Republic of South Africa Companies Act, No 71 of 2008 MEMORANDUM OF INCORPORATION Name of company: Comair Limited Registration No.: 1967/006783/06 (the Company ) This Memorandum of Incorporation ( MOI ) was adopted by Special Resolution passed on [ ] 2012, a copy of which was filed, together with the notice of amendment, in substitution for the Company s existing MOI, consisting of the memorandum of association and the articles of association of the Company (which were the constitutional documents of the Company in terms of the Companies Act No. 61 of 1973). This MOI takes effect (in terms of section 16(9)(b)(i)) of the Companies Act) on the date of filing thereof, with the notice of amendment.
TABLE OF CONTENTS Clause number and description Page PART ONE: INTRODUCTION... 6 1. DEFINITIONS... 6 2. INTERPRETATION... 8 PART TWO: NATURE OF COMPANY... 9 3. JURISTIC PERSONALITY... 9 4. PUBLIC COMPANY... 9 5. POWERS AND CAPACITY OF THE COMPANY... 9 6. AMENDMENTS TO THE MOI... 10 7. RATIFICATION OF ULTRA VIRES ACTS... 11 8. RULES... 11 9. EXTENDED ACCOUNTABILITY REQUIREMENTS... 11 PART THREE: CAPITALISATION AND SECURITIES OF THE COMPANY... 11 10. SHARE CAPITAL AND VARIATION OF PREFERENCES, RIGHTS, LIMITATIONS AND OTHER TERMS... 11 11. RIGHTS AND PRIVILEGES ATTACHING TO "A" SHARES... 14 12. RIGHTS, PRIVILEGES AND RESTRICTIONS ATTACHED TO THE PREFERENCE SHARES... 17 13. AUTHORITY TO ISSUE SECURITIES AND OPTIONS TO SUBSCRIBE FOR SECURITIES... 19 14. DEBT INSTRUMENTS... 21 15. CAPITALISATION ISSUE... 21 16. SUBSCRIPTION FOR SHARES... 21 17. CERTIFICATED AND UNCERTIFICATED SECURITIES AND THE SECURITIES REGISTER... 22 18. REGISTRATION OF BENEFICIAL INTEREST... 24
19. LISTINGS ON OTHER STOCK EXCHANGES... 24 20. COMMISSION... 25 21. TRANSFER OF SECURITIES... 25 22. TRANSMISSION OF SECURITIES BY OPERATION OF LAW... 27 23. LIEN UPON SECURITIES... 28 24. ACQUISITION OF SHARES ISSUED BY THE COMPANY... 28 25. JOINT HOLDERS... 28 PART FOUR: SHAREHOLDERS... 29 26. SHAREHOLDERS RIGHT TO INFORMATION... 29 27. PROXIES... 29 28. RECORD DATE... 30 PART FIVE: SHAREHOLDERS MEETINGS, VOTES AND RESOLUTIONS... 31 29. REQUIREMENT TO HOLD A SHAREHOLDERS MEETING... 31 30. LOCATION OF SHAREHOLDERS MEETINGS... 33 31. ELECTRONIC PARTICIPATION IN SHAREHOLDERS MEETINGS... 33 32. NOTICE OF SHAREHOLDERS MEETINGS... 33 33. QUORUM FOR SHAREHOLDERS MEETINGS AND ADJOURNMENTS... 34 34. CHAIRPERSON OF SHAREHOLDERS MEETINGS... 36 35. VOTING AND SHAREHOLDERS RESOLUTIONS... 37 36. SHAREHOLDERS ACTING OTHER THAN AT A MEETING... 38 PART SIX: AUTHORITY OF THE BOARD, GENERAL POWERS AND DUTIES OF DIRECTORS... 38 37. AUTHORITY AND POWERS OF THE BOARD... 38 38. EXECUTIVE DIRECTORS... 39 39. BORROWING POWERS... 40
PART SEVEN: DIRECTORS AND OFFICERS... 40 40. COMPOSITION OF THE BOARD AND ELECTION OF DIRECTORS... 40 41. RETIREMENT OF DIRECTORS IN ROTATION... 42 42. CESSATION OF OFFICE AS DIRECTOR OR ALTERNATE DIRECTOR... 43 43. DIRECTORS MEETINGS... 45 44. DIRECTORS ACTING OTHER THAN AT MEETING... 46 45. REMUNERATION OF DIRECTORS AND ALTERNATE DIRECTORS AND MEMBERS OF BOARD COMMITTEES... 47 46. INDEMNIFICATION OF DIRECTORS... 47 47. FINANCIAL ASSISTANCE FOR DIRECTORS AND PRESCRIBED OFFICERS AND THEIR RELATED AND INTER-RELATED PARTIES... 49 48. BOARD COMMITTEES... 49 49. PERSONAL FINANCIAL INTERESTS OF DIRECTORS AND PRESCRIBED OFFICERS AND MEMBERS OF BOARD COMMITTEES... 50 PART EIGHT: GENERAL PROVISIONS... 53 50. PRESCRIBED OFFICERS... 53 51. COMPANY SECRETARY... 53 52. ACCOUNTING RECORDS AND FINANCIAL STATEMENTS... 54 53. DISTRIBUTIONS... 55 54. LOSS OF DOCUMENTS... 56 55. NOTICES... 57 56. ODD-LOT OFFERS... 59 57. RIGHT TO EXPROPRIATE SECURITIES... 60 58. REGISTER OF DISCLOSURES... 60 Annexure A Definitions in the Companies Act... 1
Annexure B Ineligible / disqualified in terms of section 69(7) and (8) of the Companies Act read with Regulation 39(3)... 1 Annexure C Prescribed methods of delivery in the Regulations... 1
PART ONE: INTRODUCTION 1. DEFINITIONS In this MOI, 1.1. words that are defined in the Companies Act (which are contained in Annexure A for easy reference but which do not form part of this MOI for purposes of interpretation) but not defined in this MOI will bear the same meaning in this as in the Companies Act read where necessary with definitions in the Listings Requirements. For ease of reading, such terms have been capitalised in this MOI; 1.2. unless the context otherwise requires 1.2.1. A Shares shall have the meaning ascribed to this term in clause 10.1.2 below; 1.2.2. BEE Act means the Broad-Based Black Economic Empowerment Act No. 3 of 2003, as amended from time to time; 1.2.3. BEE Codes means the Broad-Based Black Economic Empowerment Codes of Good Practice gazetted from time to time under the BEE Act in terms of Code 100 the Measurement of the Ownership Element of Broad-Based Black Economic Empowerment; 1.2.4. Board means the board of Directors of the Company from time to time or, if there is only one Director, then that Director; 1.2.5. Central Securities Depository has the meaning set out in section 1 of the Securities Services Act; 1.2.6. Certificated Securities shall have the meaning ascribed to this term in clause 17.1.1 hereof; 1.2.7. "Companies Act" means the Companies Act, No. 71 of 2008 and the Regulations promulgated thereunder; 1.2.8. "Company" means the Company as defined as such on the front page of this MOI; 1.2.9. "Deliver" means deliver in the manner in which the Company is entitled to give notice or deliver documents in accordance with clause 55 and the Companies Act, and shall, where permitted by the Companies Act and the Listings
Requirements of the JSE, include delivery of an abridged document together with instructions as to how the recipient may obtain an unabridged version; 1.2.10. "Effective Date" means the date on which the Act came into operation, namely 1 May 2011; 1.2.11. "Electronic Address" means in regard to Electronic Communication, any email address furnished to the Company by the Holder; 1.2.12. "Holders" means registered holders of Securities; 1.2.13. "Ineligible or Disqualified" means ineligible or disqualified as contemplated in the Companies Act (a list of which is in Annexure B for easy reference but which does not form part of this MOI for purposes of interpretation) or as contemplated in clause 42.1.2 which shall apply not only to Directors and Alternate Directors but also to members of Board committees and members of Audit committees and Prescribed Officers and the secretary of the Company; 1.2.14. "JSE" means the exchange operated by JSE Limited (Registration No. 2005/022939/06) (or any other name by which it may be known in the future) or its successor body; 1.2.15. "Listings Requirements" means the listings requirements of the JSE from time to time; 1.2.16. "MOI" or Memorandum of Incorporation means the memorandum of incorporation of the Company, being this document (and including any schedules hereto), as amended or replaced from time to time; 1.2.17. Ordinary Shares shall have the meaning ascribed to this term in clause 10.1.1 hereof; 1.2.18. Preference Shares shall have the meaning ascribed to this term in clause 10.1.3 below; 1.2.19. Regulations means regulations published pursuant to the Companies Act from time to time; 1.2.20. "Securities Services Act" means the Securities Services Act, No 36 of 2004, as amended and/or replaced from time to time; 1.2.21. SENS means the Securities Exchange News Service; 1.2.22. Shares means the shares in the share capital of the Company;
1.2.23. STRATE means Strate Limited, a company duly registered and incorporated with limited liability under the company laws of the Republic of South Africa under registration number 1998/02224/06, licensed as a Central Securities Depository; 1.2.24. "Uncertificated Securities" means securities as defined in the Securities Services Act which are by virtue of the Companies Act transferable without a written instrument and are not evidenced by a certificate; and 1.2.25. "Writing" or Written includes Electronic Communication but as regards any Holder entitled to vote, only to the extent that such Holder has notified the Company of an Electronic Address. 2. INTERPRETATION For the purposes of this MOI, the following rules of construction shall apply, unless the context indicates and/or requires otherwise - 2.1. references to Holders represented by proxy shall include Holders entitled to vote represented by an agent appointed under a general or special power of attorney; 2.2. references to Holders entitled to vote Present at a Meeting or acting in person shall include juristic persons represented by duly authorised representative or acting in the manner prescribed in the Companies Act; 2.3. any reference to "general meetings of the Company", "general meetings of members of the Company" and meetings of the Company will, for the purposes of clauses 11 and/or 12, as the case may be, be construed in accordance with the definition of "shareholders meetings" in the Companies Act; 2.4. the headings are for reference purposes only and shall not affect the interpretation of this MOI; 2.5. words in the singular number shall include the plural, and words in the plural number shall include the singular, words importing the masculine gender shall include the female gender, and words importing persons shall include created entities (corporate or not); 2.6. if any term is defined within the context of any particular clause in the MOI, the term so defined, unless it is clear from the clause in question that the term so defined has limited application to the relevant clause, shall bear the meaning ascribed to it for all purposes in terms of this MOI, notwithstanding that that term has not been defined in this interpretation provision;
2.7. save to the extent that item 4(4) of Schedule 5 of the Companies Act may permit this MOI to prevail, if the provisions of this MOI are in any way inconsistent with the provisions of the Companies Act, the provisions of the Companies Act shall prevail, and this MOI shall be read in all respects subject to the Companies Act; and 2.8. the rule of construction that a contract shall be interpreted against the party responsible for the drafting or preparation of the contract, shall not apply to this MOI. 2.9. When a particular number of Business Days is provided for between the happening of one event and another, the number of days must be calculated by 2.9.1. excluding the day on which the first such event occurs; 2.9.2. including the day on or by which the second event is to occur; and 2.9.3. excluding any public holiday, Saturday or Sunday that falls on or between the days contemplated in clauses 2.9.1 and 2.9.2 respectively. PART TWO: NATURE OF COMPANY 3. JURISTIC PERSONALITY The Company is a Pre-existing Company as defined in the Companies Act. As such, the Company continues to exist as a Public Company as if it had been incorporated and registered in terms of the Companies Act, as contemplated in Item 2 of Schedule 5 to the Companies Act. 4. PUBLIC COMPANY 4.1. The Company is a Profit Company. 4.2. The Shares and other Securities issued by the Company are freely transferable. [LR 10.2(a)] 4.3. The Company is entitled to offer its Shares and other Securities to the public. 4.4. The Company is not a Private Company, a State-Owned Company or a Personal Liability Company and, accordingly, the Company is classified as a Public Company in accordance with the provisions of section 8(2)(d) of the Companies Act. 5. POWERS AND CAPACITY OF THE COMPANY 5.1. Save as otherwise set out in this MOI, the Company has the powers and capacity of an Individual save to the extent that a juristic person is incapable of exercising any such power, or having any such capacity.
5.2. Notwithstanding the omission from this MOI of any provision to that effect, the Company may, subject to any limitation in clause 5.1, do anything which the Companies Act empowers a company to do. 6. AMENDMENTS TO THE MOI 6.1. Subject to the Listings Requirements, every provision of this MOI is capable of alteration or amendment in accordance with section 16(1)(a), 16(1)(c) and 152(6)(b) of the Companies Act. Accordingly, the provisions of section 15(2)(c) of the Companies Act shall not apply. [LR 10.5(d)] 6.2. The MOI may only be altered or amended - [LR 10.5 (d)] 6.2.1. in compliance with a court order on the basis set out in section 16(1)(a) read with section 16(4) of the Companies Act; 6.2.2. by way of a Special Resolution passed in accordance with section 16(1)(c) of the Companies Act; 6.2.3. by the Board in accordance with section 17(1) of the Companies Act; or 6.2.4. by the business rescue practitioner in accordance with section 152(6)(b) of the Companies Act. 6.3. The MOI may not be amended by the Board on the basis set out in section 16(1)(b) of the Companies Act, nor in accordance of any other Alterable Provision of the Companies Act that allows for a method for the alteration or amendment of the MOI by the Board other than those methods contemplated in clause 6.1, clause 6.2 or elsewhere in this MOI. [LR 10.5 (d)] 6.4. The Company shall publish a copy of any alteration made to this MOI by the Board in order to correct this MOI in accordance with section 17(1) of the Companies Act by placing a notice together with a copy of the amendment to this MOI or a copy of the amended MOI, as the case may be, on the Company s web site. The Company shall file a notice of the alteration in the manner prescribed by the Companies Act. 6.5. Subject to the Listings Requirements, any change to the name of the Company shall be affected by an amendment to this MOI by way of a Special Resolution, as contemplated in clause 6.2.2. [LR 10.5 (d) (vii)]
7. RATIFICATION OF ULTRA VIRES ACTS For so long as the Listings Requirements so require, no Special Resolution contemplated in sections 20(2) and 20(6) of the Companies Act shall be proposed to the Shareholders in the event that that such a resolution would lead to the ratification of an act that is contrary to the Listings Requirements, unless otherwise agreed by the JSE. [LR 10.3] 8. RULES The Board shall not have the power or authority to make, amend or repeal any Rules relating to the governance of the Company, as contemplated in sections 15(3) to (5) of the Companies Act. [LR 10.4] 9. EXTENDED ACCOUNTABILITY REQUIREMENTS The Company, being a Public Company, is required in terms of section 34(1) of the Companies Act to comply with the extended accountability requirements set out in Chapter 3 of the Companies Act. PART THREE: CAPITALISATION AND SECURITIES OF THE COMPANY 10. SHARE CAPITAL AND VARIATION OF PREFERENCES, RIGHTS, LIMITATIONS AND OTHER TERMS 10.1. The Company is authorised to issue the following numbers and classes of Shares (which includes Shares already issued at any time) 10.1.1. 1 000 000 000 (one billion) ordinary Shares with a par value of R0.01 (one cent) each ( Ordinary Shares ) of the same class, each such Ordinary Share shall rank pari passu with all other Ordinary Shares and shall entitle the holder thereof to [LR 10.5 (a)] 10.1.1.1. 1 (one) vote for each Ordinary Share held in respect of every matter, decided on a poll; [LR 10.5 (b)] 10.1.1.2. vote on any matter to be decided by the Shareholders at any Shareholders Meeting; [LR 10.5 (b)] 10.1.1.3. participate proportionally in any Distribution made by the Company; and 10.1.1.4. receive proportionally the net assets of the Company upon its liquidation;
10.1.2. 75 000 000 (seventy five million) A Shares with a par value of R0.01 (one cent) each (the A Shares ), having the rights set forth in clause 11; and 10.1.3. 1 000 000 (one million) cumulative redeemable preference shares with a par value of R0.01 (one cent) each (the "Preference Shares"), each having the rights set forth in clause 12. 10.2. The Board shall not have the power to amend the authorisation (including increasing or decreasing the number) and classification of shares (including determining rights and preferences) as contemplated in section 36(2)(b) or 36(3) of the Companies Act. 10.3. To the extent that the Company immediately before the Effective Date had authorised but unissued par value Shares in its capital of a class of which there are issued Shares, the unissued Shares of that class may be issued at par or at a premium or at a discount. 10.4. All Securities of a class shall rank pari passu in all respects. [LR 10.5(a)] 10.5. No preferences, rights, limitations, or other terms for the time being attached to any class of Securities of the Company nor any interests of that class of Securities may (unless otherwise provided by the terms of issue of the Securities of that class) whether or not the Company is being wound up, be varied in any manner: (a) without the sanction of a resolution passed in the same manner as a Special Resolution, at a separate meeting of the Holders of that class of Securities, in addition to any other consents (if any) required in terms of this MOI and/or the Companies Act; and (b) if there are any other class/es of Securities in issue, it has also been approved by the sanction of a resolution passed in the same manner as a Special Resolution of all of the Holders of such other class/es entitled to vote thereon, which resolution shall only be proposed after the Special Resolution referred to in (a) has been passed. The provisions of this MOI relating to Shareholders Meetings shall mutatis mutandis apply to any such separate meeting referred to in (a) except that [LR 10.5 (e)] 10.5.1. the necessary quorum shall be 3 (three) persons personally present in person or represented by proxy and holding at least 25% (twenty five percent) of the Voting Rights of the issued Securities of that class; and 10.5.2. if at any adjourned meeting of such Holders, the required quorum contemplated in clause 10.5.1 is not present, those Persons entitled to vote who are Present shall be a quorum. 10.6. The Holder of Securities, other than Ordinary Shares and any special Shares created for the purposes of black economic empowerment in terms of the BEE Act and the BEE Codes, shall not be entitled to vote of any resolution taken by the Company save as permitted in terms of clauses 11 and 12 or elsewhere in this MOI. In instances that such Shareholders
are permitted to vote at Shareholders Meetings, their votes may not carry any special rights or privilege and they shall be entitled to one vote for each Share that they hold, provided that their total voting right at such a Shareholders Meeting may exceed 24.99% (twenty four comma ninety nine percent) of the total voting rights of all Shareholders at such meeting. [LR 10.5(c)] 10.7. No further Securities ranking in priority to, or pari passu with, the existing class of any Preference Shares, shall be created without the sanction of a resolution passed in the same manner as a Special Resolution passed at a separate meeting of the Holders of that class of Preference Shares. [LR 10.5 (f)] 10.8. Save as otherwise contemplated in clause 12 below and notwithstanding the provisions of section 36(3) of the Companies Act, the Board will not have the power to 10.8.1. increase or decrease the number of authorised Shares of any class of Shares; 10.8.2. reclassify any classified Shares that have been authorised but not issued; 10.8.3. classify any unclassified Shares that have been authorised but not issued; or 10.8.4. determine the preferences, rights, limitations or other terms of Shares, which power shall be reserved for the Shareholders as contemplated in clause 10.9. 10.9. The Shareholders may, by amendment to this MOI passed by way of Special Resolution (as contemplated in clause 6.2.2) and in accordance with the Listings Requirements (where necessary) [LR 10.9 (c)] 10.9.1. increase or decrease the number of authorised Shares of any class of Shares; 10.9.2. reclassify any classified Shares that have been authorised but not issued; 10.9.3. classify any unclassified Shares that have been authorised but not issued; 10.9.4. determine the preferences, rights, limitations or other terms of Shares; 10.9.5. vary any preferences, rights, limitations and other terms attaching to any class of Shares; [LR 10.5 (d) (ii)] 10.9.6. create any class of Shares; [LR 10.5 (d) (i)] 10.9.7. convert of one class of Shares into one or more other classes; [LR 10.5 (d) (iii)] 10.9.8. increase the number of Securities of a class; or [LR 10.5 (d) (iv)]
10.9.9. consolidate or sub-divide any class of Securities. [LR 10.5 (d) (v) & (vi)] 10.10. No Shares may be authorised in respect of which the preferences, rights, limitations or any other terms of any class of Shares may be varied in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and 37(7) of the Companies Act. [LR 10.5 (g)] 11. RIGHTS AND PRIVILEGES ATTACHING TO "A" SHARES 11.1. The "A" Shares shall have a par value of R0,01 (one cent) each and shall rank pari passu with the Ordinary Shares in respect of voting, dividends and on a winding up, save that: 11.1.1. the "A" Shares shall not participate in dividends until the earlier of (a) the date on which the Hurdle Balance falls to 0 (zero) and (b) the first day after the 8 th (eighth) anniversary of their issue date (the "Final Date"), whereafter, in each case, the "A" Shares shall rank pari passu with the Ordinary Shares in all respects; 11.1.2. the "A" Shares shall not be transferable without the prior written consent of the Company and the Company shall not register any transfer thereof unless the Board has resolved that such transfer be approved; 11.1.3. the "A" Shares shall, subject to any agreement between the Holder thereof and the Company and subject to any call option in favour of the Company over the "A" Shares, be convertible into Ordinary Shares on a 1 (one) share for 1 (one) share basis at any time after the Final Date (or such earlier date as may be agreed between the Company and the Holder thereof); 11.1.4. the "A" Shares shall not be listed on any securities exchange; 11.1.5. in order to retain participant percentage holding, the Holder of the "A" Shares shall receive "A" Shares in the same ratio as the Holders of Ordinary Shares receive Ordinary Shares in the event of a capitalisation issue or the issue of scrip dividends and save as aforesaid no further "A" Shares shall be issued after the date of issue of the first of the "A" Shares without the prior consent of the JSE and the Shareholders; 11.1.6. in the event of a rights issue, the Holders of the "A" Shares shall be entitled to subscribe for Ordinary Shares in the same ratio as the Holders of Ordinary Shares are entitled to so subscribe; 11.1.7. the "A" Shares shall vote as a single class with the Ordinary Shares at all meetings of the Shareholders in respect of all resolutions of the Company save
for resolutions relating to the rights and privileges of the "A" Shares (in respect of which they will vote both at a separate class meeting and at a general meeting of the Company) such that the holders of the "A" Shares shall not be entitled to veto or approve any resolution that would otherwise have been passed or not by the required majority of votes, collectively, of the Holders of the Ordinary Shares and the "A" Shares (other than resolutions relating to the rights and privileges of the "A" Shares); and 11.1.8. the "A" Shares shall not be taken into account for purposes of categorising transactions under the Listings Requirements. 11.2. For purposes hereof: 11.2.1. "CPI" means the weighted average consumer price index, all items of the 12 (twelve) areas specified in the notice as notified by Statistics South Africa (with the average for 2,000 (two thousand) as a base which equals 100 (one hundred); 11.2.2. "Financial Year" means a financial year of the Company, presently being the period commencing on 1 July of each year and ending on 30 June of the succeeding year; 11.2.3. "Implementation Date" means the date of issue of the "A" Shares; 11.2.4. "Indexed" means in relation to any sum, that sum adjusted annually to take account of year-on-year changes in the CPI since the Implementation Date; and 11.2.5. "Hurdle Balance" means an amount calculated at the end of each Financial Year and at the Final Date in accordance with the following formula: Where: A is the Hurdle Balance; B is the Hurdle Balance as calculated at the end of the preceding Financial Year, and equal to R1,85 (one rand eighty five cents) for the Financial Year into which the Implementation Date falls; C is the Escalation Factor, being the greater of (a) 1 (one) and (b) an amount calculated in accordance with the following formula, namely C = PC G H where PC is the Escalation Factor as calculated at the end of the
preceding Financial Year, except for the Financial Year into which the Implementation Date falls, where PC will be equal to 1,1 (one comma one); D means the aggregate amounts of dividends and other Distributions made pursuant to the Companies Act in respect of each Ordinary Share during the period for which the calculation is being performed; If during any Financial Year prior to the Final Date, commencing in the Financial year ending on 30 June 2007, the Company's revenue from governmental or parastatal business (or any other business agreed to between the Company and the Holder of the "A" Shares) increases by R10,000,000.00 (ten million rand) (Indexed) over the corresponding revenue for the previous Financial year, then for such R10,000,000.00 (ten million rand) (Indexed), "G" shall be determined in accordance with the following formula: G = 0,005 (zero comma zero zero five) for the Financial Year immediately following such occurrence (and in the case of any part of a Financial Year, a pro rata portion of 0,005 (zero comma zero zero five) and for every R2,000,000.00 (two million rand) (Indexed) of revenue "G" shall increase by a further 0,001 (zero comma zero zero one) (and in the case of any part of a Financial Year, a pro rata portion of 0,001 (zero comma zero zero one)); If during any Financial Year during the currency of this Agreement, commencing in the Financial Year ending on 30 June 2007, the Company is awarded the licence to operate one or more additional route designations which licence was obtained pursuant to the Company strategy for that year, then for every such additional licence, "H" shall be determined in accordance with the following formula: H = 0,01 (zero comma zero one) for the Financial Year immediately following such occurrence (and in the case of any part of a Financial Year, a pro rata portion of 0,01 (zero comma zero one) for the first 5 (five) such licences, and for further licences H = 0,005 (zero comma zero zero five) for the Financial Year immediately following such occurrence ( and in the case of any part of a Financial Year, a pro rata portion of 0,005 (zero comma zero zero five). H will be equal to 0.01 (zero comma zero one) at every second anniversary of the Implementation Date should the Company (a) not identify any licence to be obtained pursuant to its strategy during the 2 (two) year period preceding such anniversary date and (b) not have identified at least 3
(three) licenses to be obtained pursuant to its strategy from the Implementation Date to such anniversary date. 12. RIGHTS, PRIVILEGES AND RESTRICTIONS ATTACHED TO THE PREFERENCE SHARES 12.1. The Preference Shares shall rank, as regards dividends and return of capital, prior to the Ordinary Shares and any other class of shares in the capital of the Company not ranking prior to or pari passu with the Preference Shares. Save as set out herein, the Preference Shares shall not be entitled to any participation in the profits or assets of the Company nor, on a winding-up, to any participation in any of the surplus assets of the Company. 12.2. The Preference Shares shall confer the right, prior to the provision for dividends on the Ordinary Shares and the provision for any dividend or any other class of shares not ranking prior to or pari passu with the Preference Shares, to receive out of the profits of the Company, available for distribution from time to time, a cumulative preferential cash dividend (the Preference Dividend"), provided that the right to receive payment of such dividend shall be conditional upon the company having (in the opinion of the Board) sufficient cash reserves available from which such Preference Dividends can be paid. 12.3. The Preference Dividend shall be calculated on a daily basis compounded monthly from the date on which the Preference Shares are subscribed for by the registered Holders thereof on the subscription price of R0.01 (one cent) per share plus any share premium thereon (less any portion thereof previously paid or distributed to the registered Holders of the Preference Shares), and shall be at the rate agreed to by the Company in writing at the date of issue of the Preference Shares. 12.4. The following terms shall apply to the Preference Shares on a winding-up of the Company- 12.4.1. the Preference Shares shall confer the right to the repayment of an amount equal to the aggregate subscription price of the Shares and arrears in the Preference Dividend (whether declared or not) calculated to the date of repayment); and 12.4.2. such repayment shall be in priority to any payment to the registered Holders of any other class of shares in the capital of the Company not ranking prior to or pari passu with the Preference Shares. 12.5. The registered Holders of the Preference Shares shall have the right to receive notice of and to attend any meeting of the Company but not be entitled to vote, either in person or by proxy, at any meeting of the Company by virtue of or in respect of the Preference Shares, unless any one or more of the following circumstances prevail at the date of the meeting [LR 10.5 (c)]; [LR10.5 (h)]
12.5.1. the Preference Dividend or any part thereof remains in arrear and unpaid after 3 (three) months from the date of declaration thereof; 12.5.2. any redemption or other payment due on account of the Preference Shares remains in arrears and unpaid after 3 (three) months from the due date therefore; 12.5.3. a resolution of the Company is proposed which directly affects the rights attached to the Preference Shares or the interests of the registered Holders thereof. The rights and privileges attaching to the Preference Shares shall not be regarded as being directly or adversely affected by the creation and issued by the Company of any further Shares of any class, unless those new shares rank as regards participation in assets or profits of the Company all or some respects in priority to or pari passu with the Preference Shares or a resolution for the winding-up of the Company or for the reduction of its capital; and 12.5.4. a resolution of the Company is proposed for the disposal of the whole or substantially the whole of the undertaking of the Company, or the whole or the greater part of the assets of the Company, which shall include a resolution of the Company for the disposal of the undertaking or assets of a subsidiary of the Company, if such undertaking or assets constitute the whole or substantially the whole of the undertaking or assets of the Company and all its subsidiaries considered as one entity for this purpose. 12.6. Each registered Holder of the Preference Shares entitled to vote to that proportion of the total votes in the Company which the amount of the nominal value of each Preference Share held by the Holder bears to the aggregate amount of the nominal value of all Shares entitled to be voted at such meeting. [LR 10.5 (c)] 12.7. Without in any way limiting or derogating from any other provisions of this clause 12.7.1. the terms of the Preference Shares may not be modified, altered, varied, added to or abrogated; 12.7.2. the share capital or stated capital of the Company may not be reduced (except for any reduction which does not involve a distribution of Shareholders or the redemption of Preference Shares originally issued as redeemable by the Company) if such repayment, distribution or capitalisation issue should have the effect of reducing the share capital or stated capital below the amount of capital required by the Company for payment on a winding-up to the registered Holders of the Preference Shares and any other shares ranking prior to or pari passu with the Preference Shares, provided that nothing herein contained shall in any
manner whatsoever be construed or interpreted as prohibiting the Company from exercising any other right conferred on it in terms of the MOI; 12.7.3. the share premium arising on the issue of the Preference Shares or nondistributable reserves of the Company may not be repaid or distributed and no capitalisation shares may be issued out of it; 12.7.4. no Shares in the capital of the Company ranking, as regards rights to dividends, or, on a winding-up, return of capital, in priority to or pari passu with the Preference Shares shall be created or issued, without the prior written consent of the Holders of the Preference Shares or the prior sanction of a resolution passed at a separate class meeting of the Holders of the Preference Shares in the same manner, mutatis mutandis, as a Special Resolution. 12.8. Subject to the provision of the Companies Act, the Company shall be obliged to redeem the Preference Shares at a par in full and without penalty, together with all Preference Dividends then due and unpaid at the instance of the registered Holders thereof. 12.9. There shall be paid on any Preference Shares redeemed all Preference Dividends (including any which are in arrear) accrued in respect of the same, down to the date fixed for the redemption thereof, and the Preference Dividends thereon shall cease to accrue from that date unless, upon surrender of the certificate in respect of such Preference Shares, payment of the redemption moneys shall be refused or not made by the Company. 12.10. The Company shall not be liable to a preference Shareholder for interest on any unclaimed redemption moneys. 13. AUTHORITY TO ISSUE SECURITIES AND OPTIONS TO SUBSCRIBE FOR SECURITIES 13.1. The Board shall not have the power to issue Shares or other Securities of the Company 13.1.1. unless such Shares or other Securities of the Company have been authorised in terms of this MOI; 13.1.2. without the approvals contemplated in clause 13.2 (other than an issue as contemplated in clause 14 and clause 16.1 (unless Shareholder approval is required in terms of the Listings Requirements); and 13.1.3. the approval of the JSE, where necessary. 13.2. As regards the issue
13.2.1. in terms of section 41 of the Companies Act, of Shares or other Securities convertible into Shares, or the grant of options contemplated in section 42 of the Companies Act, or the grant of any other rights exercisable for Securities of the Company, the Board shall not have the power to allot or issue same without the approval of a Special Resolution; [LR 10.1] 13.2.2. in terms of section 42 of the Companies Act, of options for the allotment or subscription of Shares or other Securities of the Company, the Board shall not have the power to issue same without the approval of an Ordinary Resolution; [LR 10.1] and 13.2.3. of Shares and other Securities of the Company, other than those contemplated in clause 13.2.1, the Board shall not have the power to issue or allot the same without the approval of an Ordinary Resolution. [LR 10.1] 13.3. In addition to the approvals required in terms of clause 13.2, all issues of Shares for cash and all issues of options and "convertible securities" (as defined in the Listings Requirements) granted or issued for cash must be in accordance with the Listings Requirements. [LR 10.9 (a)] 13.4. Any approvals contemplated in clause 13.2, subject to the Listings Requirements (as contemplated in clause 13.3) may be in the form of a general authority to the Board, whether conditional or unconditional, to allot and issue any Shares or other Securities of the Company in their discretion, or in the form of a specific authority in respect of any particular allotment or issue of any Shares or other Securities of the Company. Such authority shall endure for the period provided in the Ordinary Resolution or Special Resolution in question but may be revoked by Ordinary Resolution or Special Resolution, as the case may be, at any time. 13.5. Notwithstanding the provisions of clause 13.4, the Shareholders in Shareholders Meeting may authorise the Directors to issue unissued Securities, and/or grant options to subscribe for unissued Securities, as the Directors in their discretion deem fit, provided that such corporate action(s) has/have been approved by the JSE (where necessary) and are subject to the Listings Requirements (where necessary). [LR 10.1] 13.6. Notwithstanding the provisions of section 40(5) of the Companies Act, all Securities of the Company for which a listing is sought on the JSE must, unless otherwise required by the Companies Act, only be issued after the Company has received the consideration approved by the Board for the issuance of such Securities. [LR 10.2 (a)]
14. DEBT INSTRUMENTS The Board may authorise the Company to issue secured or unsecured debt instruments as set out in section 43(2) of the Companies Act, provided that the Board shall not be entitled to issue any debt instruments that grant the holders thereof any rights regarding attending and voting at general meetings and the appointment of Directors. The debt instrument may not confer on the holder thereof any right to receive any Shares or other Securities of the Company (whether by way of redemption or substitution of the debt instrument) without the approval of an Ordinary Resolution. The authority of the Board to authorise the Company to issue secured or unsecured debt instruments, as set out in section 43(2) of the Companies Act, is accordingly limited and restricted by this MOI as aforesaid. [LR 10.10] 15. CAPITALISATION ISSUE 15.1. The Board is authorised to approve the issuing of any authorised Shares as capitalisation shares, to issue Shares of one class as capitalisation shares in respect of Shares of another class, and to resolve to permit shareholders to elect to receive a cash payment in lieu of a capitalisation shares as set out in section 47(1) of the Companies Act. [LR 10.6]; [LR 10.7] 15.2. The Board may not resolve to offer a cash payment in lieu of awarding a capitalisation share, as contemplated in section 47(1)(c) of the Companies Act, unless the Board 15.2.1. has considered the Solvency and Liquidity Test, as required by section 46 of the Companies Act, on the assumption that every such Shareholder would elect to receive cash; and 15.2.2. is satisfied that the Company would satisfy the Solvency and Liquidity Test immediately upon completion of the Distribution. 15.3. If, on any capitalisation issue, the Shareholders would, but for the provisions of this clause 14, become entitled to fractions of Shares, the Board shall, subject to any contrary provision in the resolution authorising the capitalisation issue, be entitled to round down any fractional entitlement to an equity Security to the nearest whole number if it is less than half, and to round up to the nearest whole number if it is equal to or more than half. 16. SUBSCRIPTION FOR SHARES 16.1. Authorised but unissued equity Securities of a particular class in the Company shall be offered to the existing Holders of that class of equity Securities pro rata to the Voting Power of that Shareholder s Voting Rights of that class of equity Securities immediately before the offer was made (with a reasonable time allowed to subscribe), unless such equity Securities are to be issued [LR 10.1]
16.1.1. pursuant to the approval by the Shareholders, provided same has been approved by the JSE (where necessary); 16.1.2. as a capitalisation issue as contemplated in section 47 of the Companies Act, as more fully contemplated in section 39(1)(b)(i) and (ii) of the Companies Act, 16.1.3. for the purposes of the acquisition of assets (including another company); 16.1.4. for the purposes of an Amalgamation or Merger; 16.1.5. the equity Securities are to be issued in terms of option or conversion rights or as contemplated in section 40(5) to (7) of the Companies Act; and/or 16.1.6. for the purposes of an approved share incentive scheme, provided that no fraction of an equity Security may be issued, and accordingly any fractional entitlement to an equity Security shall be rounded down to the nearest whole number if it is less than half and shall be rounded up to the nearest whole number if it is equal to or more than half. 16.2. Save as provided for in clause 16.1 or except to the extent that any such right is specifically included as one of the preferences, rights or other terms upon which any class of equity Securities are issued, no Shareholder shall have any pre-emptive right or other similar preferential right to be offered or subscribe for any additional equity Securities issued by the Company. 17. CERTIFICATED AND UNCERTIFICATED SECURITIES AND THE SECURITIES REGISTER 17.1. The Securities issued by the Company may either be issued in 17.1.1. certificated form, being Securities evidenced by certificates ( Certificated Securities ); or 17.1.2. uncertificated form (being Uncertificated Securities), in which case the Company must not issue certificates evidencing or purporting to evidence title to those Securities, subject to section 49(6) of the Companies Act. 17.2. Except to the extent that the Companies Act expressly provides otherwise, the rights and obligations of the Holders are not different solely on the basis of their respective Securities being Certificated Securities or Uncertificated Securities, and any provision of this MOI and the Companies Act applies with respect to any Uncertificated Securities in the same manner as it applies to Certificated Securities.
17.3. The Company shall, as soon as reasonably practicable after issuing any Securities, enter or cause to be entered in its Securities Register, in respect of the class of Securities issued, the information referred to in section 50 of the Companies Act and any other applicable provision of the Companies Act and/or the Regulations. 17.4. In respect of Certificated Securities: 17.4.1. the Company shall establish (or cause to be established) and maintain (or cause to be maintained) a Securities Register in accordance with the provisions of the Companies Act and the Regulations and, to the extent that the form and manner of maintaining the Securities Register is not prescribed, the Board shall determine the form and manner thereof; 17.4.2. every certificate evidencing any Certificated Securities of the Company shall comply with the formalities and content prescribed by section 51 of the Companies Act and any other applicable provision of the Companies Act and/or the Regulations and may otherwise be in such form as the Board may determine from time to time; 17.4.3. the Company shall enter into its Securities Register the transfer of any Certificated Securities, which is effected in accordance with this MOI, and shall include in such entry the information required by section 51(5) of the Companies Act and any other applicable provision of the Companies Act and/or the Regulations; 17.4.4. each Holder of a Certificated Security shall be entitled to 1 (one) certificate for all of the Securities of a particular class registered in his name, or to several certificates, each for a part of such Securities; 17.4.5. every registered Holder shall be entitled on the initial issue or transfer of Securities to the Holder of the initial certificate/s free of charge, but for every subsequent certificate/s, the Board may make such reasonable charge as it may from time to time think fit; 17.4.6. if a certificate evidencing any Certificated Securities is defaced, lost or destroyed it may be replaced, on such terms as to evidence, indemnity (in respect of any loss of any nature which the Company many incur pursuant to the replacement thereof) and at such reasonable cost as the Directors think fit; and, in the event of the defacement, on the delivery of the old certificate; 17.4.7. the substitution or conversion of Certificated Securities to Uncertificated Securities shall occur in accordance to the Companies Act and/or the
Regulations, any applicable provision of the Securities Services Act and any applicable requirements or rules of the JSE, STRATE and the relevant Central Securities Depository; and 17.4.8. the Directors may, in their discretion, record in the Securities Register any Certificated Securities of the Company held by a trust and for whom such Securities are so held. 17.5. In respect of Uncertificated Securities 17.5.1. if the Company has issued Uncertificated Securities or has issued Securities that have ceased to be Certificated Securities (as contemplated in section 49(5) of the Companies Act), a record must be administered and maintained by a Central Securities Depository as the Uncertificated Securities Register, which 17.5.1.1. forms part of the Company s Securities Register; and 17.5.1.2. must contain, the details referred to in section 50(2)(b) of the Companies Act, read with the changes required by the context, or determined by the rules of the Central Securities Depository; 17.5.2. the provisions of sections 52 to 55 of the Companies Act shall apply to registration, transfer and substitution of and the liability relating to Uncertificated Securities and shall prevail in the case of a conflict between any provision of those sections and any other provision of the Companies Act, any other law, the common law, this MOI or any agreement; and 17.5.3. the substitution or conversion of Uncertificated Securities to Certificated Securities shall occur in accordance with the Companies Act and/or the Regulations, any applicable provision of the Securities Services Act and any applicable requirements or rules of the JSE, STRATE and the relevant Central Securities Depository. 18. REGISTRATION OF BENEFICIAL INTEREST The Company s issued Securities may be held by, and registered in the name of, one Person for the Beneficial Interest of another Person as set out in (and subject to) section 56 of the Companies Act. 19. LISTINGS ON OTHER STOCK EXCHANGES 19.1. The Company may seek listings on such stock exchanges as the Directors may consider appropriate from time to time.
19.2. For so long as the Securities of the Company are listed on any stock exchange in addition to the JSE, if the listing on the JSE is the primary listing and if the Company is obliged to obtain the approval of the JSE in regard to any matter, it shall be obliged also to obtain the consent at the same time of any other stock exchanges on which it is listed. 20. COMMISSION The Company may pay commission not exceeding 10% (ten per cent) of the subscription price at which Securities of the Company are issued to any Person, in consideration of him subscribing or agreeing to subscribe, whether absolutely or conditionally, for any Securities or of him procuring or agreeing to procure subscriptions, whether absolute or conditional, for any Securities. [LR 10.14] 21. TRANSFER OF SECURITIES 21.1. The Shares and other Securities issued by the Company are freely transferable, subject to compliance with the procedural requirements for transfer as contemplated in this clause 21. [LR 10.2(a)] 21.2. The transfer of ownership of Uncertificated Securities in the Uncertificated Securities Register may only be effected by - 21.2.1. by a Central Securities Depository; 21.2.2. on receipt of an instruction to transfer sent and properly authorised in terms of the rules of a Central Securities Depository or an order of a court; and 21.2.3. in accordance with section 53 of the Companies Act and the rules of the Central Securities Depository. 21.3. The transfer of ownership in any Uncertificated Securities must be affected by 21.3.1. debiting the account in the Uncertificated Securities Register from which the transfer is effected; and 21.3.2. crediting the account in the Uncertificated Securities Register to which the transfer is effected, in accordance with the rules of a Central Securities Depository. 21.4. Nothing in this MOI prejudices any power of a Central Securities Depository to effect a transfer to a Person to whom the right to any Uncertificated Securities of the Company has been transmitted by operation of law.
21.5. The transfer of ownership of Certificated Securities shall be implemented in accordance using the then common form of transfer. Every instrument of transfer shall be left at the transfer office of the Company at which it is presented for registration, accompanied by the certificate of the Securities to be transferred, and or such other evidence as the Company may require to prove the title of the transferor or his/her/its rights to transfer the Securities. 21.6. All authorities to sign transfer deeds granted by Holders for the purpose of transferring Securities that may be lodged, produced or exhibited with or to the Company at any of its transfer offices shall as between the Company and the grantor of such authorities, be taken and deemed to continue and remain in full force and effect, and the Company may allow the same to be acted upon until such time as express notice in writing of the revocation of the same shall have been given and lodged at the Company s transfer offices at which the authority was lodged, produced or exhibited. Even after the giving and lodging of such notices the Company shall be entitled to give effect to any instruments signed under the authority to sign, and certified by any officer of the Company, as being in order before the giving and lodging of such notice. [LR 10.2(b)] 21.7. The Company shall not enter into its Securities Register the transfer of any Certificated Securities, unless 21.7.1. the transfer is evidenced by a proper instrument of transfer that has been delivered to the Company which is signed by or on behalf of the transferor and the transferee, the form of which shall be the common form of transfer or such other form as determined by the Board from time to time, which has been delivered to the Company together with 21.7.1.1. such proof as the Board may require of the authority of the signatory/ies to that instrument of transfer; and 21.7.1.2. the original certificate (or duplicate certificate issued pursuant to clause 17.4.6) in respect of the Securities being transferred or, in the absence of such original or duplicate certificate, such other evidence as the Board may require to prove the title of the transferor or his right to transfer the Securities concerned; or 21.7.2. the transfer was effected by operation of law. 21.8. An instrument of transfer that complies with the provisions of clause 21.7 shall constitute a proper instrument of transfer for the purposes of section 51(6)(a) of the Companies Act. 21.9. The Board may not decline to register the transfer of any Certificated Securities in terms of a proper instrument of transfer except if and for so long as the transfer in question is not in