried out all steps necessary to identify a site for the business of the company and have carried out extensive work for and on behalf of the company. Accordingly the parties hereto agree that they will until such time as the company has available funds advance to the company on loan account in equal shares the amount to be paid to [first shareholder] for the said fee. 8.1 The parties hereto record that the directors of [first shareholder] have 9 CONDUCT OF THE BUSINESS OF THE COMPANY and control of the management of the company and the formulation of the policies to be applied in the conduct of the business. 9.1 The directors shall be responsible for the appointment and overall direction 9.2 The day to day management and control of the affairs and business of the company shall be the responsibility of the managing director of the company Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 11 of 43 and such other executive directors and senior employees of the company as are required to report to him (“management”). 9.3 Subject to 9.7, management shall at all times – 9.3.1 9.3.2 9.3.3 9.3.4 9.3.5 9.3.6 exercise the requisite standard of care and due diligence; act in a timely and workmanlike manner; act in the best interests of the company and its subsidiaries; carry out their duties in a professional and ethical manner; perform their functions in conformity with sound business practice; procure that the company and each of its subsidiaries shall keep proper accounting records; and 9.3.7 prepare or procure the preparation of monthly management accounts of each of the company and its subsidiaries made up to the last day of each accounting month, and deliver a copy of such management accounts to each of the shareholders within a reasonable period after the end of the month to which they relate, prepare annual accounts and deliver a copy of such accounts to each of the shareholders within 4 (four) months of the end of the financial year to which they relate (provided that this obligation shall only commence at the end of the current financial year). 9.4 Each of the shareholders undertakes, insofar as it lies within such shareholder's competence, to procure compliance with the aforegoing. 9.5 The shareholders shall, insofar as it lies within their competence, procure that management shall every year, by no later than 30 (thirty) days prior to the end of the financial year of the company, submit to the directors for approval, a proposed business plan, budgets and capital programmes for the ensuing financial years (“business plan”) (provided that this obligation shall only commence at the end of the current financial year). Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 12 of 43 9.6 The directors shall evaluate and amend the business plan to the extent which they deem fit and shall provide management as soon as possible, but in any event no later than the end of the current financial year, with the approved business plan and any further proposals which the directors might have in relation to the conduct of the business of the company in the ensuing years. 9.7 Management shall – 9.7.1 ensure that the business plan is implemented, and is not departed from in any material respect without the consent of the directors (and for this purpose any departure shall be considered “material” if it represents a percentage change in value of 10% (ten per centum) or more in relation to the business plan); 9.7.2 regularly report to the directors with regard to the implementation of that plan; and 9.7.3 in those reports, specify any departures from any particular business plan and furnish the reasons for those departures. 9.8 Notwithstanding anything to the contrary elsewhere contained in this agreement, management shall – 9.8.1 9.8.2 not have the power to decide on any of the matters specified in 10; act within the scope of and limitations on their authority determined by the board from time to time; 9.8.3 9.8.4 be subject in all respects to the directions of the board; and give effect to the applicable terms and conditions of this agreement. 9.9 Without in any way limiting or affecting the generality of the aforegoing, management shall – 9.9.1 comply with all statutes, regulations, consents and other statutory requirements relating to the company, its affairs and business; and Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 13 of 43 9.9.2 exercise and perform such of the powers and duties of the board as the board shall from time to time delegate to them subject to such directives and restrictions as the board may from time to time give or impose. 9.10 Each shareholder or its representative shall have the right at any time and at its own expense to examine the books and records, operations and premises of the company and to require from the company, which shall immediately provide the same, any reported information relating to any aspects of its business and affairs. 10 MATERIAL DECISIONS 10.1 Shareholders (insofar as they lawfully can do so) shall exercise their powers in relation to the company to ensure that 10.1.1 the company carries on and conducts the business in a proper and efficient manner in accordance with sound business practice and for its own benefit; and 10.1.2 the company performs and complies with all obligations on its part under this agreement and complies with the restrictions imposed on it by the articles of association of the company. 10.2 The provisions of 10.1 shall not be construed so as to confer any rights on any person who is not a party to this agreement. 10.3 The parties undertake to procure that the company shall not engage in, agree to, perform or undertake any of the acts, procedures or matters hereinafter specified, except as is approved by a shareholders resolution to which all shareholders have assented, or with the written consent of all shareholders 10.3.1 the company to materially change the nature of or discontinue its business; 10.3.2 the suspension, cessation or abandonment of a major portion of the company’s business; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 14 of 43 10.3.3 the disposal of the whole or the major part of the company’s assets; 10.3.4 the company to enter into any 10.3.4.1 10.3.4.2 merger with any other company; or material transaction for the taking over of another company; or 10.3.4.3 scheme for another company to take over the company; or 10.3.4.4 material transaction for the acquisition by the company of the whole or a substantial part of the business of any other company; 10.3.4.5 the company to enter into any transaction which is not in the ordinary course of its business; 10.3.5 any change to the authorised or issued capital structure of the company including the issue of any shares, the grant of options or the issue of convertible debentures; 10.3.6 the company to – 10.3.6.1 declare any dividend or to make any other distribution loan account unless terms specifically to shareholders or to repay the interest and/or capital on any shareholders applicable to such loan so provide; 10.3.6.2 incur any material debt; 10.3.7 any material capital or revenue expenditure not provided for in the annual budget of the company, or any other material departure therefrom; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 15 of 43 10.3.8 any material departure by the company from accounting methods generally accepted in South Africa or from the accounting policy adopted by the company in respect of its previous financial year; 10.3.9 the provision of any material guarantees, suretyships, indemnities or like undertakings; 10.3.10 the institution of any proceedings for the winding up of the company or to place the company under judicial management; 10.3.11 the appointment of and any change in the auditors; 10.3.12 the repayment of any shareholders loan, or the charging or payment of any interest thereon, unless the terms specifically applicable to such loan so provide; 10.3.13 the listing of the company’s shares on any stock exchange. 10.3.14 the conclusion of any partnership or joint venture arrangements or franchise arrangement and the conclusion of any agreement which is not contemplated herein or is not in the ordinary course of the company’s business; 10.3.15 the alteration of the rights which attach to any shares of any nature whatsoever; 10.3.16 the creation and issue of any debentures; 10.3.17 the purchase, by the company or any of its subsidiaries, of its own shares; 10.3.18 the alteration of the dividend policy of the company; 10.3.19 the encumbering by the company of any of its assets, except if that encumbering is envisaged in the budget approved for the financial year in question; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 16 of 43 10.3.20 the borrowing of any money by the company (with the exception of any shareholders’ loans) and the issue of any guarantees, indemnities or suretyships by the company; 10.3.21 the approval of the annual financial statements of the company; 10.3.22 the institution of any litigation or the settlement of any claim in excess of R50 000,00 (fifty thousand rands) or any claim involved in technical information or trademarks or seeking any relief or order not sounding in money; 10.3.23 the establishment and implementation of or any change in the company’s financial policy, including, but not limited to, dividend declarations (or major accounting policies which might adversely effect one of the parties); 10.3.24 the company to 10.3.24.1 10.3.24.2 consider or pass any ordinary or special resolution ; make any change in organisational structure of the company; 10.3.24.3 enter into any agreement with any shareholder of the company or any of its subsidiaries or associates and for any subsidiary of or associate of the company to enter into such agreement; 10.3.25 the delegation of the powers vested in the board to committees and the terms of that delegation; 10.3.26 any contract proposed to be entered into with any employee of the company which is based on or which provides for a participation in its profits or dividends; 10.3.27 any agreement or arrangement between the company and any of its shareholders; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 17 of 43 10.3.28 any transaction which is not in the ordinary course of its business. 10.4 In this 10, the expression “material”, unless the context indicates otherwise, means, in relation to any transaction or series of transactions, that the value of that transaction or the series of transactions in question will exceed an amount of 5% (five percent) of the assets or turnover of the company for the preceding financial year, or if such transaction or series of transactions do not exceed such threshold, then it may be considered material if, in the opinion of the board, it is of strategic commercial value or significance to the company. 10.5 The provisions of 10.3 shall, mutatis mutandis, be applicable in respect of every subsidiary of the company. 11 DIVIDEND POLICY 11.1 The dividend policy of the company shall be determined by the directors from time to time. 11.2 Notwithstanding the provisions of 11.1, no dividend shall be declared to the extent that the payment thereof will – 11.2.1 prevent the company from paying its debts as they become due in the ordinary course of business; or 11.2.2 result in the company having an inappropriate level of working capital. PART 4 FUNDING 12 FUNDING 12.1 All capital requirements of the company, as well as the source of financing thereof, shall from time to time be determined by the directors. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 18 of 43 12.2 The funding required by the company for the purposes of developing its business or funding any working capital requirements shall be provided 12.2.1 firstly, out of the profits generated by the company; 12.2.2 secondly, by way of loans or other financial assistance to the company from financial institutions or other third parties; 12.2.3 thirdly, failing generation of profits through sources mentioned in 12.2.1 and 12.2.2, through loans by the shareholders to the company; 12.3 Should the company be financed by loans from the shareholders as envisaged in 12.2.3, such loans shall 12.3.1 be offered to be made simultaneously and in proportion to the shareholders' shareholdings in the company at the time; 12.3.2 be unsecured; 12.3.3 bear interest at such a rate as may from time to time be determined by the company, provided that the rate of interest payable to one shareholder in terms of this 12.3.3 shall at all times be the same as the rate of interest payable to the other shareholders, and provided further that in the event of the company or the shareholders failing to agree on a rate of interest, all loans by the shareholders to the company shall bear interest at the prime rate. 12.4 The loans referred to in 12.3 shall be repayable only if 12.4.1 the directors resolve that it shall be repaid; 12.4.2 the shareholders are repaid simultaneously and proportionately; or 12.4.3 the company is placed in final judicial management or final winding-up at the instance of any outside party. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 19 of 43 12.5 Notwithstanding the provisions of 12.3, loans may be made by any of the shareholders to the company out of proportion of their shareholding in the company, provided that any loan that is so made in excess of any loans which a shareholder is obliged to contribute to the company in terms of the provisions of 12.3, shall 12.5.1 bear interest at the prime rate; 12.5.2 be repayable before any loans referred to in 12.3 are repaid. 12.6 No shareholder shall be under any obligation to give any suretyship, guarantee or indemnity on behalf of, and for the purposes of, a loan to the company or for any other transaction entered into by the company. 12.7 If, after the effective date, a suretyship, guarantee or indemnity is given on behalf of the company, or any of its subsidiaries or associated companies 12.7.1 by all the shareholders, jointly and severally; or 12.7.2 by any one of the shareholders pursuant to a written agreement between all the shareholders to that effect, 12.7.3 then the shareholders shall be liable under such suretyship, guarantee or indemnity as amongst them, in proportion to their shareholding in the company at the time of giving the suretyship, guarantee or indemnity, irrespective of the terms and conditions of that suretyship, guarantee or indemnity. 12.8 All undertakings in terms of this 12 are given by the shareholders for the benefit of each other and for the company, and can be enforced against the defaulting party by either the company or the non-defaulting parties. 12.9 Any amount payable by any shareholder to another shall be payable on demand provided that should any shareholder fail to pay his due proportion of any amount due and payable to another shareholder, such – Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 20 of 43 12.9.1 defaulting shareholder shall be liable on an attorney and own client scale to pay to the claiming shareholder all costs incurred by the claiming shareholder in enforcing his rights in terms of this 12; 12.9.2 amount shall bear interest, at the prime rate, from the due date for payment thereof until the actual date of payment thereof, such interest to be calculated daily and compounded monthly in arrears. PART 5 SHARE TRANSFERS AND EXIT PROVISIONS 13 SHARE TRANSFERS: GENERAL PRINCIPLES 13.1 If any shareholder wishes to dispose of any shareholders interests held by it, it shall only be entitled to do so if the purchaser of such shareholder interest agrees in writing in favour of the other shareholders to be bound by the provisions of this agreement. 13.2 No shares may be sold unless a like portion of the claims, if any, of the shareholder concerned are also sold. 13.3 For the purposes of any sale of shareholders interests in terms of this part 5, any reference to a shareholders interest shall include any rights attaching to or derived from any share forming part thereof. 13.4 Ownership and risk in, and all the benefit to any shareholders interest sold in terms of this part 5 shall pass to the purchaser thereof on delivery. The shares forming part thereof shall be sold cum any dividend declared on or after the date upon which the offer concerned was made or deemed to have been made. 13.5 The consideration payable for any shareholders interest sold in terms of this part 5 shall be payable in cash against delivery, without deduction or set-off. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 21 of 43 13.6 The purchaser of any shareholders interest sold in terms of this part 5 shall pay all and any stamp duty that becomes payable in respect of the sale thereof. 13.7 For purposes of any sale of any shareholders interest sold in terms of this part 5, the seller warrants to the purchaser that – 13.7.1 it is the sole registered holder and beneficial owner of the shareholders interest concerned; 13.7.2 it is entitled and able to give the purchaser free and unencumbered title to the shareholders interest concerned; 13.7.3 no other person shall have any right, including, without limitation, any option or right of first refusal, in respect of the shareholders interest concerned, 13.8 and it shall provide no other warranties of whatsoever nature in relation thereto, it being agreed that the sale thereof will be "voetstoots". 13.9 Every purchaser of shareholders interests in terms of this part 5 shall use his best endeavours to procure the release of the seller pro rata (in the same ratio as the shares so purchased by him in terms of this 13 bear to all the shares held by the seller) from any liability which the seller may have under any guarantees, suretyships and indemnities which may have been given by seller for the company's obligations. Until the release as aforesaid is procured, each of the purchasers indemnifies the seller against any such liability, on the same pro rata basis referred to above. 13.10 No one of the shareholders shall be entitled to encumber any of its shareholders interests, without the prior consent of the other shareholder, which consent shall not be unreasonably withheld. 14 PRE-EMPTIVE RIGHTS 14.1 No one of the shareholders shall dispose of any of its shareholders interests unless that shareholder (referred to in this clause as “the offeror”) has first Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 22 of 43 offered to sell its shareholders interests to the other shareholders (referred to in this clause as “the offerees”). 14.2 The offeror’s offer in terms of 14.1 shall 14.2.1 be in writing and shall be delivered to the offerees; 14.2.2 be irrevocable and shall remain open for acceptance by the offerees for a period of 30 (thirty) calendar days after receipt; 14.2.3 be in respect of all the offeror’s shareholders interests or a specified portion of his shareholders interests; 14.2.4 be open for acceptance by each one of the offerees pro rata to their shareholding in the company; 14.2.5 state the consideration and full terms and conditions upon which the offeror wishes to sell its shareholders interests in question and shall state, where a particular third party has been identified, the name of such third party and, to the extent to which the offeror is aware thereof, the identity of such third party with sufficient particularity to enable the offerees to establish, if applicable, who is/are the ultimate shareholder/s of such third party; 14.2.6 be subject to the conditions that 14.2.6.1 unless stated to the contrary in terms of the offeror's offer, the whole and not a part only of the offeror's offer must be accepted; 14.2.6.2 where there is more than 1 (one) offeree - 14.2.6.2.1 each offeree shall be entitled to accept the entire offer made to him or a portion of that offer; 14.2.6.2.2 if some of the offerees accept the offeror’s offer in full (“the accepting offerees”) but others do not (“the rejecting offerees”), the offeror shall advise Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 23 of 43 the accepting offerees who shall be entitled, pro rata to their shareholding in the company and within a period of 5 (five) business days after receipt of the offeror’s aforesaid notice, to accept the offers made to the rejecting offerees or the portion of the offers made to the rejecting offerees which has not been accepted by them; 14.2.6.2.3 this process shall be continued until no further acceptances are received by the offeror or until the offerees have accepted offers in respect of all the shareholders interests offered by the offeror; 14.2.6.3 if the offeror obtains acceptances for all of the shareholders interests offered by it, the offeror shall, no later than 5 (five) business days after the date of the last such acceptance, deliver to the offerees written cessions of its claims, share certificates in respect of its shares and share transfer forms in respect of those shares, duly completed and executed but blank as to transferee. 14.3 If the offeror offers any of its shareholders interests to the offerees and the offerees do not, in terms of the provisions of 14.2 above, purchase all those shareholders interests, the offeror shall be entitled to sell the shareholders interests so offered but not purchased to the third party identified in terms of 14.2.5, or where no third party has been so identified, to any third party, provided that the shareholders interests in question shall be sold to the third party at a price and on terms and conditions not more favourable to the third party than the price, terms and conditions set out in the offeror’s offer referred to in 14.2 above. 14.4 If the offeror does not sell its shareholders interests to a third party within a period of 15 (fifteen) business days after becoming entitled to do so in terms of the provisions of this clause 14 shall again apply in respect of a disposal of the offeror’s shareholders interests. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 24 of 43 15 DEEMED OFFER 15.1 For purposes of this 15.1, "the offering shareholder" means 15.1.1 any shareholder which becomes subject to any provisional or final order for its liquidation, winding up, judicial management or sequestration, or is made subject to any similar disability at the instance of any third party; 15.1.2 any shareholder which voluntarily, whether by way of a shareholders resolution or otherwise, places itself in liquidation other than for the purposes of a reorganisation; 15.1.3 the estate of any shareholder who is a natural person and who dies; 15.1.4 any shareholder to which the provisions of clause 14 become applicable; 15.1.5 any shareholder or any associate to which that shareholder may have transferred its shareholders interests, which is convicted of any crime involving dishonesty; 15.1.6 any shareholder who commits a breach of any of the material terms of this agreement and to the extent that that breach is capable of being remedied, fails to remedy such breach within a period of 20 (twenty) business days after receipt of written demand from another party. 15.2 As soon as any event contemplated in 15.1 ("the offer event") occurs, the offering shareholder shall notify the remaining shareholders in writing. As soon as any other shareholder becomes aware of the occurrence of an offer event, it shall notify all the shareholders, including the offering shareholder, in writing. 15.3 Within 30 (thirty) business days after the date of notification of any offer event, any one or more of the remaining shareholders of the company ("the offerees ") may, by notice in writing to the offering shareholder, require Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 25 of 43 the offering shareholder to offer his shareholders interests to the offerees at the market value thereof (“offer price”). 15.4 As soon as the offer price has been agreed or determined in terms of 17 and notified in writing to the offerees and the offering shareholder, the offering shareholder shall be deemed to have offered his shareholders interests to the offerees at that value, and the provisions of 13, 14.2 and 14.3 shall mutatis mutandis be applicable to such offer. 15.5 If the offer is not accepted in respect of all of the shareholders interests, the offering shareholder shall be entitled to retain such shareholders interests subject to the continuing operation of the provisions of this agreement. 16 COME ALONG AND TAG ALONG 16.1 If 16.1.1 one or more shareholder/s holding not less than than 45% (forty five per centum) of the entire issued share capital of the company ("the disposing shareholder") wishes to dispose of its/their shareholders interests to a bona fide third party; 16.1.2 the disposing shareholder gives the remaining shareholder/s notice of the fact that the third party who intends purchasing the disposing shareholder's shareholders interests wishes to acquire 100% (one hundred per centum) of the share capital of the company; and 16.1.3 the remaining shareholder/s ("the remaining shareholder") do not exercise its/their pre-emptive rights as set out in 14, 16.2 then the disposing shareholder shall be entitled to give notice, in which it requires the remaining shareholder simultaneously with the disposal by the disposing shareholder of its/their shareholders interests, to dispose of all its/their shareholders interests to such third party on the same terms and conditions pro rata as those on which the disposing shareholder will dispose of its shareholders interests to such third party, provided that the remaining Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 26 of 43 shareholder is released from any suretyships, guarantees or similar undertakings given to third parties for or in connection with the obligations of the company. 16.3 Similarly, if 16.3.1 any disposing shareholders holding not less than 51% (fifty one per centum) of the entire issued share capital of the company wish to dispose of their shareholders interests to a bona fide third party; and 16.3.2 the remaining shareholders do not exercise its/their pre-emptive rights as set out in 14, 16.3.3 then the remaining shareholders shall be entitled, as a condition to such disposal, to require that the disposing shareholders ensure that the third party who purchases the disposing shareholders’ shareholders interests shall also, simultaneously with the purchase of the disposing shareholders’ shareholders interests, purchase the remaining shareholders’ shareholders interests on the same terms and conditions pro rata as those on which the disposing shareholder disposed of its shareholders interests, provided that the remaining shareholder is released from any suretyships, guarantees or similar undertakings given to third parties for or in connection with the obligations of the company, failing which the disposing shareholder shall refrain from selling all or any of its/their shareholders interests. 17 VALUATION 17.1 For purposes of this agreement the "market value” of any shares and/or claims means the market value thereof as agreed between the shareholders or, in the event of the shareholders failing to so agree for whatever reason within 7 (seven) days of a request by any shareholder to so agree, the market value thereof as determined by the auditors of the company (“the valuer”), which shall take into account such considerations as it in its sole discretion may deem fit. The valuer shall act as an expert and not as an Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 27 of 43 arbitrator and its decision in the absence of manifest error will be final and binding on the parties. 17.2 Without limiting the generality of 17.1, in determining the market value, no deduction shall be made for the fact that the shares in question constitute a minority interest in the company nor for the fact that new management may be managing the company nor shall any premium be added for the fact that the shares in question constitute a majority or controlling interest in the company nor, if the purchaser is an existing shareholder of the company, for the fact that by purchasing the shares in question, such shareholder would be in a position to control the company's affairs. 17.3 The valuer 17.3.1 shall be entitled to take advice from any person considered by it to have expert knowledge with reference to the subject matter of the valuation; 17.3.2 shall be obliged to receive written representations from any party, and such other representations and in such form as it may determine; 17.3.3 shall make all such representations available to all parties and allow them reasonable time to furnish further written representations in relation thereto. 17.4 The company shall bear the cost of any valuation, unless the valuer has determined that any other party should bear such costs because such other party, in the opinion of the valuer, acted in a grossly unreasonable manner. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 28 of 43 PART 6 CONFIDENTIALITY AND RESTRAINT 18 CONFIDENTIALITY 18.1 The shareholders acknowledge that any information supplied in connection with this agreement or in connection with the technical, industrial or business affairs of the company or its subsidiaries or associated companies which has or may in any way whatsoever be transferred or come into the possession or knowledge of any other of them (“the receiving party”) may consist of confidential or proprietary data, disclosure of which to or use by third parties might be damaging to the company. 18.2 The receiving party therefore agrees to hold such material and information in the strictest confidence, to prevent any copying thereof by whatever means and not to make use thereof other than for the purposes of this agreement and to release it only to such properly authorised directors, employees or third parties requiring such information for the purposes of this agreement and agree not to release or disclose it to any other party who has not signed an agreement expressly binding himself not to use or disclose it other than for the purposes of this agreement. 18.3 The undertaking and obligations contained in this clause do not apply to information which – 18.3.1 is publicly available at the date of disclosure or thereafter becomes publicly available from sources other than the parties; 18.3.2 is already in possession of the receiving party prior to its receipt by or disclosure to such receiving party; 18.3.3 is required by law or any regulatory authority to be disclosed; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 29 of 43 18.3.4 after being disclosed to the receiving party is disclosed by any other person to the receiving party otherwise than in breach of any obligation of confidentiality. 18.4 The parties shall take such precautions as may be necessary to maintain the secrecy and confidentiality of such material and information in respect of its directors, employees, agents, and/or directors, employees or agents of any assignee, sub-contractor or distributor or any other person to whom any such confidential or proprietary data may have been or will be disclosed. 18.5 Save as may be required by law or any regulatory authority, no announcement or publicity of the existence of this agreement or its content or the transaction embodied in this agreement shall be made or issued by or on behalf of any party without the prior written agreement of all the parties. PART 7 GENERAL PROVISIONS 19 LIMITED REMEDY IN EVENT OF BREACH 19.1 In the event of any of the parties ("the defaulting party") committing a breach of any of the terms of this agreement and failing to remedy such breach within a period of 10 (ten) business days after receipt of a written notice from another party ("the aggrieved party") calling upon the defaulting party so to remedy, then the aggrieved party shall be entitled to claim specific performance of the terms of this agreement and without further notice, claim and recover damages from the defaulting party, but shall not be entitled to cancel this agreement after it has become unconditional. 19.2 It is recorded for the avoidance of any doubt that any claim for damages is independent of and separate to any claim for specific performance. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 30 of 43 20 ARBITRATION 20.1 Should any dispute (other than a dispute in respect of which urgent relief may be obtained from a court of competent jurisdiction) arise or a deadlock exist in relation to any matter which requires consensus between the parties in the widest sense in connection with 20.1.1 the formation or existence of; 20.1.2 the carrying into effect of; 20.1.3 the interpretation or application of the provisions of; 20.1.4 the parties' respective rights and obligations in terms of or arising out of; 20.1.5 the validity, enforceability, rectification, termination or cancellation, whether in whole or in part of; 20.1.6 any documents furnished by the parties pursuant to the provisions of this agreement or which relates in any way to any matter affecting the interests of the parties in terms of this agreement ("dispute") that dispute shall, unless resolved amongst the parties to the dispute, be referred to and be determined by arbitration in terms of this clause, provided that a party to the dispute has demanded the arbitration by written notice to the other parties and provided further that the party desiring such arbitration has first resorted to the dispute resolution procedures in terms of the ensuing provisions. 20.2 In the event of any dispute arising, that dispute shall in the first instance be referred to the directors of the company for resolution. The parties shall procure that their representatives to the board of directors shall engage each other in good faith with a view to resolving the dispute within 7 (seven) days after the date on which it was referred to the directors. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 31 of 43 20.3 In the event of the dispute not being resolved as contemplated in 20.2, the dispute shall forthwith be referred to a mediator for attempted resolution by such mediator, on the following basis – 20.3.1 the mediation shall be conducted by a mediator selected by agreement between the parties and failing such agreement within 7 (seven) days after a written request by any party to the other(s) for such mediation, nominated on the application of any party by the President for the time being of the Law Society of the Cape of Good Hope, or its lawful successor; 20.3.2 no party shall be entitled to be represented at any hearing before or at any meeting or in any discussion with the mediator except by: 20.3.2.1 20.3.2.2 a director of any of the parties; or a bona fide employee of any of the parties; 20.3.3 the mediator shall as he deems fit, follow formal or informal proceedings and receive evidence on submissions orally or in writing, sworn or unsworn at joint meetings, with the parties or separately from any person whom he considers can assist in the formulation of his opinion, provided that 20.3.3.1 each party shall be given reasonable opportunities of presenting evidence and submissions and of responding to evidence and submissions of the other party; and 20.3.3.2 each party shall be given full details of any evidence on submissions received by the mediator from the other party or any other person otherwise than at a meeting where both parties are present; 20.3.4 the mediator shall have the power to propose to the parties compromise settlements or agreements in disposal of the whole or portion of the dispute; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 32 of 43 20.3.5 the mediator shall as soon as is reasonably practicable give to each of the parties his written opinion on the dispute, recording the details of any agreement reached between the parties during the mediation; 20.3.6 the mediator’s opinion shall become binding on the parties only to the extent correctly recorded as being agreed by the parties in the mediator’s written opinion or otherwise as recorded in writing by all parties subsequent to the receipt of the mediator’s opinion; 20.3.7 a dispute on any matter still unresolved after the application of the preceding provisions shall be resolved by arbitration as set out below; 20.3.8 save for reference to any portion of the mediator’s opinion which has become binding in terms of 20.3.6, no reference shall be made by or on behalf of either party in any proceedings subsequent to mediation, to the mediator’s opinion, or to the fact that any particular evidence was given, and to any submission, statement or admission made in the course of the mediation; 20.3.9 each party shall pay its own costs arising from the mediation and the parties shall pay in equal shares the fees and disbursements of the mediation based upon a scale of fees as agreed between the mediator and the parties before the commencement of the mediation, and failing which agreement as determined by a nominee of the President for the time being of the Law Society of the Cape of Good Hope, or its lawful successor, as being fair and reasonable, regard being had to the work done by the mediator. 20.4 In the event that a dispute has not been resolved after application of the preceding provisions, any party to this agreement may demand that a dispute be determined by arbitration by written notice given to the other parties. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 33 of 43 20.5 The provisions of this clause shall not preclude any party from obtaining interim relief on an urgent basis from a court of competent jurisdiction pending the decision of the arbitrator. 20.6 The arbitration shall be held 20.6.1 at Cape Town; 20.6.2 with only the legal and other representatives of the parties to the dispute present thereat; 20.6.3 mutatis mutandis in accordance with the provisions of the High Court Act, No 59 of 1959, the rules made in terms of that Act and the practice of the High Court of South Africa (Cape Provincial Division); 20.6.4 otherwise in terms of the Arbitration Act, No 42 of 1965; 20.7 it being the intention that the arbitration shall be held and completed within 30 (thirty) days after it was demanded. 20.8 The arbitrator shall be, if the matter in dispute is principally 20.8.1 a legal matter, a practising advocate or attorney of Cape Town of at least 000 (number) years' standing; 20.8.2 an accounting matter, a practising chartered accountant of Cape Town of at least 000 (number) years' standing; 20.8.3 any other matter, any independent person; 20.9 agreed upon between the parties to the dispute. 20.10 Should the parties to the dispute fail to agree whether the dispute is principally a legal, accounting or other matter within 7 (seven) days after the arbitration was demanded, the matter shall be deemed to be a legal matter. 20.11 Should the parties to the dispute fail to agree on an arbitrator within 7 (seven) days after the expiry of the period referred to in 20.10, the arbitrator Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 34 of 43 shall be appointed at the request of any party to the dispute by the President for the time being of the Law Society of the Cape of Good Hope, or its lawful successor, according to the provisions of 20.10. 20.12 The decision of the arbitrator shall be final and binding on the parties to the dispute and may be made an order of the court referred to in 20.14 at the instance of any of the parties to the dispute. 20.13 The parties hereby consent to the jurisdiction of the High Court of South Africa (Cape Provinsial Division) in respect of any proceedings referred to in 20.6 or 20.13. 20.14 The parties agree to keep the arbitration and the evidence heard during the arbitration confidential, and not to disclose it to anyone except for purposes of an order to be made in terms of 20.13. 20.15 The provisions of this clause 20.15.1 constitute an irrevocable consent by the parties to any proceedings in terms hereof and no party shall be entitled to withdraw therefrom or claim at any such proceedings that it is not bound by such provisions; 20.15.2 are severable from the rest of this agreement and shall remain in effect despite the termination of or invalidity for any reason of this agreement. 21 PAYMENTS 21.1 All payments to be effected in terms of this agreement shall save as is specifically otherwise provided in this agreement, 21.1.1 be made by way of bank guaranteed cheque (the drawer bank to be to the satisfaction of the payee) or by way of electronic funds transfer; 21.1.2 be made free of commission or exchange; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 35 of 43 21.1.3 be made without any set-off or deduction having been applied thereto; and 21.1.4 be made at such address as the payee may in writing direct from time to time. 21.2 All amounts payable in terms of this agreement and not paid on due date shall attract interest at the prime rate, calculated from the due date to the date of actual payment thereof. 22 GOOD FAITH 22.1 The parties shall co-operate and consult with each other regarding the activities of the company and the promotion of the business of the company, it being the intention that 22.1.1 the relationship between them shall be governed by the principles of the utmost good faith as such principles are understood in the context of a partnership; and 22.1.2 the affairs of the company shall be administered and promoted with the highest degree of integrity between the shareholders. 22.2 The parties confirm that it is not their intention to establish a partnership in terms of this agreement. 22.3 All dealings between the company and the shareholders of the company and companies or other entities controlling or controlled by them, whether directly or indirectly, shall be conducted on a bona fide arms length basis. Any facilities, whether for finance or goods or services, whether from the shareholders or from third parties, shall be procured on an arm's length basis on normal commercial terms and prices. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 36 of 43 23 CESSION 24 Save as provided to the contrary in this agreement, no party to this agreement shall cede, assign, transfer, encumber or delegate any of its rights in terms of this agreement without the consent of the other parties. 25 PERFORMANCE 26 The parties shall do all acts and sign all such documents as may be required from time to time in order to implement and carry out the terms and conditions of this agreement. 27 NOTICES AND DOMICILIUM 27.1 The parties choose as their domicilia citandi et executandi their respective addresses set out in this clause for all purposes arising out of or in connection with this agreement at which addresses all processes and notices arising out of or in connection with this agreement, its breach or termination may validly be served upon or delivered to the parties. 27.2 For purposes of this agreement the parties' respective addresses shall be 27.2.1 [first shareholder] at [•]; 27.2.2 27.2.3 facsimile: [•]; for the attention of: [•]; 27.2.4 [second shareholder] at 27.2.5 facsimile: [•], 27.2.6 for the attention of: [ 27.2.7 27.2.8 27.2.9 the Company at [•]; facsimile: [•], for the attention of: [•]; Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 37 of 43 27.3 or at such other address in the Republic of South Africa of which the party concerned may notify the others in writing provided that no street address mentioned in this sub-clause shall be changed to a post office box or poste restante. 27.4 Any notice given in terms of this agreement shall be in writing and shall 27.4.1 if delivered by hand be deemed to have been duly received by the addressee on the date of delivery; 27.4.2 if posted by prepaid registered post be deemed to have been received by the addressee on the 8th (eighth) day following the date of such posting; 27.4.3 if transmitted by facsimile be deemed to have been received by the addressee on the day following the date of dispatch, 27.5 unless the contrary is proved. 27.6 Notwithstanding anything to the contrary contained or implied in this agreement, a written notice or communication actually received by one of the parties from another including by way of facsimile transmission shall be adequate written notice or communication to such party. 28 NEW LAWS AND INABILITY TO PERFORM 28.1 If any law comes into operation subsequent to the signature of this agreement which law affects any aspect or matter or issue contained in this agreement, the parties undertake to enter into negotiations in good faith regarding a variation of this agreement in order to ensure that neither this agreement nor its implementation constitutes a contravention of such law. 28.2 If either party is prevented from performing any of its obligations in terms of this agreement as a result of any existing or new law or as a result of any event beyond its reasonable control whether or not foreseeable, including general power failures, breakdown of telecommunication networks or computers, political intervention, imposition of sanctions, riot or insurrection, Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 38 of 43 it shall not be liable for any failure to perform its obligations under this agreement while such event persists and shall have the right (unless such event has or is likely to persist for a period not exceeding 30 (thirty) days) to terminate this agreement at any time after the intervention of or becoming aware of such event. 28.3 If this agreement is terminated by either party in accordance with the provisions of this clause neither party shall have any claim or obligation in respect of any loss suffered or damages incurred as a result of such cancellation. 29 SEVERABILITY Each and every provision of this agreement (excluding only those provisions which are essential at law for a valid and binding agreement to be constituted) shall be deemed to be separate and severable from the remaining provisions of this agreement. If any of the provisions of this agreement (excluding only those provisions which are essential at law for a valid and binding agreement to be constituted) is found by any court of competent jurisdiction to be invalid and/or unenforceable then, notwithstanding such invalidity and/or unenforceability, the remaining provisions of this agreement shall be and remain of full force and effect. 30 OPERATION 30.1 The expiration, cancellation or other termination of this agreement shall not affect those provisions of this agreement which expressly provide that they will operate after such expiration, cancellation or other termination or which of necessity must continue to endure after such expiration, cancellation or other termination, notwithstanding that the relevant clause may not expressly provide for such continuation. 30.2 If the operation of this agreement is suspensive or conditional upon the happening of any event and if any obligation or restriction imposed on the parties or any of them is clearly intended to be implemented and given effect to notwithstanding the fact that this agreement in its entirety may at that time Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 39 of 43 not yet be unconditional, then the relevant obligation or restriction shall nevertheless apply and be given effect to, and the relevant provisions shall create binding obligations on the parties. 31 INDEPENDENT ADVICE Each of the parties to this agreement hereby acknowledges and agrees that – 31.1 it has been free to secure independent legal and other professional advice (including financial and taxation advice) as to the nature and effect of all of the provisions of this agreement and that it has either taken such independent advice or has dispensed with the necessity of doing so; and 31.2 all of the provisions of this agreement and the restrictions herein contained are fair and reasonable in all the circumstances and are in accordance with the party’s intentions. 32 WHOLE AGREEMENT This agreement constitutes the whole agreement between the parties as to the subject matter hereof and no agreements, representations or warranties between the parties regarding the subject matter hereof other than those set out herein are binding on the parties. 33 VARIATION No addition to or variation, consensual cancellation or novation of this agreement and no waiver of any right arising from this agreement or its breach or termination shall be of any force or effect unless reduced to writing and signed by all the parties or their duly authorised representatives. 34 RELAXATION No latitude, extension of time or other indulgence which may be given or allowed by any party to the other parties in respect of the performance of any obligation hereunder, and no delay or forbearance in the enforcement of any right of any Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 40 of 43 party arising from this agreement, and no single or partial exercise of any right by any party under this agreement, shall in any circumstances be construed to be an implied consent or election by such party or operate as a waiver or a novation of or otherwise affect any of the party's rights in terms of or arising from this agreement or estop or preclude any such party from enforcing at any time and without notice, strict and punctual compliance with each and every provision or term hereof. 35 COSTS The costs of both parties’ attorneys shall be borne and paid by the company. However, pending the company’s obtaining of sufficient funds the cost thereof shall be advanced in equal shares by [first shareholder] and [second shareholder] and these amounts so advanced shall represent a respective claim against the company in view of the fact that the company is obtaining the benefit of the work of [first shareholder] and [second shareholder]. 36 SIGNATURE 36.1 This agreement is signed by the parties on the dates and at the places indicated opposite their respective names. 36.2 This agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument. 36.3 The persons signing this agreement in a representative capacity warrant their authority to do so. Initials shareholders AGREEMENT blank 071201 07 April 2009 Page 41 of 43 [first shareholder] Date: (Duly authorised) Place: [first shareholder] Date: (Duly authorised) Place: The Company Date: (Duly authorised) Place: Initials