DEFINITIVE AGREEMENT
between
MUSCA HOLDING LIMITED
(a company incorporated in accordance with the laws of the British Virgin
Islands under Registration Number 548729)
(collectively "the seller")
and
TRINITY LEARNING CORPORATION
(a company incorporated in accordance with the laws of the State of Utah in
the United States of America under Entity Number 5118314-0142)
("the purchaser")
and
DANLAS LIMITED
(a company incorporated in accordance with the laws of the British Virgin
Islands under Registration Number 548725)
("the company")
1. INTERPRETATION
In this agreement:
1.1 clause headings are used for convenience only and shall be
ignored in its interpretation;
1.2 unless contrary to, or otherwise indicated by the context, an
expression which denotes:
1.2.1 any gender includes the other genders;
1.2.2 a natural person includes an artificial person and vice versa;
and
1.2.3 the singular includes the plural and vice versa;
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1.3 the following expressions bear the meanings assigned to them
below and cognate expressions bear corresponding meanings:
1.3.1 "this agreement" - this agreement read together with the
appendices hereto;
1.3.2 "accounts" the consolidated audited annual financial statements
of the company as at and for the year ended 2003;
1.3.3 "associate" - in relation to Irca, another company in which Irca
owns not less than so much of the share capital as confers on
Irca the right to exercise more than 25% (twenty five per centum)
of the voting rights exercisable at general meetings of such
company, but which is not a subsidiary (as that terms is defined
in the Companies Act 61 of 1973, of the RSA, as amended) of Irca;
1.3.4 "bank guarantees" bank guarantees aggregating a maximum of
US$500 ▇▇▇,▇▇ (▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Dollars)
acceptable to the seller to be issued by the purchaser in favour
of Standard Bank pursuant to 17.2 and which shall be pre-approved
by Standard Bank;
1.3.5 "business day" - any day other than a Saturday, Sunday or public
holiday in England;
1.3.6 "closing date" 30 November 2003;
1.3.7 "convertible notes" the first convertible note and the
convertible notes attached hereto as Appendices A1 and A2 to be
signed by the purchaser contemporaneously with this agreement;
1.3.8 "escrow agent"- ▇▇▇▇ ▇▇▇▇▇ of London;
1.3.9 "escrow agreement" the escrow agreement to be concluded by and
between the purchaser, the seller and the escrow agent within 15
(fifteen) business days of the signature date substantially in
the form attached hereto as Appendix B and subject to any
reasonable amendments required in writing by the escrow agent;
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1.3.10. "fair market value" means in relation to:
1.3.10.1. 10.5, the average of the closing price per share of the purchaser
on the stock exchange reported for the ten business days
immediately preceding the date of the occurrence of the relevant
event which gives rise to the seller becoming liable to pay any
amount to the purchaser pursuant to all or any of the indemnities
contained in clause 10, or if the purchaser is not then listed on
the stock exchange, the value per share of the purchaser as
determined by KPMG London Office or their successor in practice
at the relevant time ("KPMG") on the date of the occurrence of
the relevant event which gives rise to the seller becoming liable
to pay any amount to the purchaser pursuant to all or any of the
indemnities contained in clause 10;
1.3.10.2. 1.3.22.1, 6.1.1, and 6,2,3,1, the average of the closing price
per share of the purchaser on the stock exchange reported for the
ten business days immediately preceding the first determination
date;
1.3.10.3. 1.3.22.2, 6.1.2, and 6,2,3,2, the average of the closing price
per share of the purchaser on the stock exchange reported for the
ten business days immediately preceding the second determination
date;
1.3.11. "the first convertible note" the convertible note attached
hereto as Appendix A;
1.3.12. "first determination date" the date of the auditor's
determination as contemplated in 1.3.22.1, 6.1.1, and 6,2,3,1;
1.3.13. "second determination date" - the date of the auditor's
determination as contemplated in 1.3.22.2, 6.1.2, and 6,2,3,2;
1.3.14. "the loan" a loan of US$ 500 000,00 (five hundred thousand
United States Dollars) to be lent and advanced by the purchaser
to the company pursuant to 17.4;
1.3.15. "first option" the first option as that term defined in the
sale of shares agreement;
1.3.16. "GAAP" Generally Accepted Accounting Principles in the RSA;
1.3.17. "Irca" Irca (Proprietary) Limited, a company incorporated in
accordance with the laws of the Republic of South Africa under
Registration Number 1986/004379/07);
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1.3.18. "Irca Group" Irca, its subsidiaries (as that term is defined in
the Companies Act 61 of 1973, of the RSA, as amended) and its
associates from time to time;
1.3.19. "negotiable form" in respect of share certificates, bearer
form, except where the relevant shares are registered in the name
of a holder in which case the share certificates shall be
accompanied by the relevant share transfer form duly executed by
the holder;
1.3.20. "parties" - collectively the seller, the purchaser and the
company;
1.3.21. "profit before tax" the consolidated profit before tax,
depreciation and amortization of the Irca Group for the relevant
period to be determined in accordance with the provisions of
GAAP;
1.3.22. "the purchase consideration" - the purchase consideration of the
sale shares as stated in 6.1, which purchase consideration shall
be subject to adjustment upwards in accordance with the
following:
1.3.22.1. if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2004 and its turnover for that
period equals or exceeds US10 000 000,00 (ten million Unites
States Dollars) as determined in writing by the auditors of
the Irca Group at the relevant time, which determination the
purchaser shall procure is completed as soon as practicable
after 30 June 2004, the purchaser shall allot and issue to
the seller 500 000 (five hundred thousand) fully paid
ordinary shares in the capital of the purchaser at their
fair market value within 10 (ten) business days of the first
determination date;
1.3.22.2. if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2005 and its turnover for that
period equals or exceeds US$12 500 000,00 (twelve million
five hundred thousand Unites States Dollars) as determined
in writing by the auditors of the Irca Group at the relevant
time, which determination the purchaser shall procure is
completed as soon as practicable after 30 June 2005, the
purchaser shall allot and issue to the seller 500 000 (five
hundred thousand ) fully paid ordinary shares in the capital
of the purchaser at their fair market value within 10 (ten)
business days of the second determination date; and;
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1.3.23. "RSA" the Republic of South Africa;
1.3.24. "the sale of shares agreement" the sale of shares agreement to
be concluded by and between the company, Irca Investments
(Proprietary) Limited (a company incorporated in accordance with
the laws of the RSA under Registration Number 2002/027567/07) and
Irca;
1.3.25. "sale shares" - the 1000 (one thousand__________________)
ordinary shares of a nominal value of US$1.00 (One United States
Dollar) each owned by the seller in the issued share capital of
the company and which constitute 100% (one hundred per centum) of
the entire issued share capital of the company;
1.3.26. "second option" the second option as that term is defined in
the sale of shares agreement;
1.3.27. "secondary stock"- the combined amount of secondary stock (as
that term is defined in each of the convertible notes) being
900 000 (nine hundred thousand) fully paid shares of common
stock of the purchaser;
1.3.28. "signature date" - the date on which this agreement is signed by
the party hereto which signs it last in time;
1.3.29. Standard Bank"- the Standard Bank of South Africa Limited;
1.3.30. "stock exchange"- a primary stock exchange that is subject to
financial requirements for listing such as the NASDAQ Small Cap,
AMEX, NASDAQ National, or the NYSE but excluding secondary
exchanges such as OTC BB;
1.3.31. "subsidiary" in relation to the company ("holding company") is
another company in which the holding company:
1.3.31.1. holds a majority of voting rights; or
1.3.31.2. is a member and has the right to appoint or remove a
majority of such company's board of directors; or
1.3.31.3. is a member and controls alone or with other shareholders or
members the majority of such company's voting rights;
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1.3.32. "turnover" the consolidated turnover of the Irca Group for
the relevant period to be determined in accordance with the
provisions of GAAP;
1.4. if any provision in a definition is a substantive provision
conferring rights or imposing obligations on any party,
notwithstanding that it is only in the definition clause, effect
shall be given to it as if it were a substantive provision in the
body of this agreement;
1.5. where figures are referred to in numerals and in words, if there
is any conflict between the two, the words shall prevail;
1.6. when any number of days is prescribed in this agreement, same
shall be reckoned exclusively of the first and inclusively of the
last day unless the last day falls on a Saturday, Sunday or
public holiday in England, in which case the last day shall be
the next succeeding business day;
1.7. the rule of construction, that this agreement shall be
interpreted against the party responsible for the drafting and/or
preparation hereof, shall not apply;
1.8. schedules, appendices or annexures to this agreement shall be
deemed to be incorporated in and form part of this agreement; and
1.9. expressions defined in this agreement shall bear the same
meanings in schedules, appendices or annexures to this agreement
to the extent to which they do not themselves contain their own
definitions.
2. PREAMBLE
It is recorded and agreed that:
2.1. the seller is agreeable to selling the sale shares to the
purchaser upon the terms and conditions contained in this
agreement; and
2.2 the parties wish to record their agreement in writing.
3. COUNTERPARTS
This agreement may be signed by the parties in any number of separate
counterparts, including facsimile counterparts, each of which when
signed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
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4. SUSPENSIVE CONDITION
4.1. This agreement is subject to the company owning, on or before 1
November 2003, not less than 51% (fifty one per centum) of the
issued ordinary share capital of Irca.
4.2. The seller shall use its best endeavours to procure the timeous
fulfillment of the suspensive condition.
4.3. If the suspensive condition is not fulfilled for any reason
whatsoever on or before 1 November 2003, then:
4.3.1. this whole agreement (other than 1, 3, this 4, 8, 11 to 15
(both inclusive) and 20, by which the parties shall remain
bound) shall be of no force or effect;
4.3.2. without prejudice to 20 below, the parties shall be entitled
to be restored as near as possible to the positions in which
they would have been had this agreement not been entered
into; and
4.3.3. neither party shall have any claim against the other in
terms of this agreement except for such claims (if any) as
may arise from a breach of this 4 or from any other
provision of this agreement by which the parties remain
bound.
5. SALE OF SALE SHARES
Notwithstanding the signature date, the seller sells to the purchaser
which purchases the sale shares with full title guarantee, free from
any encumbrances and with all rights attaching to them with effect to
and from the closing date, on which date all risk in and benefits
attaching to the sale shares shall be regarded as having passed to the
purchaser.
6. PURCHASE CONSIDERATION AND DISCHARGE
6.1. The purchase consideration payable by the purchaser to the seller
for the sale shares is the convertible notes, which purchaser
consideration shall be subject to upward adjustment as follows:
6.1.1. if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2004 and its turnover for that
period equals or exceeds US$10 000 000,00 (ten million
Unites States Dollars) as determined in writing by the
auditors of the Irca Group at the relevant time, which
determination the purchaser shall procure is completed as
soon as practicable after 30 June 2004, the purchaser shall
allot and issue to the seller 500 000 (five hundred
thousand) fully paid ordinary shares in the capital of the
purchaser at their fair market value within 10 (ten)
business days of the first determination date;
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6.1.2. if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2005 and its turnover for that
period equals or exceeds US$12 500 000,00 (twelve million
five hundred thousand Unites States Dollars) as determined
in writing by the auditors of the Irca Group at the relevant
time, which determination the purchaser shall procure is
completed as soon as practicable after 30 June 2005, the
purchaser shall allot and issue to the seller 500 000 (five
hundred thousand ) fully paid ordinary shares in the capital
of the purchaser at their fair market value within 10 (ten)
business days of the second determination date; and
6.2. The purchase consideration shall be discharged as follows:
6.2.1. by delivery by the purchaser to the seller on the closing
date of the convertible notes duly signed by the purchaser
against confirmation in writing procured by the seller from
the escrow agent that the sale shares have been delivered to
it as contemplated in 7.1.1;
6.2.2. if the purchase consideration requires to be adjusted
upwards pursuant to 6.1 then any such adjustment shall be
discharged as follows-
6.2.2.1 if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2004 and its turnover for
that period equals or exceeds US$10 000 000,00 (ten
million Unites States Dollars) as determined in writing
by the auditors of the Irca Group at the relevant time,
which determination the purchaser shall procure is
completed as soon as practicable after 30 June 2004,
the purchaser shall allot and issue to the seller
500 000 (five hundred thousand) fully paid ordinary
shares in the capital of the purchaser of a nominal
value of $0,01 (one United States cents) each at their
fair market value within 10 (ten) business days of the
first determination date;
6.2.2.2. if the Irca Group achieves a profit before tax for the
financial year ended 30 June 2005 and its turnover for
that period equals or exceeds US$12 500 000,00 (twelve
million five hundred thousand Unites States Dollars) as
determined in writing by the auditors of the Irca Group
at the relevant time, which determination the purchaser
shall procure is completed as soon as practicable after
30 June 2005, the purchaser shall allot and issue to
the seller 500 000 (five hundred thousand ) fully paid
ordinary shares in the capital of the purchaser of a
nominal value of $0,01 (one United States cents) each
at their fair market value within 10 (ten) business
days of the first determination date.
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7. CLOSING
At 10h30 on the closing date, representatives of the parties
shall meet at ▇▇ ▇▇▇▇▇ Attorneys, Notaries & Conveyancers, which
is situate at Kentgate, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇. At that meeting the purchaser shall deliver the
purchase consideration to the seller and simultaneously therewith
the seller shall:
7.1.1. for the purposes of 19.2, deliver to the escrow agent the
share certificates in respect of the sale shares in
negotiable form to be held in escrow pursuant to this
agreement and the escrow agreement for the purchaser as
owner and the seller as pledgee provided that the purchaser
and the seller shall procure that the sale shares shall be
released from escrow and delivered to the purchaser on the
tenth anniversary of the closing date if the deemed sale
contemplated in 19 below has not occurred;
7.1.2. deliver to the purchaser written resignations of those
directors and the secretary of the company as the purchaser
may require by giving written notice to that effect to the
seller by no later than 10 (ten) business days prior to the
closing date;
7.1.3. procure that a resolution of the directors of the company is
passed:
7.1.3.1. approving the transfer of the sale shares pursuant to
this agreement; and
7.1.3.2. accepting the resignations tendered in terms of 7.1.2
above and appointing such persons as the purchaser may
nominate in writing as directors and secretary of the
company.
7.2. The seller shall either deliver to the purchaser or place the
purchaser or the purchaser's representative in control of all of
the books, records and documents of the company.
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7.3. All certificates in respect of the sale shares shall remain in
the possession of the escrow agent save as expressly otherwise
provided in this agreement and the escrow agreement.
7.4. Subject to the provisions of the escrow agreement, the seller and
the purchaser agree and shall procure that the escrow agent may
not release the share certificates in respect of the sale shares
unless:
7.4.1. a written notice, signed by the seller and the purchaser
addressed to the escrow agent, directs the escrow agent to
release the share certificates in respect of the sale shares
in negotiable form to the person specified in the notice;
7.4.2. delivery is required to give effect to the terms of this
agreement, in which event the seller and the purchaser shall
be obliged to give the notice referred to in 7.4.1 to the
escrow agent,
or unless an order from a court of competent jurisdiction or
award from an arbitral authority instructs the escrow agent as to
how the sale shares should be disbursed.
8. DISPUTES
8.1. Any dispute between any of the parties in regard to any matter
arising out of this agreement or its interpretation or their
respective rights and obligations under this agreement or its
cancellation or alleged cancellation or any matter arising out of
its cancellation or alleged cancellation, shall be referred for
determination to an expert ("the expert"). The costs of the
expert shall be borne and paid equally by the parties.
8.2. The expert shall:
8.2.1. if the matter in issue is an accounting or financial matter
only, be an independent auditor agreed upon between the
parties or, failing such agreement, nominated by the
President for the time being of the Institute of Chartered
Accountants in England and Wales (or its equivalent) or his
nominee at the instance of any of the parties;
8.2.2. if the matter in issue is a legal matter only, be Queen's
Counsel of at least 5 (five) years' standing as such and
practising as such at the London Bar agreed upon between the
parties or, failing such agreement, nominated by the
Chairman for the time being of the Bar Council of England
and Wales (or its equivalent) or his nominee at the instance
of any of the parties;
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8.2.3. if the matter in dispute is any other matter, be an
independent person agreed upon between the parties or,
failing such agreement, nominated by Chairman for the time
being of the Bar Council of England and Wales (or its
equivalent),
provided that if the parties cannot agree into which category the
dispute falls, it shall be deemed to be a legal matter only.
8.3. The appointment of the expert shall be agreed upon between the
parties to the dispute, but failing agreement between them within
a period of 14 (fourteen) days after the resolution of the
dispute has been demanded, any of the parties shall be entitled
to request the chairperson at the relevant time of the London Bar
Council (or his representatives) to make the appointment and, in
making the appointment, to have regard to the nature of the
dispute.
8.4. The expert shall act in all respects as an expert and not an
arbitrator and shall not be bound to follow the general
principles of the laws of any country, but shall decide any
dispute according to what the expert considers just and equitable
in the circumstances.
8.5. The decision of the expert:
8.5.1. shall be final and binding on the parties in the absence of
a manifest error in calculation;
8.5.2. shall be carried into effect; and
8.5.3. may be made an order of any court of competent jurisdiction.
8.6. The provisions of this clause 8:
8.6.1. constitute an irrevocable consent by the parties to any
proceedings in terms of this clause 8 and none of the parties
shall be entitled to withdraw therefrom or claim at any stage of
the proceedings that it is not bound by such proceedings;
8.6.2. are severable from the rest of this agreement and shall remain in
effect despite the termination of or invalidity or alleged
invalidity for any reason of this agreement or any part thereof;
8.6.3. shall not preclude any of the parties hereto from instituting any
injunctive proceedings in any appropriate court.
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9. WARRANTIES
9.1. The seller gives to the purchaser the warranties contained in
Appendix C hereto ("the warranties in favour of the purchaser")
and the purchaser gives to the seller the warranties contained in
Appendix D hereto ("the warranties in favour of the seller").
9.2. The purchaser shall not be entitled to cancel this agreement as a
consequence of any breach by the seller of any such warranties,
unless the breach is a material breach of a material warranty
which goes to the root of this agreement and the breach is
incapable of being remedied by payment of compensation or, if it
is capable of being remedied by payment of compensation, the
seller fails to pay the purchaser such compensation within 30
(thirty) days of the amount thereof being determined and
communicated in writing to the seller.
9.3. The provisions of 9.2 shall apply mutatis mutandis in respect of
the warranties in favour of the seller.
9.4. The seller indemnifies the purchaser against any loss, liability,
damage or expense which the purchaser may suffer pursuant to a
breach by the seller of the warranties in favour of the
purchaser. The purchaser indemnifies the seller against any loss,
liability, damage or expense which the seller may suffer pursuant
to a breach by the purchaser of the warranties in favour of the
seller.
10. INDEMNITIES
10.1 Without prejudice to any of the rights of the purchaser arising
from any of the provisions of this agreement, the seller
indemnifies the purchaser and hold it harmless against all loss,
liability, damage or expense ("damages") which the purchaser
and/or the company may suffer as a result of or which may be
attributable to:
10.1.1. any liability of the company, whether actual, contingent or
otherwise arising out of or relating to any action or
failure to act occurring prior to the signature date not
reflected in its most recent audited annual financial
statement ("the accounts");
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10.1.2. any liability of the company for taxation not provided for
in the accounts arising from or out of the profits or income
of the company out of or relating to any action or failure
to act occurring for all periods prior to the signature
date, for which purpose the term "taxation" shall include:
10.1.2.1. normal taxation;
10.1.2.2. value-added tax;
10.1.2.3. regional services levies;
10.1.2.4. secondary tax on companies;
10.1.2.5. capital gains tax;
10.1.2.6. all other forms of taxation;
10.1.2.7. any taxation arising from new assessments of taxation
and/or the reopening of any income tax assessments of
the company; and
10.1.2.8. any penalties or interest as a result thereof and/or in
regard to any of the aforegoing;
10.1.3. any claims or liabilities due to a third party (including
claims or liabilities for consequential loss) arising out of
or relating to any action or failure to act occurring before
the signature date and not provided for in the accounts or
which occurs between the signature date and the closing
date; and
10.1.4. any breach by the seller or in the event any third party
alleges facts that, if true, would mean the seller has
breached of any of the warranties in favour of the
purchaser, and/or the representations and covenants
contained herein and/or any other agreement, instrument,
certificate or document executed or delivered pursuant to
this agreement.
10.2. The purchaser shall be deemed to have suffered a loss equivalent
to the amount of any liabilities or claims against which it is
indemnified in terms of 10.1.
10.3. The purchaser shall endeavour to notify the seller of any claim
which may be made against the company in respect of any of the
matters referred to in 10.1 within a reasonable time of the
purchaser becoming aware thereof, to enable the seller to
endeavour, if they so elect, to take steps to contest such claim.
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10.4. The seller shall be entitled to contest the claim concerned in
the name of the company arising out of or relating to any action
or failure to act occurring prior to the signature date and shall
be entitled to control the proceedings in regard thereto,
provided that:
10.4.1. the seller utilizes legal counsel selected by the seller and
approved by the purchaser in writing;
10.4.2. the seller indemnifies the purchaser and the company against
all party and party and solicitor and client costs and any
other legal costs incidental to or arising out of the
proceedings which may be incurred as a consequence of such
steps and furnishes to the purchaser and the company
reasonable security against such costs; and
10.4.3. the seller shall not settle or otherwise compromise any such
claim, action or proceeding without the prior written
consent of the purchaser, such consent not to be withheld
unreasonably and such consent not to be withheld at all if
the judgment or settlement contains a full release
reasonably satisfactory to the purchaser and can be
satisfied in its entirety by the seller without any
obligation on the part of the purchaser; and
10.4.4. the purchaser shall procure that the company renders
reasonable assistance to the seller at the seller cost and
expense, in regard to the steps taken by the seller.
10.5. Without prejudice to any of the other rights of the purchaser
under this agreement, if the seller becomes liable to pay any
amount to the purchaser pursuant to all or any of the indemnities
contained in this clause 10, then the purchaser shall be
entitled, by delivering written notice to that effect to the
seller to require that all or any part of such amount be
satisfied by the reduction of the number of the secondary stock
specified in that written notice. In such event, the reduction in
the number of secondary stock shall be regarded as discharging
such amount of the seller's liability pursuant to this clause 10
as shall be calculated by multiplying the number of secondary
stock specified in such written notice by the fair market value
thereof.
10.6. The indemnities contained herein shall apply mutatis mutandis to
each of the subsidiaries.
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11. APPLICABLE LAW AND JURISDICTION
Subject to 8, all rights and obligations arising from or pursuant
to the provisions of this agreement shall be governed exclusively
by the laws of England and the courts of England shall have
exclusive jurisdiction in respect of any matters and/or disputes
arising between the parties hereto and/or any of their respective
heirs, successors-in-title and assigns.
12. ADDRESS AND NOTICES
12.1. Each of the parties chooses as their address ("address") for the
purposes of the giving of any notice, the payment of any sum, the
serving of any process and for any other purpose arising from or
pursuant to this agreement, as follows:
12.1.1. the seller : ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ C
L' Estoril, Avenue Princess ▇▇▇▇▇
▇▇▇▇▇ Carlo, Monaco
Telefacsimile : 09377 9325 6270
12.1.2. the purchaser : ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Telefacsimile : ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
12.1.3. the company : ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ C
L' Estoril, Avenue Princess ▇▇▇▇▇
▇▇▇▇▇ Carlo, Monaco
Telefacsimile : 09377 9325 6270
12.2. Any of the parties shall be entitled from time to time, by
written notice to the others, to vary its address in the United
States of America or Monaco, as the case may be, to any other
address which is not a post office box or poste restante,
provided that any such change of address will only become
effective on the seventh business day after the delivery of such
written notice to the other parties.
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12.3. Any notice given and any payment made by any party to all or any
of the others ("the addressees") which:
12.3.1. is delivered by hand or, in the case of a notice,
transmitted by telefacsimile during the normal business
hours of the addressees at the addressees' address at the
relevant time shall be rebuttably presumed to have been
received by the addressees on the first business day after
the date of such delivery or transmission, as the case may
be;
12.3.2. is delivered by courier to the addressees' address at the
relevant time shall be rebuttably presumed to have been
received by the addressees on the third business day after
the date that it is handed to the courier service.
12.4. Notwithstanding anything to the contrary herein contained, a
written notice or communication actually received by an
addressee shall be regarded as an adequate written notice or
communication to it notwithstanding that it was not sent to
or delivered at its chosen address.
13. GENERAL
13.1. This agreement constitutes the sole record of the agreement
between the parties in regard to the subject matter hereof.
13.2. None of the parties shall be bound by any representation,
warranty, promise or the like not recorded in this agreement.
13.3. No addition to or variation or agreed cancellation or novation of
this agreement shall be of any force or effect unless in writing
and signed by or on behalf of the parties.
13.4. Any indulgence which any of the parties may grant to the others
in terms of or pursuant to this agreement shall neither
constitute a waiver of any of the rights of the party which
granted such indulgence nor a novation hereof.
13.5. Nothing in this clause 13 limits or excludes the liability for
fraud.
Page 17
14. BREACH
Subject to 9.2 and 9.3, should any of the parties ("defaulting party")
commit a material breach of any of the material provisions of this
agreement and fail to remedy such breach within 30 (thirty) days (or
such longer period as may be reasonably required to remedy such
breach) after receiving written notice from any of the other parties
("aggrieved party") to do so, then the aggrieved party shall be
entitled, without prejudice to the aggrieved party's other rights in
law, to claim specific performance of all of the defaulting party's
obligations, without prejudice to the aggrieved party's rights to
claim damages.
15. CONFIDENTIALITY
Each of the parties undertakes to keep confidential and to endeavour
to ensure that each of their respective employees, executives and
representatives keeps confidential any information relating to the
provisions of this agreement save to the extent to which any such
information is in the public domain and/or is obtained from another
lawful source and/or is required to be discharged and/or published to
comply with any rules, regulations, requirements or directions of any
statutory body and/or stock exchange.
16. SUBSTITUTION
The purchaser shall be entitled to nominate in writing any third party
or third parties to be the buyer/s of the whole or any portion of the
sale shares in lieu of the purchaser itself, provided however that the
purchaser itself shall remain responsible nevertheless to procure that
the purchase price and all of the other obligations of the purchaser
in terms of this agreement are discharged.
17. BOARD COMPOSITION, APPOINTMENT OF MANAGING DIRECTOR, THE FIRST LOAN
AND THE SECOND LOAN, AND SUBSIDIARIES
17.1. The parties shall co-operate in procuring that within 60 (sixty)
business days after the closing date, ▇▇ ▇▇▇▇▇▇ Steynberg shall
be appointed to the board of directors of the purchaser as a non-
executive director and ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ("Carel") shall be
invited to be an observer at meetings of the board of directors
of the purchaser. In addition, the parties shall co-operate in
procuring that that a company is formed known as Trinity Learning
International (or a similar name) ("Trinity International") and
that Trinity International makes a reasonable and commensurate
offer to:
Page 18
17.1.1. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ to employ him as the chief executive
officer of Trinity International; and
17.1.2. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ to employ him as an executive of Trinity
International.
17.2. The purchaser shall procure that the bank guarantees are issued
within 30 (thirty) business days after the closing date in order
to cause the release of the security which has been furnished by
Irca to Standard Bank ; provided that prior to the issue of the
bank guarantees, the purchaser receives written confirmation from
Standard Bank acceptable to it confirming that all security held
by it in respect of Irca shall be released upon the issue of the
bank guarantees and the delivery thereof to Standard Bank.
17.3. The parties shall procure that the seller and the purchaser shall
be each entitled to appoint an equal number of directors to the
board of directors of the company with effect from the closing
date.
17.4 The purchaser and the company record and agree that the loan
shall be lent and advanced free of interest by the purchaser to
the company as follows:
17.4.1. within 5 (five) business days of the closing date the loan
shall be deposited by the purchaser into a bank account
("the bank account") to be held therein on behalf of the
company;
17.4.2. the amount of the loan shall remain deposited in the bank
account save as expressly otherwise provided in this
agreement; and
17.4.3. withdrawals from the bank account may only be implemented in
accordance with the following :
17.4.3.1. any such withdrawal may only be implemented pursuant to
a resolution passed by the board of directors of the
company; and
17.4.3.2. any such withdrawal resolution shall only be valid if
at least one director appointed by the seller and at
least one director appointed by the purchaser vote in
favour of such resolution;
17.4.4. the loan shall be repayable in full by no later than 31
December 2005;
Page 19
17.4.5. the loan shall be utilized by the company to fund Trinity
International pursuant to a business plan approved by the
seller and purchaser in writing, which plan shall be
completed within 45 (forty five) business days after the
signature date and which shall relate primarily to the
international expansion of of the subsidiary.
17.5. The company agrees that it shall not exercise the first option
and/or the second option until such time as the average of the
closing price per share of the purchaser on the stock exchange
reported for 10 (ten) consecutive business days equals or exceeds
US$2,00 (two United States Dollars) per share.
17.6. It is recorded that the purchaser presently only has ordinary
shares of no par value in its issued share capital. Accordingly
it is recorded and agreed that if the ordinary shares in the
purchaser are consolidated or subdivided at any time-
17.6.1. the applicable numbers of such shares in the purchaser for
the purposes of this agreement; and
17.6.2. the applicable closing price per share of the purchaser on
the stock exchange for the purposes of this agreement,
shall be adjusted accordingly and if any disagreement occurs
in relation to such adjustment, the result of the adjustment
shall be certified correct by the purchaser's auditors at the
relevant time and the decision of such auditors, acting as
experts and not as arbitrators, shall be final and binding on the
parties in the absence of any manifest error in calculation.
18. LEGENDS
The seller understands that the convertible note, the shares issuable
upon conversion of the convertible note and any securities issued in
respect thereof or exchange therefor, may bear one or all of the
following legends:
18.1. "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION WITHOUT AN EXEMPTION UNDER
THE SECURITIES ACT OR AN OPINION OF LEGAL COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED"; and/or
Page 20
18.2. any legend required by the securities laws of any jurisdiction to
the extent such laws are applicable to the securities represented
by the instrument so legended.
19. DEEMED SALE
19.1. If an event of default as defined in section 8 of the first
convertible note occurs, the purchaser shall be deemed to have
sold the sale shares to the seller for cash at their par value
("the deemed offer purchase consideration") on the day
immediately preceding the date upon which the aforementioned
event of default occurs ("the deemed sale date").
19.2. As security for the due performance of the purchaser's
obligations to the seller in terms of 19.1 above, the purchaser
agrees to pledge the sale shares to the seller pursuant to the
deed of pledge attached hereto as Appendix E which deed of pledge
shall be signed and executed by the purchaser and the seller
contemporaneously with this agreement on the basis that the sale
shares as pledged shall be delivered in negotiable form to the
escrow agent as contemplated in 7.1.1 and remain in escrow in
terms of this agreement and the escrow agreement for the
purchaser as owner and the seller as pledgee.
19.3. All certificates in respect of the sale shares shall remain in
the possession of the escrow agent save as expressly otherwise
provided in this agreement and the escrow agreement.
19.4. Subject to the provisions of the escrow agreement, the seller and
the purchaser agree and shall procure that the escrow agent may
not release the share certificates in respect of the sale shares
unless:
19.4.1. a written notice, signed by the seller and the purchaser
addressed to the escrow agent, directs the escrow agent to
release the share certificates in respect of the sale shares
in negotiable form to the person specified in the notice;
19.4.2. delivery is required to give effect to the terms of this
agreement, in which event the seller and the purchaser shall
be obliged to give the notice referred to in 19.4.1 to the
escrow agent,
or unless an order from a court of competent jurisdiction or
award from an arbitral authority instructs the escrow agent as to
how the sale shares should be disbursed.
Page 21
19.5. The seller and the purchaser shall procure that the escrow agent
shall, as provided in 19.4, release the share certificates in
respect of the sale shares in negotiable form to the seller
within 10 (ten) business days after the deemed sale date against
cash payment of the deemed offer purchase consideration.
20. COSTS
Each of the parties shall bear and pay their own costs of and incidental to
the negotiation, drawing and conclusion of this agreement, provided however
that any duty payable with respect to the registration of the transfer of
the sale shares pursuant to this agreement shall be borne and paid by the
purchaser. The costs payable to the escrow agent for their services, which
costs are referred to in the escrow agreement, shall be borne and paid
equally by the seller and the purchaser. In addition, the seller and the
purchaser shall be jointly and severally liable in favour of the escrow
agent for such costs.
21. CANCELLATION OF CERTAIN DOCUMENTS
21.1. The parties agree that the Definitive Agreement concluded by and
between the parties and signed by the purchaser on 17 September
2003 the seller and the company on 18 September 2003 is upon the
signature date hereby cancelled and of no further force and
effect.
21.2. The seller and the purchaser agree that the following documents
are upon the signature date hereby cancelled and of no further
force and effect-
21.2.1. the convertible notes signed by the purchaser on 17
September 2003 and by the seller on 18 September 2003;
21.2.2. the Deed of Pledge concluded by and between the purchaser
and the seller and signed by the purchaser on 17 September
2003 and by the seller on 18 September 2003.
21.3. The execution of this agreement, the convertible notes and the
Deed of Pledge (referred to in 19.2) shall respectively
substitute and replace the documents referred to in 21.1 and 21.2
above.
Page 22
SIGNED at on 2003
AS WITNESSES: For: TRINITY LEARNING CORPORATION
1_______________________________
2_______________________________ _________________________________
who warrants being duly authorised
hereto
SIGNED at on 2003
AS WITNESSES: For: MUSCA HOLDING LIMITED
1_______________________________
2_______________________________ _________________________________
who warrants being duly authorised
hereto
SIGNED at on 2003
AS WITNESSES: For: DANLAS LIMITED
1_______________________________
2_______________________________ _________________________________
who warrants being duly authorised
hereto
APPENDICES A, A1 AND A2
THE CONVERTIBLE NOTES
APPENDIX B
THE ESCROW AGREEMENT
APPENDIX C
THE WARRANTIES IN FAVOUR OF THE PURCHASER
APPENDIX D
THE WARRANTIES IN FAVOUR OF THE SELLER
APPENDIX E
DEED OF PLEDGE
DEFINITIVE AGREEMENT
between
Musca Holding Limited
Trinity Learning Corporation
and
Danlas Limited
▇▇ ▇▇▇▇▇ ATTORNEYS, NOTARIES & CONVEYANCERS
Kentgate, ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇ ▇▇▇▇ Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
Reference: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇