CALL OPTION AGREEMENT
by
LUNDA SUL HOLDINGS (PROPRIETARY) LIMITED
in favour of
RANDGOLD AND EXPLORATION COMPANY LIMITED
in respect of
LUNDA ALLUVIAL OPERATIONS (PROPRIETARY) LIMITED
TABLE OF CONTENTS
1. INTERPRETATION 3
2. PREAMBLE 4
3. GRANTING OF CALL OPTION 5
4. CONSIDERATION FOR CALL OPTION 5
5. TERMS & CONDITIONS OF SALE OF LUNDA ALLUVIAL OPERATIONS SHARES 5
6. DISPUTE RESOLUTION 8
7. DOMICILIA AND NOTICES 8
8. GENERAL 9
9. COSTS 9
1. INTERPRETATION
In this agreement, unless the context clearly indicates a contrary
intention, the words and phrases listed below and their cognates, shall
bear the following meanings:
1.1 "Refraction" means Refraction Investments (Proprietary) Limited,
registration no. 2003/023671/07, a private company registered in
accordance with the company laws of the Republic of South Africa;
1.2 "business day" means any day of the week other than a Saturday, Sunday
or public holiday;
1.3 "call option" means the right granted by Lunda Sul Holdings to
Randgold in terms of clause 3.1 to purchase the Lunda Alluvial
Operations shares and loan account;
1.4 "effective date", in the event of Randgold exercising the call option,
means the date on which Randgold issues Lunda Sul Holdings with the
share certificate relating to the Randgold shares;
1.5 "loan account" means all claims which Lunda Sul Holdings may have
against Lunda Alluvial Operations as at the effective date from
whatsoever cause arising;
1.6 "Luembe Mining" means Luembe Mining (Proprietary) Limited,
registration no. 2003/011128/07, a private company registered in
accordance with the company laws of the Republic of South Africa;
1.7 "Luembe Mining shares" means 70% (seventy percent) of the total issued
shares of Luembe Mining held by Refraction as referred to in 2.1;
1.8 "minority shares" means 30% (thirty percent) of the total issued
shares of Luembe Mining.
1.9 "Lunda Sul Holdings" means Lunda Sul Holdings (Pty) Limited,
registration number 2003/016988/07, a private company registered in
accordance with the company laws of the Republic of South Africa;
1.10 "Lunda Alluvial Operations" means Lunda Alluvial Operations
(Proprietary) Limited, registration no. 2003/019031/07, a private
company registered in accordance with the company laws of the Republic
of South Africa;
1.11 "Lunda Alluvial Operations shares" means 100% (one hundred percent) of
the issued shares of Lunda Alluvial Operations held by Lunda Sul
Holdings;
1.12 "Refraction shares" means 100% (one hundred percent) of the issued
shares in Refraction held by Lunda Alluvial operations;
1.13 "Randgold" means Randgold & Exploration Company Limited, registration
number 1992/005642/06, a public company incorporated in accordance
with the laws of the Republic of South Africa having its registered
office at 0xx Xxxxx, 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, the shares of
which are quoted on the Johannesburg Stock Exchange;
1.14 "Randgold shares" means the shares to be issued by Randgold to Lunda
Sul Holdings in terms of clause 4 below;
1.15 "shareholders' agreement" means the agreement entered into between the
minority shareholders and Refraction on 10 December2003;
1.16 an expression which denotes any gender includes the other genders, a
natural person includes an artificial person and vice versa and the
singular includes the plural and vice versa.
2. PREAMBLE
2.1 Lunda Sul Holdings is the registered owner of 100% (one hundred
percent) of the issued shares of Lunda Alluvial Operations, which
holds 100% of the issued share capital of Refraction, which in turn
holds 70% of the issued share capital of Luembe Mining, a company that
holds certain rights to mine for diamonds in Angola.
2.2 Lunda Sul Holdings has agreed in respect of its shareholding in Lunda
Alluvial Operations, to grant Randgold a call option in return for the
payment by Randgold of the consideration referred to in clause 4.
2.3 The parties wish to record the terms and conditions of their agreement
as they hereby do.
3. GRANTING OF CALL OPTION
3.1 Lunda Sul Holdings hereby grants Randgold with effect from 1 January
2004, a call option to purchase, as an indivisible entity, the Lunda
Alluvial Operations shares
3.2 Should Randgold wish to exercise the call option, it shall do so by
written notice duly signed on its behalf and delivered to Lunda Sul
Holdings on or before 17h00, 31st March 2004 failing which the call
option shall lapse.
4. CONSIDERATION FOR CALL OPTION
Randgold shall issue to Lunda Sul Holdings 2,268,000 (two million two
hundred and sixty eight thousand) ordinary Randgold shares, in respect of
payment of the consideration, which shares shall be delivered to Lunda Sul
Holdings within 10 (ten) business days of the date of the exercising by
Randgold of the call option.
5. TERMS AND CONDITIONS OF SALE OF LUNDA ALLUVIAL OPERATIONS SHARES
If Randgold exercises the call option, the resulting sale of the Lunda
Alluvial Operations shares shall be on the following terms and conditions:
5.1 Lunda Alluvial Operations is and shall be a company duly incorporated
in accordance with the laws of the Republic of South Africa, and on
the effective date:
5.1.1 will have no assets other than the Refraction shares;
5.1.2 will not be under any obligation to increase or reduce or vary
its issued share capital nor will it have granted any options
or prior rights to any person to acquire any shares in its
capital or any of its assets or any part thereof;
5.1.3 will have no liabilities other than claims that Lunda Sul
Holdings may have against Lunda Alluvial Operations;
5.1.4 will not have entered into or be under any obligation to enter
into any guarantees, indemnities or other forms of
intercession;
5.1.5 will have complied with all its obligations under the
Companies Act and the Income Tax Act of the Republic of South
Africa and with all other laws applicable to it and/or its
undertaking;
5.1.6 will not have any employees;
5.1.7 will not be bound by any contracts, save for the shareholders'
agreement and, indirectly, the operating agreement, copies of
which agreements Randgold acknowledges having received from
Lunda Sul Holdings prior to signature of this agreement;
5.1.8 will not be engaged in any litigation, arbitration or criminal
proceedings, nor will any such proceedings be threatened.
5.2 Lunda Sul Holdings further warrants that the holders of the minority
shares in Luembe Mining have consented to this agreement and to the
sale which will result from the exercise of the call option, free of
any pre-emptive rights to which the holders of the minority shares may
be entitled in terms of the shareholders' agreement.
5.3 Lunda Sul Holdings further warrants that the only asset of Refraction
is the Luembe Mining shares and the only liability is a loan from
Lunda Alluvial Operations.
5.4 Randgold shall be deemed to have acknowledged that it shall be bound
by all the terms and conditions of the shareholders' agreement.
5.5 Randgold will not be entitled to cancel this sale as a result of a
breach of any of the above warranties unless the breach is material
and is incapable of being remedied by payment of compensation or if
the breach is capable of being remedied by payment of compensation,
Lunda Sul Holdings fails to pay such compensation within 14 (fourteen)
business days of the amount thereof being determined.
5.6 On the effective date, Lunda Sul Holdings shall deliver to Randgold,
against delivery by Randgold of the share certificate/s relating to
the Randgold shares:
5.6.1 the share certificate in respect of the Lunda Alluvial
Operations shares together with a duly signed and currently
dated share transfer form in respect thereof;
5.6.2 a written cession of the claims in favour of Randgold;
5.6.3 a resolution by the directors of Lunda Alluvial Operations:
5.6.3.1 approving the transfer of the Lunda Alluvial
Operations shares; and
5.6.3.2 appointing as directors of Lunda Alluvial Operations
such nominees of Randgold as Randgold may nominate;
5.6.4 the Certificate of Incorporation and Memorandum and Articles
of Association of Lunda Alluvial Operations together with all
books of account and records of the company, and
Lunda Sul Holdings shall generally do all such things as may
be necessary to place Randgold in control of the company.
5.7 Lunda Sul Holdings will, on the exercising of this call option by
Randgold, grant to Randgold a pre-emptive right to enter into joint
venture mining agreements over all properties (diamond concessions)
held or controlled by Lunda Sul Holdings. The properties are detailed
in the confidential Annexure "A".
5.8 Randgold undertake to keep the details of the properties referred to
in 5.7 confidential and will enter into confidentiality Agreements
with third parties in respect thereof.
6. DISPUTE RESOLUTION
Any dispute arising from or in connection with this agreement shall be
finally resolved in accordance with the Rules of the Arbitration Foundation
of Southern Africa by an arbitrator or arbitrators appointed by the
Foundation. Unless otherwise agreed, the arbitration hearing shall take
place in Johannesburg.
7. DOMICILIA AND NOTICES
7.1 The parties all choose domicilium citandi et executandi ("domicilium")
for the purposes of giving any notice, the payment of any sum, the
serving of any process and for any other purpose arising from this
agreement as follows:
7.1.1 Lunda Sul Holdings at 0 Xxxxxx Xxxxxx, Xxxxxxx, 0000
7.1.2 Randgold at 0xx Xxxxx, 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx
7.2 Each of the parties shall be entitled from time to time, by written
notice to the others, to vary its domicilium to any other address
within the Republic of South Africa, which is not a post office box or
poste restante.
7.3 Any notice required or permitted to be given in terms of this
agreement shall be valid and effective only if in writing.
7.4 Any notice given and any payment made by one party to the others ("the
addressee") which:-
7.4.1 is delivered by hand during the normal business hours of the
addressee at the addressee's domicilium for the time being
shall be presumed, until the contrary is proved, to have been
received by the addressee at the time of delivery;
7.4.2 is given by telefax shall be deemed, in the absence of proof
to the contrary, to have been received within 1 (one) hour of
the commencement of the following business day.
8. GENERAL
8.1 Neither party shall be bound by any representation, warranty, promise
or the like not recorded herein.
8.2 No addition to, variation or agreed cancellation of this agreement
shall be of any force or effect unless in writing and signed by or on
behalf of the parties.
8.3 No extension of time or indulgence which either party ("the grantor')
may grant to the other ("the grantee") shall constitute a waiver of
any of the rights of the grantor, who shall not thereby be precluded
from exercising any rights against the grantee which may have arisen
in the past or which might arise in the future.
9. COSTS
The costs of and incidental to the transfer of the Lunda Alluvial
Operations shares to Randgold and the Randgold shares to Lunda Sul
Holdings, including the stamp duty payable thereon, shall be borne by
Randgold.
SIGNED AT Johannesburg ON THIS 5th DAY OF January 2004.
AS WITNESSES:
Signed - illegible
For and on behalf of
LUNDA SUL HOLDINGS (PTY) LIMITED 1. illegible
Who warrants his authority hereto
2. /s/ X. Xxxxxx
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SIGNED AT Johannesburg ON THIS 5th DAY OF January 2004.
/s/ R. B. Kebble AS WITNESSES
For and on behalf of
RANDGOLD & EXPLORATION 1. illegible
COMPANY LTD
who warrants his authority hereto
2. /s/ X.Xxxxxx
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