DEED OF SUBORDINATION

DATED 2017

BETWEEN

JUNAID MOHAMED SALEH AND

SALEH MOHAMED SALEH SAID BAWAZIR
(JOINTLY AS THE “SHAREHOLDERS”)

AND

EMMERDALE LIMITED
(THE “COMPANY”)

AND

BANK OF AFRICA KENYA LIMITED

(“THE BANK”)

Drawn By

Sichangi Partners Advocates

Mombasa Office
Links Plaza, 3rd Floor
Links Road,Nyali
P.O.Box 41287-80100
MOMBASA.
nyali@sichangi.com
www.sichangi.com
(Our Ref:BASEL/12499/75/C/17)

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 DEED OF SUBORDINATION

This Agreement is made the .......................day of.................................Two Thousand and

Seventeen BETWEEN:

1. SALEH MOHAMED SALEH SAID BAWAZIR and JUNAID MOHAMED SALEH of

Post Office Box Number 738-80100, Mombasa (hereinafter jointly called the
“Shareholders” and singly as “Shareholder” which expression shall, unless the
context otherwise requires, include the respective Shareholders’ personal
representatives and permitted assigns);

2. EMMERDALE LIMITED, a limited liability company incorporated in Kenya under

Certificate of Registration Number C.100839 of Post Office Box Number 738-80100,
Mombasa (hereinafter called the "Company" which expression shall, where the context
so requires, include the Company's successors in title and permitted assigns); and

3. BANK OF AFRICA KENYA LIMITED, a banking company incorporated in Kenya

with its registered office at Reinsurance Plaza, Taifa Road of Post Office Box Number
69562-00400, Nairobi (hereinafter called the “Bank” which expression shall, where the
context so requires, include the Bank's successors in title and assigns (whether
immediate or derivative).

WHEREAS:

(A) The Company is indebted to the Shareholders as at 28th February 2017 in the sum of
Kshs. 77,111,052.84 having been advanced loans or any financial facilities or other
accommodation by the Shareholders from time to time in the past (the “Present
Debt”).

(B) From time to time there will be other monies and liabilities due and owing by the
Company to the Shareholders (whether actual or contingent) including, without
limitation, interest thereon which together with the Present Debt shall hereinafter
collectively be called the “Shareholders’ Debts").

(C) The Bank has at the request of the Company and the Shareholders agreed not to call
in or require the immediate repayment of the existing indebtedness of the Company
and to continue to make available and provide certain banking facilities to the
Borrower in an aggregate principal amount of up to Kenya Shillings Twelve
Million Six Hundred Thousand (Kshs 12,600,000/-) or equivalent in whatever
currency denominated (together the “Facility”) in the terms of a letter of offer
dated 18th May, 2017 and referenced BW/EL/C/17/CrD-88, as may be amended,
varied or supplemented from time to time (hereinafter referred to as the “Facility
Letter”) and the documents of security more particularly referred to in the Facility
Letter (together the “Securities”).

(D) The Facility together with all monies and liabilities due owing or incurred (whether
actual or contingent) and whether comprising principal monies interest and/or
other monies and liabilities covenanted to be paid and discharged under the Facility
Letter and/or the Securities and/or otherwise howsoever by the Company to the
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 Bank from time to time shall hereinafter collectively be called the “Bank Debts”.

(E) The Shareholders have agreed to subordinate the Shareholders’ Debts to the Bank
Debts in the manner and to the extent hereinafter provided.

NOW IT IS HEREBY AGREED AND DECLARED as follows: -

1. Interpretation

1.1 In this Agreement, unless the context otherwise requires, reference to: -

1.1.1 words denoting the singular number only shall include the plural number also
and vice versa and words importing the masculine gender includes the feminine
gender and neuter and vice versa;

1.1.2 clauses sub-clauses sections and the schedule shall be construed as references
to clauses sub-clauses and sections of and the schedule to this Agreement;

1.1.3 the expression "person" shall include any legal or natural person partnership
trust company joint venture agency government or local authority department
or other body (whether corporate or unincorporate);

1.1.4 any statute or any provision of any statute shall be deemed to refer to any
statutory modification or re-enactment thereof and to any statutory instrument
order or regulation made thereunder or under any such re-enactment;

1.1.5 indemnifying any person against any circumstance includes indemnifying and
keeping that person harmless from and against all actions claims and
proceedings from time to time made against that person and all loss or damage
and all payments costs and expenses made or incurred by that person as a
consequence of or which would not have arisen but for that circumstance; and

1.1.6 the word "tax" shall be construed so as to include any tax levy impost
assessment duty or other charge of a similar nature (including, without
limitation, value added tax stamp, duty and any penalty or interest payable in
connection with any failure to pay or any delay in paying any of the same) and
"taxation" shall be construed accordingly and the expression "competent taxing
authority" means, in respect of any state or administrative division thereof, any
governmental authority monetary agency or central bank having power to
collect or levy tax.

1.2 Headings to sections are for convenience only and shall not affect the construction or
interpretation of this Agreement.

1.3 In this Agreement any reference to any document means that document as is
supplemented amended or varied from time to time between the parties thereto in
accordance with the terms (if applicable) hereof and thereof.

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2 Subordination

2.1 For the consideration referred to in Recital C above the Shareholders and the Company
hereby covenant and agree with each other and with the Bank that the Shareholders’
Debts shall be postponed and/or subordinated to the Bank Debts and shall be payable
or repayable only if and when the Bank confirms in writing to the Company and the
Shareholders that the Bank Debts have been paid or discharged in full and that the
Company has no further obligations to the Bank, actual or contingent, in respect of or
in connection with the Facility, and in no other circumstances.

2.2 The Shareholders agrees that no payment of the Shareholders’ Debts or any part
thereof shall be made by the Company to the Shareholders (or any of them) until all
the Bank Debts are paid to the Bank in full and no further amounts are or will become
owing by the Company to the Bank for any reason whatsoever.

2.3 The Shareholders covenants with the Bank that should the Company in fact make any
payment of the Shareholders’ Debts to the Shareholders (or any of them) at any time
prior to the full satisfaction of the Bank Debts, the Shareholders shall forthwith pay
such amount in full to the Bank without demand.

2.4 The Shareholders hereby covenant with the Bank that the Shareholders will not: -

2.4.1 without the prior written consent of the Bank agree to any change or
amendment to any of the provisions of this Agreement or of any document
evidencing or providing for the Shareholders’ Debts;

2.4.2 accept claim or have the benefit of any reduction, payment, repayment,
novation, satisfaction or extinguishment of or distribution or security in respect
of the Shareholders’ Debts (or any part thereof);

2.4.3 purport to set off the Shareholders’ Debts (or part thereof) against any debt or
liability now or hereafter due or owing from the Shareholders to the Company;
or

2.4.4 assign charge or dispose of the benefit of the Shareholders’ Debts (or any part
thereof) or any interest therein.

2.5 For the same consideration aforesaid, the Company hereby covenants with the Bank
that the Company will not: -

2.5.1 without the prior written consent of the Bank agree to any change or
amendment to any of the provisions of this Agreement or of any document
evidencing or providing for the Shareholders’ Debts (or any part thereof);

2.5.2 make any reduction payment, repayment, novation, satisfaction or

extinguishment of nor make any distribution in respect of the Shareholders’
Debts (or any part thereof); or

2.5.3 grant any security in respect of the Shareholders’ Debts (or any part thereof).

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2.6 The arrangements provided for in this clause shall not be affected by the liquidation of
the Shareholders and/or the Company and neither the Shareholders’ Debts nor any
part thereof shall be an obligation of the Company provable or payable in the
Company’s liquidation (and the Shareholders agree that the Shareholders will not
lodge any claim or proof in respect thereof in any liquidation of the Company) unless
and until all the Bank Debts have been paid or discharged in full and the Company has
no further obligations to the Bank (actual or contingent) under or in connection with
the Facility.

2.7 Without prejudice to the preceding provisions of this clause, the Shareholders hereby
covenant with the Company and the Bank that if, whether in the liquidation of the
Company or otherwise (and notwithstanding the foregoing provisions of this clause),
any payment is made in respect of the Shareholders’ Debts or any part thereof before
all the Bank Debts (actual or contingent) have been paid or discharged in full and the
Company has no further obligation to the Bank, actual or contingent, under or in
connection with the Facility, the amount so paid shall be received and held in a
separate account by the Shareholders upon trust for the Company and shall be paid
over to the Company (or its liquidator) forthwith upon receipt.

2.8 The Shareholders (if the Shareholders would otherwise have the right hereunder or
otherwise) shall not require nor be entitled to enforce or require the enforcement of the
payment of any monies due to the Shareholders by the Company until the Bank shall
have received payment (which the Bank shall be entitled to retain) of all the Bank
Debts in full and no further monies shall be due to the Bank in respect of the Facility.

2.9 The Shareholders agree to execute such further deeds, documents or assignments and
do all such other acts or things as may be necessary to carry out the intent of this
Agreement and further undertake to procure the Company to record it in its books a
statement to the effect that payment of the Shareholders’ Debts has been postponed
and/or subordinated in accordance with the terms hereof.

2.10 For its part, the Company agrees to be bound by the terms hereof and to make no
payment or distribution whatsoever to the Shareholders contrary to the terms hereof
and to do every other act or thing necessary and appropriate to be done or performed
by the Company in order to carry out the terms hereof. The Company further agrees
that in the event of any breach of the terms hereof, the Bank Debts shall forthwith
become due and payable and any agreement by the Bank to make further advances or
grant other credit banking facilities to the Company shall be thereby terminated
automatically.

3 Miscellaneous Provisions

3.1 No failure or delay by the Bank in exercising any right or remedy shall operate as a
waiver thereof nor shall any single or partial exercise or waiver of any right or remedy
preclude its further exercise or the exercise of any other right or remedy.

3.2 Each of the provisions of this Agreement is severable and distinct from the others and
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 if at any time one or more of such provisions is or becomes invalid illegal or
unenforceable, the validity legality and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.

3.3 The rights powers and remedies provided in this Agreement are cumulative and are
not, nor are they to be construed as, exclusive of any rights powers and remedies
provided by law.

3.4 A certificate signed by an officer of the Bank as to the Bank Debts for the time being
shall, save in the case of manifest error, be binding and conclusive upon the Company
and the Shareholders.

3.5 The Bank shall have a full and unfettered right to assign the whole or any part of the
benefit of this Agreement free from any equities and the assignees and other
successors, whether immediate or derivative, of the Bank shall be entitled to enforce
and proceed upon this Agreement in the same manner as if named herein. This
Agreement shall remain in effect and be binding on the Company and the
Shareholders notwithstanding any amalgamation or merger that may be effected by
the Bank with any other person and notwithstanding the sale or transfer of all or any
part of the Bank’s undertaking and assets to another person whether the person with
which the Bank amalgamates or merges or the person to which the Bank transfers all
or any part of its undertaking and assets either on a reconstruction or sale or transfer as
aforesaid shall or shall not differ from the Bank in its objects character or constitution it
being the intent of the Company and the Shareholders that the provisions herein
contained shall remain valid and effectual in all respects in favour of the Bank and that
the benefit thereof and all rights conferred upon the Bank thereby may be assigned to
and enforced by any such person and proceeded on in the same manner to all intents
and purposes as if such person had been named herein instead of or in addition to the
Bank. The Bank shall be entitled to convey any information concerning the Company
and the Shareholders to any proposed assignee or other successor. Neither the
Company nor the Shareholders shall, without the prior written consent of the Bank
first having been obtained, assign or transfer any of its or (as the case may be) his
respective rights and obligations hereunder to any person.

4 Representations and Warranties

4.1 Each Shareholder hereby represents and warrants to the Bank that as at the date
hereof: -

4.1.1 this Agreement constitutes valid and binding obligations on the part of the
Shareholders enforceable in accordance with its terms;

4.1.2 the entering into of this Agreement by the Shareholders on the terms set out
herein does not and will not infringe nor breach any agreement or undertaking
or obligation on the part of the Shareholders to any other person;

4.1.3 the Company is able to pay its debts within the meaning given to this
expression by Companies Act no 17 of 2015; and

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 4.1.4 no petition has been presented or resolution passed for winding up the
Company and the Shareholders know of no circumstances that may lead to
such petition or resolution.

4.2 The representations and warranties in clause 4.1.1 and 4.1.2 above shall be deemed
repeated by each Shareholder on and as of each day this Agreement subsists.

5 Notices

5.1 Any notice or demand requiring to be made by any party hereunder may be given or
made in writing addressed to:

5.1.1 If to the Bank:

Bank of Africa Limited
Bank of Africa House
Karuna Close, Off Waiyaka Way
P.O. Box 69562-00400
Nairobi

5.1.2 If to the Shareholders:

Saleh Mohamed Saleh Said Bawazir, and
Junaid Mohamed Saleh
P. O. Box 738-80100
Mombasa

5.1.3 If to the Company

Emmerdale Limited
P. O. Box 738-80100
Mombasa

5.2 Any notice or demand given or made by one party hereto to another shall be deemed
made and served: -

5.2.1 When left and receipt acknowledged (in the case of the Bank) at its above
address and (in the case of the Shareholders and the Company) when left at
the registered or principal office of the Shareholders and/or the Company; or

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 5.2.2 Seven (7) days after posting to the Shareholders and/or the Company
provided that proof is given that the notice or demand was properly
addressed and adequately stamped and put into the post; or

5.2.3 Where sent by electronic mail to the Shareholders and/or Company’s

electronic mail address.

5.3 Each Shareholder hereby irrevocably designates, appoints and empowers the
Company to the fullest extent allowed by law to receive as the Shareholder’s
authorized agent for and on his behalf service by the Bank or any other party of any
notice demand request, certificate or other communication including the service of any
legal process in connection with this Agreement (hereinafter called a “Notice”) and
each Shareholder hereby further agrees that any such Notice shall be sufficiently
served on the Shareholder if served upon such agent.

6 Duration

The provisions of this Agreement shall continue in full force and effect until the Bank
Debts have been paid or satisfied in full and the Securities have been discharged by the
Bank.

7 Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the
Republic of Kenya and the parties submit to the exclusive jurisdiction of the Kenyan
courts.

IN WITNESS WHEREOF this Agreement has been duly executed by the parties hereto as of
the day and year first before written.

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Signed by the Shareholder the said )
SALEH MOHAMED SALEH )
SAID BAWAZIR )
in the presence of: - ) ………………………………………….
) SALEH MOHAMED SALEH SAID
) BAWAZIR
) I.D. /Passport No 29668067
) PIN………………………………………
)
)
)
Advocate )

CERTIFICATE

I HEREBY CERTIFY that the above-named Shareholder, SAID SALEH MOHAMED SALEH
SAID BAWAZIR, appeared before me on the day of ,
2017, and being known to me/identified by of
acknowledged the above signatures to be his and that
he had freely and voluntarily executed this Agreement and understood its contents.

-------------------------------------------------------------
SIGNATURE & DESIGNATION OF PERSON
CERTIFYING

Signed by the Shareholder, the said )

JUNAID MOHAMED SALEH )
in the presence of:- )………………………………………….
) JUNAID MOHAMED SALEH ) I.D./ Passport

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 No. 21611169
) PIN
)
)
)
Notary Public/Advocate )

CERTIFICATE

I HEREBY CERTIFY that the above-named Shareholder JUNAID MOHAMED SALEH

appeared before me on the day of , 2017, and being known
to me/identified by of
acknowledged the above signatures to be his and that he had freely and
voluntarily executed this Agreement and understood its contents.

-------------------------------------------------------------
SIGNATURE & DESIGNATION OF PERSON
CERTIFYING

SEALED with the common seal of )

EMMERDALE LIMITED ) Common seal
in the presence of: )
)
Director )
SALEH MOHAMED SALEH SAID BAWAZIR )
Signature: )
)
Director/Secretary )
JUNAID MOHAMED SALEH )
Signature: )
)
Before Me: )
)
Advocate )

CERTIFICATE
I HEREBY CERTIFY that and
both directors/a director and secretary of the Company
appeared before me on the day of , 2017, and being known
to me/identified by of
acknowledged the above signatures to be theirs and that they had freely and
voluntarily executed this Agreement and understood its contents.

-------------------------------------------------------------
SIGNATURE & DESIGNATION OF PERSON CERTIFYING

Signed by the duly authorized attorneys of )

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BANK OF AFRICA by virtue of a Powers of Attorney )
registered in the District Land Registry at Mombasa )
as Numbers .......................….and.......................................... )
and the Registry of Documents at Nairobi as )
Number ...............................and............................respectively )

in the presence of: )

)
)
Advocate )

CERTIFICATE

I HEREBY CERTIFY that the above-named duly constituted attorneys of the Bank appeared
before me on the ……………. day of …………………… 2017 and being known to me /being
identified by ………………………………………….) acknowledged the above signatures or
marks to be his/hers/theirs and that he/she/they have freely and voluntarily executed this
Agreement and understood its contents.

…………………………………………………..
SIGNATURE & DESIGNATION OF PERSON CERTIFYING

Drawn By:-
Sichangi Partners Advocates
Links Plaza, 3rd Floor
Links Road,Nyali
P.O.Box 41287-80100
Mombasa.
(Our Ref:BASEL/12499/75/C/17)

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