EXHIBIT 4.70
DATED
(1) DRD (ISLE OF MAN) LIMITED
(2) NET-GOLD SERVICES LIMITED
(3) G.M. NETWORK LIMITED
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SUBSCRIPTION AND OPTION AGREEMENT
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Maitland & Co
0xx Xxxxx, 00-00 Xxxxx Xxxxxx
London W l S 4NX
Tel: (x00 00) 0000 0000
xxx.xxxxxxxxxxxxx.xxx
26 January 2004
SUBSCRIPTION AND OPTION AGREEMENT
THIS AGREEMENT is made on 26 January 2004
Between
(1) DRD (ISLE OF MAN) LIMITED, a company incorporated as a limited company in
accordance with the laws of the Isle of Man having registration number 94445 C
and its registered address at Xxxxxxxxx Xxxxx, 00/00 Xxxxx Xxxxxx, Xxxxxxx, Xxxx
xx Xxx (the "INVESTOR");
(2) NET-GOLD SERVICES LIMITED, a company incorporated as a limited company in
accordance with the laws of the Bahamas having registration number 96407 B and
its registered address at c/o Provident Trust Limited, PO Box 9204, Charlotte
House, Charlotte Street, Nassau, Bahamas (the "COMPANY"); and
(3) G.M. NETWORK LIMITED, a company incorporated as a limited company in
accordance with the laws of the Isle of Man having registration number 092598 C
and its registered office at Xxxxxx Xxxxx, Palace Road, Xxxxxxx, Isle of Man
("GMN").
RECITALS
A. The Company is a wholly owned subsidiary of GMN.
B. The Investor wishes to subscribe for approximately 50.25% of the
Company's shares in accordance with the terms of this agreement. On
completion, the Investor will pay 10% of the aggregate subscription
price in return for a proportionate number of fully paid shares in the
Company, and the remainder of the Investor's proposed shareholding will
be issued unpaid. The unpaid shares will either be paid up or cancelled
in accordance with the terms of this agreement.
C. The Investor and GMN will have respective put and call options to
exchange the Investor's shares in the Company for an agreed number of
shares in GMN.
D. If the Investor does not pay the subscription price in relation to its
unpaid shares in the Company, those shares will be cancelled; the
options referred to in Recital C will lapse with respect to the unpaid
shares; and the Investor and GMN will have respective put and call
options to sell and acquire respectively the Investor's fully paid
shares in the Company in exchange for an agreed number of shares in
GMN.
It is agreed as follows:
1. Interpretation
1.1 In this agreement and the Schedules, unless the contrary
intention appears:
1.1.1 "COMPLETION" means the completion of the transactions
and matters specified in clause 4;
1.1.2 "DEED OF ADHERENCE" means the deed of adherence
annexed hereto as Schedule 4 pursuant to which the
Investor covenants to adhere to the GMN Shareholders
Agreement conditionally upon acquiring a shareholding
in GMN;
1.1.3 "ENCUMBRANCE" means a mortgage, charge, pledge, lien,
option, restriction, right of first refusal, right of
pre-emption, third party right or interest, or other
encumbrance or security of any kind;
1.1.4 "INVESTOR DIRECTOR" means a director to be nominated
by the Investor for appointment to the board of GMN
pursuant to the provisions of clause 6;
1.1.5 "GMN SHAREHOLDERS AGREEMENT" means a shareholders
agreement dated June 2003 between GMN and its
shareholders;
1.1.6 "PAID SHARES" means 10.1 (ten point one) of the
Subscription Shares which will be issued and allotted
to the Investor on Completion as fully paid up
Shares;
1.1.7 "SHARES" means ordinary shares of US$0.01 each in the
Company;
1.1.8 "SHAREHOLDER" means a holder of shares in the
Company;
1.1.9 "SUBSCRIPTION SHARES" means 101 ordinary shares of
US$0.01 each in the Company for which the Investor is
subscribing under clause 2 and which consist of the
Paid Shares and the Unpaid Shares;
1.1.10 "UNPAID SHARES" means 90.9 (ninety point nine) of the
Subscription Shares which will be issued and allotted
to the Investor on Completion as unpaid Shares;
1.1.11 "WARRANTIES" means the warranties referred to in
Schedule 2.
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1.2 In this agreement and the Schedules unless the context
otherwise requires:
1.2.1 Words denoting any one gender include all other
genders and words denoting the singular shall include
the plural and vice versa.
1.2.2 A reference to:
(a) a "subsidiary" or "holding company" shall be
construed in accordance with section 736 of
the English Companies Xxx 0000, as amended
and in force at the date of this agreement;
(b) a "clause" or a "Schedule" is a reference to
a clause of, or a Schedule to, this
agreement;
(c) a person includes a reference to a body
corporate, an unincorporated association or
a partnership and that person's legal and
personal representatives and successors; and
(d) any statutory provision includes a reference
to the statutory provision as modified or
re-enacted or both from time to time
(whether before or after the date of this
agreement).
1.3 When any payment falls due or any other obligation falls to be
performed on a Saturday, Sunday or a day on which banks are
not open for the transaction of normal business in the Isle of
Man, then such payment shall be made, or such obligation
performed, on the next succeeding day on which banks are open
for the transaction of normal business in the Isle of Man.
This clause will not apply in respect of the parties'
obligations in clause 4.
1.4 Headings are for ease of reference only and shall not affect
the interpretation of this agreement.
2. SUBSCRIPTION
The Investor will subscribe for the Subscription Shares for an
aggregate subscription price of US$ 2,000,000 (two million United
States dollars) in accordance with the terms of this agreement,
equating to a subscription price of US$19,801.98 per Subscription
Share. For the avoidance of doubt the Subscription Shares will be
subscribed for by, and issued and allotted to, the Investor, and not by
or to, any nominee of the Investor.
3. AMENDMENT OF THE COMPANY'S ARTICLES OF ASSOCIATION
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GMN will procure that the Company's articles of association are amended
prior to Completion in the manner set out in Schedule 3.
4. COMPLETION
4.1 Completion will take place at 16h00, Isle of Man time, on the
day following execution of this agreement at the offices of
Maitland & Co, Xxxxxx Xxxxx, Palace Road, Xxxxxxx, Isle of Man
or at such other place as the parties agree, when:
4.1.1 the Investor will
(a) pay to the Company the sum of US$ 200,000
(two hundred thousand United States dollars)
being the proportion of the subscription
price due for the Paid Shares; and
(b) deliver to GMN a counterpart of the Deed of
Adherence duly executed by the Investor as a
deed; and
4.1.2 GMN will procure that the Company and the Company
undertakes to:
(a) duly issue and allot the Subscription Shares
to the Investor on the basis that the Paid
Shares will be issued and allotted to the
Investor as fully paid up Shares and the
Unpaid Shares will be issued and allotted to
the Investor as unpaid Shares; and
(b) deliver to the Investor (or as it directs) a
share certificate or certificates relating
to the same;
(c) appoint the "B" Directors to the Company's
board of directors as referred to in clause
6.1
(d) ensure that one of the three directors
presently appointed to the Company's board
of directors resigns or is removed from the
Company's board of directors.
4.2 GMN will procure the appointment of the Investor Director to
the GMN board of directors as referred to in clause 7.1.
4.3 The Investor will pay to the Company on 29 April 2004 or such
earlier day as the Investor and the Company shall agree, the
sum of US$ 1,800,000, being the proportion of the subscription
price due for the Unpaid Shares ("SUBSCRIPTION BALANCE").
Following payment of the Subscription Balance in accordance
with this clause the Unpaid Shares will become fully paid. If
the Investor does not pay the Subscription
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Balance in accordance with this clause it acknowledges that
the Investor will forfeit the Unpaid Shares and the Company
will have the right to cancel the Unpaid Shares forthwith.
4.4 All payments made by the Investor to the Company will be made
either by telegraphic or electronic transfer of funds for same
day value to such bank account as the Company has previously
advised the Investor. The Investor acknowledges that time is
of the essence in respect of any payment due by it under this
clause 4.
5. INTER COMPANY LOANS
Following Completion GMN and the Investor will procure that the Company
advances the inter company loans in the manner referred to in Schedule
5.
6. APPOINTMENT OF DIRECTORS OF THE COMPANY
6.1 The parties agree that GMN and the Investor shall each have
the right to nominate and appoint, and from time to time
replace, no more than two directors to the board of directors
of the Company. Directors appointed by GMN shall be known as
"A" Directors", and directors appointed by the Investor as "B"
Directors. The first "B" Director(s) will be Xxx Xxxxxx and
Xxxx Xxxxxxxx. Each party undertakes to take such steps as may
be necessary to ensure that the nominees of the other party
are promptly appointed to the board of the Company, provided
that the persons nominated by one party are approved by the
other party, which approval shall not be unreasonably withheld
or delayed.
6.2 The quorum for meetings of the board of directors of the
Company shall be two directors, one of whom shall be an "A"
Director and one a "B" Director: provided that if a duly
convened board meeting is inquorate, then a second board
meeting shall be duly convened at which any two directors
shall constitute a quorum.
6.3 Directors may attend meetings of the board either in person,
or by video or by conference telephone.
6.4 The chairman (if one is appointed) will not have a second or
casting vote. The "A" and the "B" Directors will be entitled
to appoint alternate directors subject to their prior approval
by the other Shareholder (which approval shall not be
unreasonably withheld or delayed).
6.5 GMN and the Investor agree that any rights which the Company
may have against the Investor pursuant to or in respect of the
matters referred to in clauses 4.3, 10 or 11 including without
limitation in respect of the Company's right to call for
payment of the Subscription
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Balance, and the Company's right to require forfeiture of the
Unpaid Shares, will be dealt with by the "A" Directors, and
that the "B" Directors (and/or any alternates appointed by the
same) will be precluded from voting in relation thereto.
6.6 The Investor's right to nominate "B" Directors will cease on
the earlier of:
6.6.1 its failure to pay the Subscription Balance in
accordance with clause 4; or
6.6.2 completion of the exercise of the relevant Option
pursuant to clause 8;
and the Investor will forthwith remove any "B" Directors,
including their alternates, who have been appointed and if it
fails to do so GMN will be empowered to remove the same.
6.7 Each of GMN and the Investor will fully indemnify and keep
fully indemnified the Company from and against any claim for
unfair or wrongful dismissal or redundancy or other
compensation, fee or payment arising out of the service of any
director appointed pursuant to clause 6.1 as a director of the
Company or the removal or loss of office of the same
7. APPOINTMENT OF DIRECTOR TO GMN
7.1 GMN will procure that the Investor will be entitled to
nominate one director to the board of directors of GMN ("GMN
BOARD") who shall be regarded as the "INVESTOR DIRECTOR", and
the Investor shall be entitled at any time to effect the
removal or replacement of such director, provided the proposed
Investor Director or his/her replacement is approved by GMN,
which approval shall not be unreasonably withheld or delayed.
The Investor Director will not be entitled to a fee or other
payment in respect of his appointment. The first Investor
Director will be Xxx Xxxxxx, and llja Xxxxxxxx will act as his
alternate. Any appointment or removal of an Investor Director
will be effected by giving written notice thereof to GMN.
7.2 If the Investor fails to pay the Subscription Balance in
accordance with clause 4 its right to nominate an Investor
Director will cease and it will forthwith remove any Investor
Director, including any alternate, who has been appointed and
if it fails to do so GMN will be empowered to remove the same.
7.3 Following the exercise and completion of the Put Option or the
Call Option pursuant to clause 8 below, the Investor's right
to nominate an Investor Director pursuant to clause 7.1 will
cease, however GMN will
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procure (with effect from the date of such exercise) that the
GMN Board grants the Investor the right to appoint a director
to the GMN Board, pursuant to the provisions of clause 3.1.6
of the GMN Shareholders Agreement. Any Investor Director
serving as a director of GMN at the date of such exercise
shall (if the Investor so desires) remain in place, however
such director shall from that time be regarded as an appointee
pursuant to the GMN Shareholders Agreement rather than
pursuant to clause 7.1 of this agreement.
7.4 The Investor will fully indemnify and keep fully indemnified
GMN from and against any claim for unfair or wrongful
dismissal or redundancy or other compensation, fee or payment
arising out of the service of any director appointed pursuant
to clauses 7.1 or 7.3 as a director of GMN or the removal or
loss of office of the same.
8. PUT AND CALL OPTIONS
8.1 The Put and Call Options referred to in this clause will be
conditional upon the Investor paying the Subscription Balance
in accordance with clause 4. If the Subscription Balance is
not paid in accordance with such clause the Put and Call
Options referred to in this clause will lapse and be of no
further force or effect.
8.2 GMN hereby grants the Investor the right to sell to GMN and to
require GMN to purchase the Subscription Shares in accordance
with the provisions of this clause ("PUT OPTION").
8.3 The Investor grants GMN the right to purchase from the
Investor and to require the Investor to sell the Subscription
Shares in accordance with the provisions of this clause ("CALL
OPTION").
8.4 Provided that the Call Option Notice has not been previously
served pursuant to clause 8.5, the Investor may exercise the
Put Option on one occasion only in relation to all the
Subscription Shares at any time before 31 December 2007 by not
less than 7 days' notice in writing to GMN ("PUT OPTION
NOTICE"). If a Put Option Notice is served in accordance with
this clause and the Subscription Shares have been sold and
transferred to GMN pursuant to such notice, the Call Option
will lapse and be of no further force or effect.
8.5 Provided that a Put Option Notice has not been previously
served pursuant to clause 8.4, the Call Option may be
exercised by GMN at any time after the date on which South
African exchange control regulations are abolished (as defined
below), on not less than 7 days notice in writing to the
Investor ("CALL OPTION NOTICE"), or on 31 December 2007
whichever is the earlier. Unless previously exercised, GMN
will be deemed to have exercised the Call Option on 31
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December 2007 unless GMN shall have given 10 days prior
written notice that the Call Option should not be exercised on
that date. For the purpose of this clause 8.5 South African
exchange controls shall be deemed to have been abolished on
the earlier of the effective date on which:
8.5.1 South African exchange controls are abolished in
their entirety; or
8.5.2 South African exchange controls are modified to the
extent that there is no material restriction,
prohibition, hindrance or similar encumbrance, on the
Investor holding a minority shareholding in GMN.
8.6 The Investor will use its best endeavours to obtain as soon as
practicable any approvals from the South African Reserve Bank
or from any other relevant body ("APPROVALS") which may be
necessary to enable the transactions contemplated by the
exercise of the Call Option to take place. The Investor will:
8.6.1 keep GMN fully and promptly informed on the progress
of its application for the Approvals
("Applications"), and promptly notify GMN on
obtaining the Approvals; and
8.6.2 promptly supply GMN with copies of such documents in
relation to the Applications as GMN shall from time
to time request; and
8.6.3 promptly take all action as GMN shall from time to
time reasonably require in relation to the
Applications and to obtain the Approvals.
If the Approvals have not been obtained by the date for
completion of the exercise of the Call Option referred to in
clause 8.8 (or such later date as GMN may have notified the
Investor that such completion should take place) the Investor
shall transfer its Shares pursuant to the provisions of clause
10.3 to 10.7.
8.7 The consideration for the Subscription Shares under this
clause shall be the issue and allotment to the Investor of
523.2611341 ordinary shares of US$1.00 each in GMN, currently
representing approximately 14.3% of the issued share capital
of GMN on a fully diluted basis ("CONSIDERATION SHARES").
8.8 Completion of the exercise of the relevant Option shall take
place 7 days after the date of the relevant Option Notice, or
31 December 2007 as applicable, at the offices of Maitland &
Co, Palace Road, Douglas, Isle of Man or at such other place
as the parties agree, when:
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8.8.1 the Investor will deliver:
(a) to GMN an appropriate transfer in respect of
the Subscription Shares duly executed in
favour of GMN together with the relevant
share certificate; and
(b) to the Company (on the basis that such
directors have not already resigned) the
resignations of the "B" Directors, including
their alternates, duly signed as deeds and
confirming that they have no claims against
the Company, in such form as the Company
shall reasonably require; and
8.8.2 GMN will procure that the Consideration Shares are
duly issued and allotted to the Investor and will
deliver to the Investor the relevant share
certificate relating thereto.
8.9 The Subscription Shares shall be sold by the Investor in
accordance with this clause with full title guarantee, free
from any Encumbrance and together with all rights and benefits
attached thereto on or after the date of exercise of the
relevant Option, and the Consideration Shares shall be issued
and allotted free from any Encumbrance.
9. GMVN'S CALL OPTION AND THE INVESTORS PUT OPTION
9.1 The Call Option and Put Option referred to in this clause will
be conditional upon the Investor failing to pay the
Subscription Balance in accordance with clause 4. If the
Subscription Balance is paid in accordance with such clause
the Call Option and the Put Option referred to in this clause
will lapse and be of no further force nor effect.
9.2 GMN hereby grants the Investor the right to sell to GMN and to
require GMN to purchase the Paid Shares in accordance with the
provisions of this clause ("INVESTOR PUT OPTION").
9.3 The Investor hereby grants GMN the right to purchase and to
require the Investor to sell the Paid Shares in accordance
with the provisions of this clause ("GMN CALL OPTION").
9.4 Provided that the GMN Call Option Notice has not previously
been served pursuant to clause 9.5, the Investor may exercise
the Investor Put Option on one occasion only in relation to
all the Paid Shares at any time after 29 March 2004 by not
less than 7 days' notice in writing to GMN ("INVESTOR PUT
OPTION NOTICE").
9.5 GMN may exercise the GMN Call Option on one occasion only in
relation to all the Paid Shares at any time after 29 2004 by
not less
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than 7 days' notice in writing to the Investor ("GMN CALL
OPTION NOTICE"). The Investor will use its best endeavours to
obtain as soon as practicable any approvals from the South
African Reserve Bank or from any other relevant body
("Approvals") which may be necessary to enable the
transactions contemplated by the exercise of the GMN Call
Option to take place. The Investor will:
9.5.1 keep GMN fully and promptly informed on the progress
of its application for the Approvals
("Applications"), and promptly notify GMN on
obtaining the Approvals; and
9.5.2 promptly supply GMN with copies of such documents in
relation to the Applications as GMN shall from time
to time request; and
9.5.3 promptly take all action as GMN shall from time to
time reasonably require in relation to the
Applications and to obtain the Approvals.
If the Approvals have not been obtained by the date for
completion of the exercise of the GMN Call Option referred to
in clause 9.7 (or such later date as GMN shall have notified
the Investor that such completion should take place) the
Investor shall transfer its Paid Shares pursuant to the
provisions of clause 10.3 to 10.7.
9.6 The consideration for the Paid Shares under this clause shall
be the issue and allotment to the Investor of 52.3261134
ordinary shares of US$1.00 each in GMN, currently representing
approximately 1.43% of the issued share capital of GMN on a
fully diluted basis.
9.7 Completion of the exercise of the Investor Put Option or the
GMN Call Option shall take place 14 days after the date of the
relevant Option Notice (or in the case of a GMN Call Option
Notice such later date as GMN may have notified, or in the
event that the Investor has to apply for Approvals, 30 days
after the exercise of the relevant option notice) at the
offices of Maitland & Co, Xxxxxx Xxxxx, Palace Road, Douglas,
Isle of Man or at such other place as the parties agree, when:
9.7.1 the Investor will deliver:
(a) to GMN an appropriate transfer in respect of
the Paid Shares duly executed in favour of
GMN together with the relevant share
certificate; and
(b) to the Company (on the basis that such
directors have not already resigned) the
resignations of the "B" Directors, including
their alternates, duly signed as
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deeds and confirming that they have no
claims against the Company, in such form as
the Company shall reasonably require; and
9.7.2 GMN will procure that the shares referred to in
clause 9.6 are duly issued and allotted to the
Investor and will deliver to the Investor the
relevant share certificate relating thereto.
9.8 The Paid Shares shall be sold by the Investor in accordance
with this clause with full title guarantee, free from any
Encumbrance and together with all rights and benefits attached
thereto on or after the date of exercise of the Investor Put
Option or GMN Call Option, and the shares referred to in
clause 9.6 shall be issued and allotted free from any
Encumbrance.
10. RESTRICTIONS ON TRANSFER
10.1 Other than pursuant to the Options referred to in clauses 8 or
9, or as provided in this clause, or as provided in clause 11,
or with GMN's prior written consent, the Investor may not
transfer, sell, assign, dispose of, renounce any right to,
subscribe for, grant any option over, create any Encumbrance
over, or otherwise deal in any manner with the legal or
equitable interest (collectively "TRANSFER") in any of its
shares in the Company.
10.2 Other than with the Investor's prior written consent, GMN may
not Transfer the legal or equitable interest in any of its
shares in the Company,
10.3 If the Approvals have not been obtained by the date referred
to in clause 8.8 or 95, as appropriate, the Investor may sell
all (but not part) of its shares in the Company, provided that
it first offers all (but not part) of such shares ("the
Offered Shares") to GMN ("Offer") at the Prescribed Price (as
defined in clause 11.1.2).
10.4 Unless the Company is notified within 7 days after the date of
the Offer that the Shareholders have reached agreement on the
Prescribed Price, the Company will procure forthwith that the
Prescribed Price is determined by the Company's auditors
("Auditors") in accordance with clause 11.6.
10.5 If GMN does not accept the Offer in full within 7 days of the
date on which the Prescribed Price is determined, the Investor
will notify the Company's board of directors which will
forthwith offer all (but not part) of the Offered Shares to
the then shareholders of GMN at the same price ("GMN
Offerees"), inviting each of them to state in writing within
30 days from the date of such offer whether it is willing to
purchase any, and if so, what maximum number of the Offered
Shares.
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At the expiration of such period the directors will within a
period of 14 days allocate the Offered Shares to or amongst
the GMN Offerees who shall have expressed its or their
willingness to purchase as aforesaid and (if more than one) so
far as may be possible pro rata to the number of shares held
by them respectively in GMN. No GMN Offeree will be obliged to
take more than the maximum number of Offered Shares notified
to it.
10.6 Upon acceptance by GMN of the Offer in full, or upon any
allocation being made to the GMN Offerees of all of the
Offered Shares, as the case may be, pursuant to clause 10.5,
the Investor will be bound on payment of the purchase price to
transfer the Offered Shares to the purchaser or purchasers
concerned, and if it makes default in doing so, the directors
may receive and give good discharge for the purchase money on
behalf of the Investor and may authorise some person to
execute a transfer of the Offered Shares in favour of the
relevant purchaser or purchasers and issue the relevant share
certificates in respect of the Offered Shares.
10.7 If all of the Offered Shares are not accepted by GMN, or
allocated to the GMN Offerees, as referred to above, the
Investor may for a period of 6 months following the expiry of
the period referred to above for acceptance of the Offered
Shares by the GMN Offerees, sell its shares in the Company to
a third party subject to such third party first becoming bound
by the provisions of this agreement or by provisions
substantially similar to the terms of this agreement as the
Investor and GMN may agree, including, without limitation, the
Investor Put Option.
11. COMPULSORY SALE OF SHARES
11.1 For the purpose of this clause 11 the following expressions
shall have the following meanings:
11.1.1 "EVENT" means the occurrence of any of the following
events:
(a) the making by the Investor of an
arrangement, compromise or moratorium for
the benefit of its creditors generally or
the failure to pay its debts generally as
they become due; or
(b) any distress, execution, sequestration or
other such process being levied or enforced
upon or sued out against any material
property of the Investor which is not
discharged within fourteen days or, if
later, the date of service of the written
notice by GMN pursuant to clause 11.2;
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(c) an encumbrancer taking possession of, or an
administrator, an administrative receiver, a
receiver, a trustee, or a liquidator being
appointed over the whole or any part of the
undertaking, property or assets of the
Investor; or an order is made or a
resolution is passed for the winding-up of
the Investor other than a solvent
liquidation for the purposes of a
reorganisation;
(d) the Investor at any time purporting to
contravene the provisions of clause 10;
(e) the Investor undergoing a change in control
(as defined below). For the purpose of this
sub clause, "CONTROL" has the meaning
ascribed thereto in section 416 of the
English Income and Corporation Taxes Act
1988 (as amended).
11.1.2 "PRESCRIBED PRICE" means:
(a) at any time before the Subscription Balance
has been paid by the Investor, the lower of:
(i) US$ 200,000; and
(ii) the market value of the Paid Shares, or
the shares which are the subject of a notice pursuant to clause 11.2
(as the case may be); or
(b) at any time after the Subscription Balance
has been paid by the Investor, the market
value of the Subscription Shares, or the
shares which are the subject of a notice
pursuant to 11.2 (as the case may be).
11.2 Notwithstanding any other provision of this agreement upon the
occurrence of an Event, GMN shall be entitled to require the
Investor to sell to it at the Prescribed Price all (but not
part) of the shares in the Company held or beneficially owned
by the Investor. Such right shall be exercised by GMN
delivering written notice to the Investor and to the Company
to that effect at any time within 120 days of the date of the
occurrence of such Event or the day on which GMN becomes aware
of the occurrence giving rise to the Event, whichever is the
later. If no such notice is given timeously, then the right
granted to GMN pursuant hereto shall lapse in respect of that
Event.
11.3 If a notice referred to in clause 11.2 is given, the Investor
shall deliver to GMN within ten days after the Prescribed
Price is determined, a duly executed transfer form in respect
of all its shares in the Company against full payment to the
Investor of the Prescribed Price.
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11.4 The Shareholders agree to notify each other immediately of any
occurrence which would constitute an Event.
11.5 Unless the Company is notified within 10 days after delivery
of a notice under clause 11.2 that the Shareholders have
reached agreement on the Prescribed Price, the Company will
procure forthwith that the same is determined in accordance
with clause 11.6.
11.6 For the purpose of clauses 10.4 and 11.5, the Prescribed Price
will be determined by the Auditors. In making their
determination the Auditors will:
11.6.1 determine the market value of the Paid Shares or
Subscription Shares or the shares which are the
subject of a notice pursuant to clause 11.2 (as the
case may be) on the basis of an arms length sale
between a willing buyer and a willing seller;
11.6.2 take into account, inter alia, the options granted in
clauses 8 and 9 and the value attributable to the GMN
shares that would be issued as consideration on
exercise of such options;
11.6.3 act as experts and not as arbitrators;
11.6.4 receive submissions orally or in writing which any
Shareholder may submit within 7 days of their
appointment in terms hereof; and
11.6.5 make their determination as soon as possible after
their appointment and in any case within 14 days
thereof.
In the absence of manifest error the Auditors' decision will
be final and binding on the parties. The Auditors' fees will
be paid as the Auditors direct or in the absence of any
direction in equal proportions by the Shareholders.
12. TRANSFER OF GMN'S BUSINESS OR ASSETS
12.1 GMN undertakes that in the event that it intends to transfer,
sell, assign or dispose of a material part of its business,
investments or assets (collectively "A DISPOSAL"), it will
give the investor not less than 30 days prior written notice
of such intention (the "NOTICE PERIOD").
12.2 At any time during the Notice Period, the Investor may
exercise the Put Option or the Investor Put Option pursuant to
the provisions of clause 8 or 9 by delivering an Option Notice
or an Investor Option Notice to GMN of its intention to
exercise the relevant option upon completion of the Disposal.
14
12.3 Completion of the exercise of the relevant option pursuant to
this clause 12 shall take place upon completion of the
Disposal and fulfilment of all suspensive conditions related
to the Disposal.
13. DIVIDENDS
It is recorded and agreed that the Company shall not pay or consider
paying any dividend or make or consider making any distribution of
profits to any shareholder before 1 February 2008.
14. WARRANTIES
14.1 GMN hereby warrants to the Investor that each of the
Warranties is true and accurate at the date of this agreement.
14.2 The maximum aggregate liability of GMN in relation to the
Warranties shall under no circumstances exceed the
subscription price for the Subscription Shares or part thereof
that the Company has actually received from the Investor in
cleared funds.
15. CONFIDENTIALITY
15.1 Any communication between the Investor on the one hand, and
the Company and GMN on the other (each to be regarded for the
purpose of this clause 15 and clause 17 as one party), and
between any of their respective subsidiaries, or their
representatives which is marked confidential or which is of a
commercially sensitive, proprietary or confidential nature
will be kept strictly confidential by the party receiving such
communication.
15.2 Each of such parties will take reasonable precautions to
ensure that its officers and employees and the officers and
employees of each of its subsidiaries comply with the
provisions of this clause and that none of such individuals
discloses any term of this agreement, or discloses or uses any
confidential information which it acquires in connection with
this agreement or in connection with the negotiations leading
up to the same, unless the other party agrees.
15.3 Nothing in this clause will prevent the disclosure of any
information required by law or any regulation or rule of any
stock exchange or other regulatory authority, save that such
disclosure shall be made by the party concerned only after
reasonable consultation, if practicable, with the other and,
so far as practicable, taking into account the reasonable
requirements (as to timing, contents and manner of making or
despatch of such disclosure) of the other.
16. DURATION AND TERMINATION
15
16.1 Without prejudice to any accrued rights and obligations this
agreement shall continue in full force and effect until the
earlier of:
16.1.1 the date on which the Company ceases to have more
than one shareholder;
16.1.2 the date on which the parties agree in writing that
this agreement is to terminate;
16.2 the date of the commencement of winding up of the Company.
16.3 The termination of this agreement shall be without prejudice
to the rights of the parties in respect of any breach of this
agreement occurring prior to such termination.
16.4 Notwithstanding the above provisions, the obligations of the
parties pursuant to clause 15 will survive termination.
17. ANNOUNCEMENTS
17.1 Subject to clause 17.2 no announcement, communication or
circular concerning the transactions referred to in this
agreement shall be made or despatched at any time (whether
before or after Completion) by either party without the prior
written consent of the other (such consent not to be
unreasonably withheld or delayed).
17.2 Where the announcement, communication or circular is required
by law or any regulation or rule of any stock exchange or
other regulatory authority, it shall be made by the party
concerned only after reasonable consultation, if practicable,
with the other and, so far as practicable, taking into account
the reasonable requirements (as to timing, contents and manner
of making or despatch of the announcement, communication or
circular) of the other.
18. FURTHER ASSURANCE
Each of the parties agrees to perform all further acts and things as
the other parties may reasonably require to implement and give effect
to the provisions of this agreement and for the purposes of vesting in
the parties the full rights and benefits to be vested in the parties
under this agreement, including voting any of its shares in the
Company.
19. GENERAL
19.1 This agreement and the documents referred to in it contain the
whole agreement between the parties relating to the
transaction contemplated by this agreement and supersede all
previous agreements between the parties in relation to these
transactions.
16
19.2 No variation or agreed termination of this agreement shall be
of any force or effect unless in writing and signed by each
party.
19.3 The failure to exercise or any delay in exercising any right
or remedy under this agreement shall not constitute a waiver
of that right or remedy or a waiver of any other right or
remedy and no single or partial exercise of any right or
remedy under this agreement shall prevent any further exercise
of that right or remedy or the exercise of any other right or
remedy.
19.4 This agreement shall be personal to the parties and save where
specified otherwise no party shall be entitled to assign its
rights or obligations under this agreement to any person
without the prior written consent of the other parties.
19.5 Save as provided below a person who is not a party to this
agreement has no right under the Isle of Man Contracts (Rights
of Third Parties) Xxx 0000 to enforce any term of this
agreement but this does not affect any right or remedy of a
third party which exists or is available apart from that Act).
It is the intention of the parties that the shareholders of
GMN will have the right to enforce clause 10.5 as if they were
parties to this agreement. The parties may by agreement
rescind or vary any or all of the terms of this agreement
without the consent of any such shareholders.
19.6 Each party will bear its own costs in connection with the
preparation and execution of this agreement.
19.7 In the event of an ambiguity or conflict between the
provisions of this agreement and the articles of association
of the Company the provisions of this agreement will prevail
as between the parties.
20. NOTICES
20.1 Any notice or other communication under or in connection with
this agreement shall be in writing and shall be delivered
personally or by commercial courier to each party due to
receive the notice or communication at its address set out
below:-
20.1.1 the Investor: Xxxxxxxxx Xxxxx
00/00 Xxxxx Xxxxxx
Xxxxxxx
Isle of Man
British Isles
Fax; x00 0000 000000
17
20.1.2 the Company: Xxx Xxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xx Xxxxxx
Xxxxxx XX0 0XX
British Isles
Fax: x00 0000 000000
20.1.3 GMN: Xxxxxx Xxxxx
Xxxxxx Xxxx
Xxxxxxx XX0 0XX
Isle of Man
British Isles
Fax: x00 0000 000000
or at such other address as the relevant party may specify by
notice in writing to the other parties.
20.2 Any notice or other communication shall be deemed to have been
duly given if delivered personally when left at the address
referred to in the immediately preceding clause, or if
delivered by commercial courier on the date of signature of
the courier's receipt.
21. GOVERNING LAW
21.1 The construction, validity and performance of this agreement
shall be governed and construed in all respects by the laws of
the Isle of Man and the parties hereby submit to the
non-exclusive jurisdiction of the Isle of Man.
21.2 Each of the parties irrevocably agrees and submits to the
non-exclusive jurisdiction of the courts of the Isle of Man to
hear and determine any suit, action or proceeding which may
arise out of or in connection with this agreement.
22. COUNTERPARTS
This agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but the
counterparts together shall constitute one and the same instrument.
18
SCHEDULE 1
PARTICULARS OF THE COMPANY
REGISTERED NUMBER: 96407 B
REGISTERED OFFICE: c/o Provident Trust Limited, PO Box 9204, Charlotte House,
Charlotte Street, Nassau, Bahamas
COUNTRY OF INCORPORATION: Bahamas
DATE OF INCORPORATION: 21 September 1999
SHARE CAPITAL:
Authorised: US$ 5000 consisting of 500,000 ordinary shares of US$0.01 each
Issued: 100 issued shares of US$0.01 each
SHAREHOLDER: G.M. Network Limited is the holder of 100 ordinary shares of
US$ 0.01 each
DIRECTORS: Xxxxxxxxxx xx Xxxxx; Xxxxx Xxxx; Xxxxxxxx Xxxx
SECRETARY: ASL Financial and Commercial Services Limited
AUDITORS: Deloitte & Touche, Jersey
SCHEDULE 2
WARRANTIES
1. CORPORATE
1.1 The details of the Company as set out in Schedule I are
complete and accurate in all respects,
1.2 The Company is a duly organised limited liability company
validly existing under the laws of the Bahamas.
1.3 The share register of the Company contains true, complete and
accurate records of the members of the Company at the date
hereof.
1.4 True copies of the memoranda and articles of association of
the Company have been disclosed to the Investor and set out
all rights attaching to the share capital of the Company, as
amended pursuant to clause 3.
2. SUBSCRIPTION SHARES AND TITLE TO SHARES
2.1 On issue the Subscription Shares will constitute 50.2487% of
the Company's issued share capital and (save in relation to
the Options referred to in clauses 8 and 9) will be free from
any Encumbrance.
2.2 GMN is the legal and beneficial owner of the whole issued and.
allotted share capital of the Company. Such share capital is
all fully paid up and is free from any Encumbrance.
2.3 The unissued share capital of the Company is free from any
Encumbrance and there are no arrangements in force or claimed
entitling any person to, or to the creation of, any
Encumbrance or to the issue or creation of any shares, stock,
debentures or loan capital of the Company.
SCHEDULE 3
AMENDMENT OF THE COMPANY'S ARTICLES OF ASSOCIATION
The Company's articles of association will be amended as follows:
1. By inserting after existing article 16 the following new articles (and
by numbering them accordingly):
"CALLS ON SHARES AND FORFEITURE"
An amount payable in respect of a share at any fixed date, whether in
respect of nominal value or premium, shall be deemed to be a call in
respect of moneys unpaid on such share and the relevant member shall
pay to the Company the required amount on such date without the need
for further notice of such call to be given to the relevant member. If
the directors however resolve that no call will he deemed made on such
date the call will be made on such later date as the directors within
their discretion determine having given the relevant member a minimum
of 7 days notice of such later date.
If payment is not duly made on the relevant fixed date in respect of a
call referred to in article [1, or such later date as the directors
shall determine in accordance with such article, any share in respect
of which payment was not duly made, may be forfeited by a resolution of
the directors and the forfeiture shall include all dividends or other
moneys payable in respect of the forfeited shares and not paid before
the forfeited.
A person any of whose shares have been forfeited shall cease to be a
member in respect of them and shall surrender to the Company for
cancellation the certificate for the shares, forfeited.
2. By inserting after existing article 41 the following new article (and
by numbering it accordingly):
"No member shall vote at any meeting of members or at any separate
meeting of any class of shares in the Company, either in person or by
proxy, in respect of any share held by him unless all moneys presently
payable by him in respect of that share have been paid"; and
3. By adding at the end of existing article 94 the following sentence:
"Except as otherwise provided by the rights attached to shares, all
dividends shall be declared and paid according to the amounts paid up
on the shares on which the dividend is paid. No dividend shall be
declared and paid in respect of unpaid shares"; and
4. by renumbering the existing articles accordingly.
SCHEDULE 4
DEED OF ADHERENCE TO
SHAREHOLDERS AGREEMENT
THIS DEED is made on the day of
BY
DRD (ISLE OF MAN) LIMITED, a company incorporated as a limited company in
accordance with the laws of the Isle of Man having registration number 94445 C
and its registered address at Xxxxxxxxx Xxxxx, 00/00 Xxxxx Xxxxxx, Douglas, Isle
of Man (the "Covenantor")
WHEREAS:
(A) G.M. Network Limited ("GMN") and the persons listed in the attached
schedule, being the shareholders in GMN have entered into or agreed to
adhere to the provisions of a shareholders agreement dated June 2003
("the Shareholders Agreement"). The Shareholders Agreement governs
their relationship as shareholders in GMN and establishes the manner in
which the affairs of GMN would be conducted.
(B) The Covenantor wishes to become a party to the Shareholders Agreement
immediately upon acquiring certain shares in GMN and wishes to amend
the Shareholders Agreement with the effect that the Covenantor becomes
a party thereto and as such assumes the rights and obligations of a
Shareholder under the Shareholders Agreement.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION
Words and expressions defined in the Shareholders Agreement shall,
unless the context otherwise requires, have the same meanings when used
in this Deed.
2. CONDITION
This Deed is conditional upon the Covenantor acquiring shares in GMN.
3. ADHERENCE
The Covenantor hereby covenants to and undertakes with each of the
other persons in the schedule to this Deed and with each such other
person who may from time to time expressly adhere to the Shareholders
Agreement (by way of execution of a deed or by way of novation) to be
bound by and comply in all respects with the Shareholders Agreement,
and to assume the benefits of
the Shareholders Agreement, as if the Covenantor had executed the
Shareholders Agreement and was named as an original party thereto.
4. NOTICES
For the purpose of the Shareholders Agreement, the Covenantor's address
for notices shall be as follows:
Address: Xxxxxxxxx Xxxxx
00/00 Xxxxx Xxxxxx
Douglas
Isle of Man
British Isles
Fax No: x00 0000 000000
Addressed for the attention of:
5. GOVERNING LAW
This Deed shall be governed by and construed in accordance with Isle of
Man law.
SCHEDULE
THE SHAREHOLDERS
1. CONSOLIDATED BULLION LIMITED of Xxxxxx Xxxxx, Palace Road, Xxxxxxx,
Isle of Man;
2. METALION INVESTMENTS LIMITED of Xxxxxxxxxxxxxxxxx 0, Xxxxxxxx, XX-0000,
Xxxxxx, Xxxxxxxxxxx;
3. TRIAMA HOLDINGS LIMITED of Xxxxxxxxxxxxxxxxx 0, Xxxxxxxx, XX-0000,
Xxxxxx, Xxxxxxxxxxx;
4. LASCAUX INVESTMENTS Corp having its registered address at Tropic Isle
Building, PO BOX 438, Road Town, Tortola, British Virgin Islands, with
administrative office at 00-00 Xxx Xxxxxx, Xx Xxxxxx, Xxxxxx, Xxxxxxx
Xxxxxxx, XX0 0XX;
5. THE EXECUTOR OF THE ESTATE OF THE LATE XXXXX X. XXXXXXXXX III care of
Xxxxx X Xxxxxxxx, 228 St Xxxxxxx Avenue, 000 Xxxxxxx Xxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxx, X.X.X.;
6. XXXXX XXXXXXXX of 0-0 Xxxxxxxx Xxxx, Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx;
7. XXXXXXX DUQUESNE of L'ancien Xxxxxxxxxx, 00000 Xxxxxx-Xxxxxxx, Xxxxxx;
8. XXXX XXXXXXXX of 00 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx, 00000,
X.X.X.;
9. XXXXX X XXXX & ASSOCIATES INC of 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000, X.X.X.;
10. XXXXXX XXXXX of 0000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, X.X.X.;
11. XXXXXXXX DEN of 00000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxx XX 00000, X.X.X.;
12. XXXX XXXXXX of 00 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 0000, Xxxxx
Xxxxxx;
13. XXXXXXX XXXXX of 00 Xxxxxxxx Xxxx, Xxxxxx Xxxx, XX 00000, U.S.A.;
14. XXX XXXXXX of Xxxxxxxxxxxxxxx 0, 0000 Xxxxxx, Xxxxxxxxxxx;
15. XXXXX XXXXXXXX of Arrendamientos, Diversificados, Plastico#4, Col. San
Francisco, Cuautlalpan, Naucalpan, Mex 53560, Mexico;
16. XXXXXX X'XXXXX of Garden Flat, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx X0 0XX;
17. XXXXXXX XXXXX of 000 Xxxxxxx Xxxxxx, Xxxxxxxxx 0-X, Xxxxxxxx, Xxx Xxxx
00000-0000, U.S.A.;
18. TOWNELEY CAPITAL INTERNATIONAL (CAYMAN) LDC of Zephyr House, Xxxx
Street, Grand Cayman, B.W.1.;
19. XXXXXX X. XXX XXX of Apartment 301, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, X.X.X.;
20. INDALCO S.A. of Citico Building, XX Xxx 000 Xxxx Xxxx, Xxxxxxx, Xxxxxxx
Xxxxxx Xxxxxxx;
21. QUATHLAMBA LIMITED of Le Gallais Xxxxxxxx, PO Box 621, 54 Bath Street,
St Helier Jersey, Channel Islands XX0 0XX
22. XXXX XXXXXXXXX, TRADING AS AERON CAPITAL, of 0 Xxxxxx Xxxx, Xxxxxxx, XX
Xxxxxx, X0X 0X0
23. IAMGOLD CORPORATION of 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X
0X0, Xxxxxx
24. CARIBBEAN INVESTMENT BANK INC., A CORPORATION INCORPORATED UNDER THE
LAWS of Barbados care of 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X
0X0
25. REIDRICK & STRUGGLES INC. of 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, XX 00000,
Xxxxxx Xxxxxx of America
26. SPROTT ASSET MANAGEMENT INC of Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, XXX0X 0X0, Xxxxxx
27. ASL INVESTMENTS LIMITED of Bel Xxxxx Xxxxx, Xxxxxxxx Xxxxxx, Xx Xxxxxx,
Xxxxxx XX0 0XX, British Isles
28. YEADON LIMITED of
29. XXXX XXX
30. ANTHEM XXXXXXXXX
31. XXXXXX XXXXXXX
00. XXXXXXXXXX XX XXXXX
00. XXX XXXX
34. XXXXX XXXXXX
DULY EXECUTED AND DELIVERED as a Deed on the date first written above.
Executed as a deed by DRD (ISLE OF MAN) LIMITED acting by:
____________________________________
Directory
____________________________________
Director/Secretary
In the presence of:
____________________________________
Witness: Name
Address:
Occupation:
SCHEDULE 5
INTER COMPANY LOANS
As soon as practicable following payment by the Investor of the Subscription
Balance the Company will advance the sum of US$ 500,000 (five hundred thousand
United States dollars) to Net Transactions Limited; and US$500,000 (five hundred
thousand United States dollars) to Net-Systems Software Limited, in each case by
way of an interest free loan repayable no later than on the date of completion
of the exercise of the relevant option referred to in clause 8.
DULY EXECUTED AND DELIVERED as a Deed on the date first written above.
Executed as a deed by DRD (ISLE OF MAN) LIMITED acting by:
/s/ I.L. Xxxxxx
-----------------------------
Director
-----------------------------
Director/Secretary
In the presence of:
-----------------------------
Witness: Name, address and Occupation
THIS AGREEMENT has been entered into on the date stated at the beginning of this
document.
Signed by: )
for and on behalf of )
DRD (ISLE OF MAN) LIMITED )
in the presence of: )
Signed by: )
for and on behalf of: )
NET-GOLD SERVICES LIMITED )
in the presence of: )
Signed by: )
for and on behalf of: )
G.M. NETWORK LIMITED )
in the presence of: )
