Disposal Of Remaining Interest In Grindstone Accelerator Proprietary Limited AFRICAN DAWN CAPITAL LIMITED Incorporated in the Republic of South Africa (Registration number: 1998/020520/06) Share code: ADW ISIN Code: ZAE000223194 (“Afdawn” or “the Company”) DISPOSAL OF REMAINING INTEREST IN GRINDSTONE ACCELERATOR PROPRIETARY LIMITED 1. THE DISPOSAL Shareholders are hereby advised that Afdawn has entered into a sale agreement (“Sale Agreement”) with Grindstone Accelerator Proprietary Limited (“Grindstone”), Thinkroom Consulting Proprietary Limited (“Purchaser”) and Knife Capital Proprietary Limited, in terms of which Afdawn will sell its entire shareholding in Grindstone, comprising 50% of the total issued share capital of Grindstone (“Sale Shares”) to the Purchaser, on the salient terms and conditions set out below (“Disposal”). 2. RATIONAL FOR THE DISPOSAL Afdawn has reached a settlement agreement with the South African Revenue Service (“SARS”) in December 2017, as announced on SENS on 15 December 2017. The proceeds of the Disposal will be used to settle part of this outstanding tax debt. 3. EFFECTIVE DATE The effective date of the Disposal will be the business day immediately preceding the date on which the conditions precedent to the Disposal, as set out in paragraph 5 below, is fulfilled or waived (to the extent applicable), which date is anticipated to be 15 January 2018 (“Effective Date”). 4. PURCHASE CONSIDERATION The total purchase consideration payable by the Purchaser for the Sale Shares is an amount of R1 750 000 (“Purchase Consideration”), payable in cash in three instalments as follows: - R750 000 on the Effective Date; - R500 000 on or before 26 June 2018; and - R500 000 on or before 1 December 2018. 5. CONDITIONS PRECEDENT The Disposal is subject to the fulfilment or, where applicable, waiver, of the following conditions precedent (“Conditions Precedent”), namely that by no later than 15 January 2018 (or such later date agreed in writing by the parties): - Afdawn and Grindstone conclude a written agreement in terms of which they agree the terms of repayment of the shareholder loan held by Afdawn against Grindstone; - Afdawn and Grindstone conclude a written agreement in terms of which Grindstone agrees to pay up to R375 000 to Afdawn in respect of historic advisory services; - Afdawn and the Purchaser conclude a written agreement in terms of which the Sale Shares are pledged by the Purchaser to Afdawn as security for payment of the Purchase Consideration; and - to the extent necessary, the shareholders and the board of directors of the parties have approved the entering into of the Sale Agreement and the other agreements referred to above. The Conditions Precedent are for the benefit of Afdawn and the Purchaser and may only be waived by both of them in writing. 6. FINANCIAL INFORMATION The value of 50% of Grindstone’s net liabilities amounts to R99 916, while 50% of the attributable loss after tax amounts to R126 952 for Grindstone’s most recent financial year ended 28 February 2017. The proceeds from the Disposal will be applied primarily to reduce Afdawn’s outstanding tax liability with SARS. 7. OTHER RELEVANT INFORMATION Afdawn has provided warranties to the Purchaser that are standard for a transaction of this nature. 8. CATEGORISATION The Disposal qualifies as a category 2 transaction for Afdawn in terms of the JSE Listings Requirements. Johannesburg 5 January 2018 Sponsor and Corporate Advisor: PSG Capital Proprietary Limited Date: 05/01/2018 05:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.