SALE OF SHARES AGREEMENT
among
XXXX XXXXX
(Xxxxx)
and
XXXXX XXXXXXX
(Andreas)
and
XXXXXXX XXXXXX
(Xxxxxx)
(collectively the sellers)
and
FIRST SOUTH AFRICAN HOLDINGS (PROPRIETARY) LIMITED
(Registration No. 95/03959/07)
(the purchaser)
and
FIRST SOUTH AFRICA CORP., LTD
(FSAC)
in respect of the entire issued share capital of
PIEMANS PANTRY (PROPRIETARY) LIMITED
(Registration No. 95/02034/07)
(the Company)
and
SURFS-UP INVESTMENTS (PROPRIETARY) LIMITED
(Registration No. 95/02046/07)
(Propco)
Table of Contents
1. Introduction
2. Status of this agreement
3. Suspensive conditions
4. Preparation of the February 1996 accounts
5. Sale of the shares
6. Risk in the shares
7. Purchase price
8. Adjustments to and manner of payment of the first
instalment
9. Delivery of the shares and other documents
10. Calculation, time and manner of payment of the second
instalment
11. Calculation, time and manner of payment of the third
instalment
12. Restrictions on disposal of FSAH B shares
13. Put option
14. Warranty by the purchaser
15. Escrow of sale shares
16. Confidentiality
17. Warranties
17.1 warranty regarding registration
17.2 warranties regarding capital structure and the
shares
17.3 warranties regarding financial position, assets and
liabilities
17.3.1 auditing and returns
17.3.2 change in financial position
17.3.3 capital expenditure
17.3.4 dividends
17.3.5 liabilities
17.3.6 assets
17.3.7 debtors
17.4 warranty regarding suretyships
17.5 warranties regarding the business of the Company
17.5.1 manner of carrying on business
17.5.2 goodwill and scope of business
17.5.3 contracts
17.5.4 intellectual property rights
17.5.5 laws, regulations, consents, licences and
permits
17.5.6 labour laws, regulations, determinations,
agreements and disputes
17.5.7 insurance
17.5.8 employment, leave, remuneration and pension
17.5.9 restraint of trade
17.5.10 resolutions
17.6 warranty regarding litigation
17.7 warranties regarding statutory requirements
17.8 warranties regarding books of account and minutes
17.9 warranties regarding taxation
17.9.1 definition
17.9.2 administration
17.9.3 balance sheet
17.9.4 deductible payments
17.9.5 stamp duty
17.9.6 tax avoidance and donations
17.10 environmental warranties
17.11 disclosure
18. Sale of business
19. Breach
20. Miscellaneous matters
20.1 postal address
20.2 address for service of legal documents
20.3 entire contract
20.4 no representations
20.5 variation, cancellation and waiver
20.6 cession
20.7 applicable law
20.8 jurisdiction
20.9 costs
20.10 indulgences
Schedule 1 - Heads of Agreement
Schedule 2 - Management agreement
Schedule 3 - Disclosure Schedule
1. Introduction
1.1 The Company and Propco are private companies
registered and incorporated according to the laws
of the Republic of South Africa.
1.2 The sellers own all of the issued shares of the
Company and Propco and have claims on loan account
against the Company and Propco. The Company
carries on business as a manufacturer, distributor
and retailer of frozen and chilled food. Propco
is the registered owner of Xxxxx 160 and 161
Boltonia Ext 1 Krugersdorp, from which the
business of the Company is conducted.
1.3 The purchaser is a South African company and is a
subsidiary of FSAC, a Bermuda company the shares
of which are listed on NASDAQ.
1.4 The parties entered into binding heads of
agreement on 22 February 1996, a copy of which is
annexed as Schedule 1, (the heads), pursuant to
which the sellers have agreed to sell and the
purchaser has agreed to purchase the entire issued
share capital of the Company and Propco.
1.5 The heads provide that they shall be amplified
into a full legal agreement on terms and
conditions normal in the context of a sale of
shares, and the parties accordingly wish to expand
the heads into a full legal agreement on the terms
and conditions set out below.
2. Status of this agreement
This agreement supersedes the heads with effect from its
date of signature by the last-signing of the parties,
(the signature date).
3. Suspensive conditions
3.1 This rights and obligations of the parties, (other
than those contained in this clause and in clauses
4, 16, 20 and 21) are subject to the fulfilment of
the following suspensive conditions (the
conditions) by no later than 31 May 1996 or such
other date as may be determined pursuant to 3.3,
(the fulfilment date):
3.1.1 a due diligence investigation to be
conducted by the purchaser into the
affairs of the Company and Propco
yielding results reasonably satisfactory
to the purchaser. Without limitation the
purchaser shall not be obliged to
declare itself satisfied with the
results of the due diligence
investigation if it is dissatisfied with
the nature and extent of encumbrances on
assets of the Company or Propco or with
the accrued leave entitlements of
employees of the Company;
3.1.2 completion of the audit and the
preparation of the audited financial
statements of the Company for the year
ended 29 February 1996 (the February
1996 accounts) in accordance with
clause4;
3.1.3 the consent of the Industrial
Development Corporation to the
transactions contemplated in this
agreement, in a form and substance
reasonably satisfactory to the purchaser
and
3.1.4 the conclusion of a management agreement
between Messrs. Welch, Morgan, the
purchaser and the Company substantially
in the form of the draft attached as
Schedule 2.
3.2 Each of the parties shall use its reasonable
endeavours to procure fulfilment of the
conditions.
3.3 The conditions are for the benefit of the
purchaser. The purchaser may, by written notice to
the sellers given no later than 31 May 1996, be
entitled to waive, or extend the period for, the
fulfilment of any of the conditions, provided that
the period shall not, save by agreement, be
extended beyond 30June 1996.
3.4 If any of the conditions fail (and fulfilment
thereof is not waived in terms of 3.3), the rights
and obligations of the parties, save for those
contained in this clause and in clauses 4, 16, 20
and 21, shall cease to be of any further force and
effect and the parties shall be restored as nearly
as may be possible to the positions in which they
would have been had this agreement not been
entered into. No party shall have any claim
against any other as a result of the failure of
the conditions, except for such claims, if any, as
may result from a breach of the provisions of this
clause.
3.5 The condition set out in 3.1.1 shall be deemed to
be fulfilled unless the due diligence
investigation reveals factors or circumstances not
disclosed to the purchaser in writing as at the
signature date, and which in the purchasers
reasonable opinion materially affect the value of
the Company.
4. Preparation of the February 1996 accounts
The sellers warrant that:-
4.1 the February 1996 accounts shall be prepared and
audited by Price Waterhouse:-
4.1.1 on a basis consistent with all prior
years;
4.1.2 in accordance with generally accepted
accounting practice and the Companies
Act 61 of 1973, as amended;
4.1.3 in such a way as to fairly and
accurately present the results of
operations of the business of the
Company for the period 1 March 1995 to
29 February 1996; and
4.2 the February 1996 accounts shall not be qualified
in any way by Price Waterhouse.
5. Sale of the shares
5.1 The sellers sell and assign and the purchaser
purchases and takes assignment, with effect from
1 March 1996, (the effective date), of:-
5.1.1 the entire issued share capital of the
Company, comprising 100 ordinary par
value shares of R1,00 each, (the
Pieman's sale shares);
5.1.2 the claims of the sellers on loan
account against the Company, (the
Piemans claims);
broken down by seller as follows:-
Seller No. of Piemans
sale shares
Xxxxx 45
Andreas 45
Xxxxxx 10
5.1.3 the entire issued share capital of
Propco, comprising 100 ordinary par
value shares of R1,00 each, (the Propco
sale shares); and
5.1.4 the claims of the sellers on loan
account against Propco;
broken down by seller as follows: -
Seller No. of Propco
sale shares
Xxxxx 45
Andreas 45
Xxxxxx 10
5.2 Notwithstanding the date on which this agreement
is signed, the sale will be deemed to have taken
effect on, and to have been with effect from, the
effective date.
5.3 All monies payable to the sellers pursuant to this
agreement shall be paid to the sellers in the
ratio that the numbers of their sale shares bear
to each other, as set out above. All loan accounts
shall be purchased at their face value plus
accumulated unpaid interest. The balance of the
purchase price shall be allocated to the Piemans
sale shares and the Propco sale shares in the
discretion of the purchaser.
5.4 The sellers shall not, from the signature date,
withdraw any amounts from their loan accounts with
either the Company or Propco unless they
simultaneously notify the purchaser in writing of
the amount so withdrawn. Any amount so withdrawn
and not repaid together with interest at 14% per
annum, shall be deducted from the cash portion of
the first instalment of the purchase price.
6. Risk in the shares
The risk in and benefit of the Piemans sale shares, the
Propco sale shares, the Propco claims and the Piemans
claims will be deemed to have passed to the purchaser
on the effective date.
7. Purchase price
7.1 The purchase price of the Piemans sale shares,
the Propco sale shares, the Propco claims and the
Piemans claims shall be the aggregate of the
following instalments, as adjusted pursuant to 8,
10 and 11-
7.1.1 an initial instalment of R24645000,
payable on the closing date (as defined
in 9) in accordance with 8, (the first
instalment);
7.1.2 a second instalment, payable in
accordance with 10, determined in
accordance with the formula
P2 = (4 x PTZ97 x 20%) x 1,01875
where
P2 is the value of the second instalment;
PTZ97 is the pre-tax profit of the Company
for its financial year ended 28 February 1997
as specified in the audited financial
statements of the Company for that financial
year, (the February 1997 accounts);
(the second instalment);
7.1.3 a third instalment, payable in
accordance with 11, determined in
accordance with the formula
P3 = (4 x PTZ98 x 20%) x 1,01875
where
P3 is the value of the third instalment;
PTZ98 is the pre-tax profit of the Company
for its financial year ended 28 February 1998
as specified in the audited financial
statements of the Company for that financial
year, (the February 1998 accounts), as
adjusted pursuant to 11.4;
(the third instalment).
8. Adjustments to and manner of payment of the first
instalment
8.1 The sellers warrant to the purchaser that:-
8.1.1 the February 1996 accounts will reflect
a pre-tax profit for that financial year
of not less than R8000000; and
8.1.2 the net asset value of the Company
derived from the February 1996 accounts
will exceed the net asset value of the
Company as at 28 February 1995, derived
from the audited financial statements of
the Company for the year ended 28
February 1995, (the February 1995
accounts) by not less than R4940000.
8.2 For the purposes of this agreement net asset
value shall mean total tangible assets (excluding
revaluations) less total liabilities.
8.3 In the event that the February 1996 accounts
reflect a pre-tax profit for that financial year
of less than R7600000 the value of the Company on
which the first instalment is calculated will be
reduced by R4,15 for every R1,00 by which the
actual pre-tax profit of the Company, as derived
from the February 1996 accounts, falls short of
R8000000. There shall be no reduction if the
pre-tax profit falls between R7600000 and
R8000000.
8.4 In the event of a breach of the warranty set out
in 8.1.2, the positive difference between R4940000
and the actual increase in the net asset value of
the Company between 28 February 1995 and 29
February 1996, as derived from the February 1995
accounts and the February 1996 accounts, shall be
deducted on a Rand for Rand basis from the value
of the first instalment, as reduced, (if at all)
pursuant to 8.3, and shall be set off against the
cash portion of that instalment referred to in
8.5.
8.5 The first instalment shall be paid on the closing
date, (as defined in 9) as follows:-
8.5.1 the purchaser will issue to the sellers
331579 B ordinary shares (FSAH B
shares) valued at $5,00 per share,
converted into Rand for the purposes of
this agreement at a fixed exchange rate
of R3,80 per US Dollar, giving a Rand
value of R6300001;
8.5.2 the balance of the first instalment,
reduced as contemplated in this clause8,
in cash, provided that if the value of
the first instalment after reductions
effected pursuant to 8.3 and 8.4 is less
than R6300001 the number of FSAH B
shares to be issued to the seller will
be reduced by one for every R19,00 or
part thereof by which the value of the
first instalment falls short of
R6300001.
9. Delivery of the shares and other documents
9.1 On the 3 June 1996, (the closing date)
representatives of each of the sellers and the
purchaser will meet at the offices of Price
Waterhouse, 00 Xxxxxxx Xxxx, Xxxxxxx, and:
9.1.1 the sellers will deliver to the purchaser:
9.1.1.1 share certificates in respect of the
Piemans sale shares and the Propco sale
shares, accompanied by share transfer
forms signed and dated that day by the
registered shareholders and blank as to
transferee;
9.1.1.2 certified copies of such shareholders
and/or directors resolutions, and such
other documents, as may be necessary -
9.1.1.2.1 to sanction the sale and transfer
of the Piemans sale shares and the
Propco sale shares to the
purchaser;
9.1.1.2.2 to appoint Xx Xxxxx Xxxxxxxxx as a
director of the Company;
9.1.1.2.3 to waive any pre-emptive or other
rights which any person may have in
relation to the Piemans sale shares
and the Propco sale shares;
9.1.1.2.4 to amend the articles of
association of the Company to allow
Mr Kabatznik and other directors of
the Company appointed by the
purchaser from time to time as many
votes, at each directors meeting,
as all of the other directors of
the Company together, plus one
vote; and
9.1.2 the purchaser will pay the first
instalment of the purchase price to the
seller in accordance with 8.
9.2 In the event that the purchaser fails to pay the
cash portion of the first instalment on the
closing date, the cash portion of the first
instalment shall bear interest from 4 June 1996 to
date of payment, (which shall be no later than 3
July 1996), both days inclusive.
9.3 On the closing date and at the premises the
sellers shall also place the purchaser in
possession of all books and records of the
Company, including, without limitation, the
memorandum and articles of association of the
Company, its certificate of incorporation, its
certificate to commence business and all
contracts, documents, books, tax records and any
other relevant records of the Company.
10. Calculation, time and manner of payment of the second
instalment
10.1 The second instalment will be paid as to 62,5% in
cash and as to 37,5% by the issue by the purchaser
to the sellers of FSAH B shares.
10.2 The aggregate number of FSAH B shares to be
issued by the purchaser to the sellers pursuant to
10.1 shall be determined by dividing 37,5% of the
value of the second instalment by the price of the
FSAH B shares which shall be determined as
follows:-
10.2.1 if profit before taxation of the Company for
the year ended 28 February 1997, as
determined by reference to the February 1997
accounts (the February 1997 profit) exceeds
R10000000 the FSAH "B" shares will be
allotted and issued at the lower of:-
10.2.1.1 R19,00 per share; and
10.2.1.2 a Rand price determined by multiplying
the US Dollar-denominated quoted price
of the NASDAQ listed shares of FSAC at
close of business on 28 February 1997 by
an exchange rate of US$1,00 = R3,80;
10.2.2 if the February 1997 profit is less than
R10000000 the number of FSAH B shares to be
issued by the purchaser to the sellers shall
be determined by reference to the price of
the FSAH B shares which for the purposes of
this sub-clause shall be the greater of:-
10.2.2.1 R19,00 per share; and
10.2.2.2 a Rand price determined by multiplying
the US Dollar denominated price of the
NASDAQ listed shares of FSAC at close of
business on 28 February 1997 by the
average between the spot buy and sell
rates of Rand for US Dollars quoted by
the Standard Bank of South Africa on 28
February 1997. In the event of any
dispute about these rates a certificate
of any branch or more senior manager of
The Standard Bank, whose designation it
shall not be necessary to prove shall be
proof of the rates until the contrary is
proved.
10.3 For purposes of determining the price at which the
FSAH B shares are to be issued pursuant to 10.2,
the February 1997 profit shall be augmented by up
to R400000 by any profit for the financial year
ended 29 February 1996, in excess of R8000000.
10.4 Payment of the second instalment shall be made on
31 May 1997 or within 14 days of the finalisation
of the February 1997 accounts and their signature
by the directors of the Company, (whichever date
is the later), by paying the cash portion in cash
and delivering to the sellers share certificates
evidencing the B shares to be issued to them.
The parties shall use all reasonable endeavours to
ensure that such accounts are finalised and signed
by the directors of the Company by no later than
17 May 1997.
10.5 Should payment of the second instalment of the
purchase price be delayed beyond 31 May 1997, the
cash portion of the second instalment shall bear
interest from 1 June 1997 to date of payment, both
days inclusive, at the call rate quoted by The
Standard Bank of South Africa Limited on amounts
equal to the cash portion of the purchase price,
as certified by any manager of that bank whose
designation it shall not be necessary to prove and
whose determination of the rate shall be proof
thereof until the contrary is proved.
11. Calculation, time and manner of payment of the third
instalment
11.1 The third instalment will be paid as to 62,5% in
cash and as to 37,5% by the issue by the purchaser
to the sellers of FSAH B ordinary shares.
11.2 The number of FSAH B ordinary shares to be
issued by the purchaser to the sellers pursuant to
11.1 shall be determined by dividing 37,5% of the
value of the third instalment by the price of the
FSAH B shares which shall be determined as
follows:-
11.2.1 if profit before taxation of the Company for
the year ended 28 February 1998, as
determined by reference to the February 1998
accounts, (the February 1998 profit),
exceeds the February 1997 profit by at least
20%, the FSAH B shares will be allotted and
issued at the lower of:-
11.2.1.1 R19,00 per share; and
11.2.1.2 a Rand price determined by multiplying
the US Dollar denominated quoted price
of the NASDAQ listed shares of FSAC at
close of business on 28 February 1998 by
an exchange rate of US$1,00 = R3,80;
11.2.2 if the February 1998 profits exceed the
February 1997 profits by more than 10% but
less than 20%, the FSAH B shares will be
allotted and issued at a price equal to the
greater of:-
11.2.2.1 R19,00 per share; and
11.2.2.2 a Rand price determined by multiplying
the US Dollar denominated price of the
NASDAQ listed shares of FSAC at close of
business on 28 February 1998 by the
average between the spot buy and sell
rates of Rand for US Dollars quoted by
the Standard Bank of South Africa on 28
February 1998, less a discount equal to
the percentage growth in the February
1998 profits over the February 1997
profits. In the event of any dispute
about the exchange rates a certificate
of any branch or more senior manager of
The Standard Bank, whose designation it
shall not be necessary to prove shall be
proof of the rates until the contrary is
proved;
11.2.3 if the February 1998 profits exceed the
February 1997 profits by 10% or less, the
FSAH B shares will be allotted and issued
at a price equal to the greater of:
11.2.3.1 R19,00 per share; and
11.2.3.2 a Rand price determined by multiplying
the US Dollar denominated price of the
NASDAQ listed shares of FSAC at close of
business on 28 February 1998 by the
average between the spot buy and sell
rates of Rand for US Dollars quoted by
the Standard Bank of South Africa on 28
February 1998. In the event of any
dispute about the exchange rates a
certificate of any branch or more senior
manager of The Standard Bank, whose
designation it shall not be necessary to
prove, shall be proof of the rates until
the contrary is proved.
11.3 Payment of the third instalment shall be made on
31 May 1998, or within 14 days of the finalisation
of the February 1998 accounts and their signature
by the directors of the Company, (whichever is the
later), by paying the cash portion in cash and
delivering to the sellers share certificates
evidencing the FSAH B shares to be issued. The
parties shall use all reasonable endeavours to
ensure that such accounts are finalised and signed
by the directors of the Company by no later than
17 May 1998.
11.4 Notwithstanding the provisions of this clause 11,
the pre-tax profit on which the third instalment
is based shall be reduced if the managing director
designate to be employed by the Company pursuant
to clause 4 of the management agreement is not
employed prior to 1 March 1997. The reduction
shall be an amount equal to the additional costs
that the Company would have incurred in
remunerating the managing director designate had
he been employed for the full 12 month period
ending on 28 February 1998. In addition, and for
the purposes of determining the price at which the
FSAH B shares are to be issued pursuant to 11.2,
the February 1998 profit shall be augmented by any
profit for the financial year ended 28February1997
in excess of R10000000.
11.5 Should payment of the third instalment of the
purchase price be delayed beyond 31 May 1998, the
cash portion of the third instalment shall bear
interest from 1 June 1998 to date of payment, both
days inclusive, at the call rate quoted by The
Standard Bank of South Africa Limited on amounts
equal to the cash portion of the purchase price,
as certified by any manager of that bank whose
designation it shall not be necessary to prove and
whose determination of the rate shall be proof
thereof until the contrary is proved.
12. Restrictions on disposal of FSAH B shares
12.1 The sellers undertake that they shall not dispose
of or attempt to dispose of, or cede, pledge,
assign or otherwise encumber any of the FSAH B
shares forming part of the purchase price prior to
30 June 1998, provided that, with the prior
written consent of the purchaser (which shall not
be unreasonably withheld) the sellers may
transfer, at cost price, certain of their shares
to other senior managers of the Company. Any such
transferee shall also be bound by the restrictions
in the first sentence of this 12.1 and in the
balance of this clause 12.
12.2 In addition, the sellers undertake that they shall
not dispose of or attempt to dispose of, or cede,
pledge, assign or otherwise encumber any of the
FSAH B shares allotted and issued to them at a
discount to market value, within 1 year from their
date of issue. For the purposes of this sub-clause
market value shall mean the the US Dollar
denominated price of the NASDAQ listed shares of
FSAC at close of business on the last day in
February of the year in which the shares were
allotted and issued, converted into Rand by
multiplying the dollar price by the average
between the spot buy and sell rates of Rand for US
Dollars quoted by the Standard Bank of South
Africa on the applicable last day of February. In
the event of any dispute about the exchange rates
a certificate of any branch or more senior manager
of The Standard Bank, whose designation it shall
not be necessary to prove shall be proof of the
rates until the contrary is proved.
12.3 Any sale in contravention of this clause shall be
void and the directors of the purchaser shall not
enter the name of the transferee in the share
register of the purchaser or otherwise recognise
any title of the purported purchaser of the
shares. In addition FSAC shall be entitled to
purchase the affected FSAH B shares from the
defaulting seller at par. The rights conferred on
FSAC and the obligations imposed on the sellers
shall not prejudice any other rights available to
the Company, FSAC, or the purchaser arising from
such breach.
13. Put option
13.1 FSAC undertakes to procure that a non-resident
third party, (the option grantor), will
undertake to purchase from the sellers all of the
FSAH B shares to be issued by the purchaser to
the sellers pursuant to this agreement, (the put
option).
13.2 The material terms of the put option will be the
following:-
13.2.1 it will only be exercisable when the sellers
become entitled to sell the FSAH B shares,
determined in accordance with 12;
13.2.2 the price at which the put option may be
exercised shall be the net price received by
the option grantor from the sale on the open
market in the United States of an equivalent
number of shares of FSAC. For this purpose
net price shall mean the price for which
the FSAC shares are sold less all costs
associated with the sale, including any
brokers commission;
13.2.3 although the put option may be exercised in
tranches each tranche shall comprise a
minimum of 100 shares;
13.2.4 for so long as South African exchange control
regulations prescribe that South African
residents shall repatriate foreign currency
to South Africa, the proceeds from any sale
of the option shares shall be payable to the
sellers in South Africa.
14. Warranty by the purchaser
14.1 The purchaser warrants to the sellers that should
the sellers validly exercise the put option prior
to 30 September 1998 in respect of any FSAH B
shares issued by the purchaser to the seller in
part payment of the first instalment, the xxxxx
Xxxx value of each FSAH B share so sold shall be
not less than R19,00. For this purpose xxxxx Xxxx
value shall mean the actual US Dollar denominated
price received by the option grantor from the sale
of the equivalent number of FSAC shares pursuant
to 13.2.2, converted into Rand by multiplying it
by the average between the spot buy and sell rates
of Rand for US Dollars quoted by The Standard Bank
of South Africa on that date. In the event of any
dispute about the exchange rates a certificate of
any branch or more senior manager of The Standard
Bank, whose designation it shall not be necessary
to prove, shall be proof of the rates until the
contrary is proved.
14.2 Should the xxxxx Xxxx value per share of each FSAH
B share sold in the circumstances prescribed in
14.1 be less than R19,00 the cash portion of the
first instalment of the purchase price shall be
deemed to have been increased by the difference
between R19,00 and the xxxxx Xxxx value per share
actually received, multiplied by the number of
FSAH B shares sold pursuant to the put option.
FSAH shall pay this amount to the sellers in cash
in Rand on demand.
15. Escrow of sale shares
15.1 As security only for the payment of the second and
third instalments, the purchaser shall deliver to
Xxxxxx Xxxxxxx Xxxxxx, to hold in escrow, the
share certificates to be issued by the Company to
the purchaser pursuant to registration of transfer
of the Piemans sale shares and the Propco sale
shares into the name of the purchaser, accompanied
by share transfer forms signed by the purchaser,
and blank as to date and transferee, (the escrow
shares).
15.2 The sellers and the purchaser shall procure that
they and Xxxxxx Xxxxxxx Xxxxxx shall enter into an
escrow agreement in respect of the escrow shares,
the material terms of which will be the
following:-
15.2.1 Xxxxxx Xxxxxxx Xxxxxx shall hold the escrow
shares in accordance with the escrow
agreement until it receives written notice
signed by the sellers and the purchaser
specifying how the escrow shares are to be
dealt with, and shall deal with the escrow
shares in accordance with such notice;
15.2.2 such notice shall be given by no later than
31 July 1998 if the purchaser pays the second
and third instalments. In these circumstances
the notice shall specify that the escrow
shares shall be delivered to the purchaser;
15.2.3 if the purchaser fails to pay the second
instalment or the third instalment, the
notice shall instruct Xxxxxx Xxxxxxx Xxxxxx
to deliver the escrow shares to the sellers
and the escrow shares shall be forfeited to
the sellers;
15.2.4 in the event of either party refusing to sign
a notice because of a dispute the dispute
shall be referred to arbitration pursuant to
20 and the decision of the arbitrator shall
be final and binding on the parties and the
notice shall be prepared and signed in
accordance with such decision;
15.2.5 dividends declared in respect of the escrow
shares shall not be subject to the escrow
agreement but shall be paid directly to the
purchaser, but any further shares issued by
the Company to the purchaser shall be subject
to the escrow agreement, as will any shares
arising on a sub-division, consolidation or
other restructure of the share capital of the
Company;
15.2.6 upon delivery of the escrow shares to the
sellers pursuant to a notice in accordance
with 15.2.3 the sellers shall become the
owners of the escrow shares and shall be
entitled to procure the re-registration of
the escrow shares into their names; and
15.2.7 the escrow agreement shall contain customary
protections for the escrow agent.
15.3 Should the escrow shares be forfeited to the
sellers pursuant to the provisions of the escrow
agreement encompassing the matters referred to in
15.2.3, this agreement shall be deemed to have
been terminated due to a material unremedied
breach by the purchaser and the sellers shall (in
addition to the forfeiture referred to in 15.2.3),
be entitled to retain, as a genuine pre-estimate
of liquidated damages, all cash and FSAH B
shares paid to the sellers on account of the
purchase price, but shall have no other claim
against the purchaser arising from such breach or
termination. For the avoidance of doubt it is
recorded that the forfeiture of the escrow shares
shall apply only if the second or third instalment
is not paid.
15.4 The provisions of this clause 15 shall not
preclude the Company from borrowing against the
assets of the Company, or from selling,
refinancing or otherwise restructuring its
business, or preclude the purchaser from disposing
of its investment in the Company.
16. Confidentiality
16.1 The parties to this agreement acknowledge that
each of them wishes to retain strict
confidentiality regarding the negotiations and the
subject matter and contents of this agreement.
16.2 Each party therefore undertakes to the other party
to treat all negotiations, the content and subject
of this agreement and any other matters relating
to this agreement in strict confidence and not to
disclose any provisions of this agreement to any
third party without the prior consent of the other
parties, (which shall not be unreasonably
withheld), except where it is necessary to do so
to enforce the provisions of this agreement.
17. Warranties
The following warranties are, unless otherwise stated
in respect of any warranty, (in which case the specified
period shall apply), given as at the signature date, as
at the fulfilment date and for the period between those
dates. The sellers accordingly warrant to the purchaser,
that except as disclosed to the purchaser in Schedule
3 to this agreement:-
17.1 warranty regarding registration
17.1.1 Each of the Company and Propco is a private
company, duly registered in accordance with
the provisions of the Companies Act, 1973.
17.1.2 No steps have been taken or are contemplated
in respect of the Company or Propco in terms
of section73 of the Companies Xxx 0000 or any
corresponding provision of any legislation in
any other territory.
17.2 warranties regarding capital structure and the
shares
17.2.1 The authorised share capital of each of the
Company and Propco is R1000 divided into 1000
ordinary shares of R1,00 each.
17.2.2 The issued share capital of each of the
Company and Propco is R100 divided into 100
ordinary shares of R1,00 each and all such
shares of the Company and Propco are fully
paid and rank pari passu in every respect
with all the other shares of the relevant
company , and the sellers are the sole
registered and beneficial owners of all such
shares in the numbers set out in clause5 and
are reflected in the register of members of
the Company and Propco as the sole owners of
such shares.
17.2.3 Neither the Company nor its directors nor
Propco or its directors have issued or agreed
to issue any further shares (including bonus
and capitalisation shares) in the capital of
the Company or Propco, nor have they passed
or agreed to pass any resolution for the
increase or reduction of the Companys or
Propcos capital, or for the creation or
issue of any debentures or securities, or for
the alteration of the memorandum or articles
of association of the Company or Propco.
17.2.4 The Companys and Propcos share premium
accounts, if any, have not been reduced in
any manner and neither the Company nor Propco
has transferred any amount from their
reserves (including their share premium
accounts) or undistributed profits to their
share capital or their share premium
accounts.
17.2.5 No person has any right or option or right of
first refusal to acquire any shares in the
Company or Propco, nor to subscribe for or
take up any of the unissued shares in the
Company or Propco, nor are any of the shares
of the Company or Propco subject to any lien
or other preferential right. In particular,
the sellers warrant that they are entitled to
sell the Piemans sale shares and the Propco
sale shares to the purchaser and that upon
such sale the purchaser will be the
beneficial owner of those shares to the
exclusion of all others.
17.2.6 No person has any right to obtain an order
for the rectification of the register of
members of the Company or Propco.
17.3 warranties regarding financial position, assets and
liabilities
17.3.1 auditing and returns
No work remains to be performed, and no
expense remains to be incurred in connection
with-
17.3.1.1 the completion and auditing of the
Companys or Propcos financial
statements (other than the accounts for
the year ended 29February 1996) in
respect of any of their financial years
ended prior to the fulfilment date;
17.3.1.2 the submission of the Companys and
Propcos income tax returns in respect
of any of their financial years ended
prior to the fulfilment date; and
17.3.1.3 the submission of any other return
required by law to have been submitted
by the Company or Propco to any
competent authority prior to the
fulfilment date.
17.3.2 change in financial position
Between the signature date and the fulfilment
date there will be no material adverse change
in the financial position of the Company or
Propco from that prevailing on the signature
date and such change as there may be will
have arisen in the ordinary, normal and
regular course of the Companys or Propcos
business, as the case may be.
17.3.3 capital expenditure
neither the Company nor Propco has authorised
or incurred any capital expenditure otherwise
than in the ordinary, normal and regular
course of its business;
17.3.4 dividends
17.3.4.1 Neither the Company nor Propco has
declared or paid any dividends in
respect of any period of trading prior
to the signature date which have not
been paid in full and neither company
will declare or pay any dividends prior
to the fulfilment date.
17.3.4.2 No person will be entitled to
participate in or to receive a
commission on the profits or dividends
of the Company or Propco except as a
shareholder thereof.
17.3.5 liabilities
At the fulfilment date the Company and Propco
will not have any liabilities of any nature
whatsoever, actual or contingent, other than
those incurred in the normal and regular
course of their businesses.
17.3.6 assets
17.3.6.1 The Company and Propco own the assets
necessary for the conduct of their
businesses and have good and marketable
title thereto, and that except for
agreements entered into in the ordinary
course of business no other person has
any rights to or in respect of such
assets.
17.3.6.2 The Companys and Propcos assets are in
good order and condition and fully
operational apart from breakdowns (in
the ordinary course) and any loss or
damage to or destruction of such assets
beyond the control of the Company and
Propco; provided that any such loss,
damage or destruction will have been
fully insured for the benefit of the
Company or Propco, as the case may be.
17.3.6.3 None of the assets of the Company or
Propco is subject to any option or right
of first refusal in favour of any
person.
17.3.7 debtors
17.3.7.1 All amounts owing to the Company by its
debtors at the fulfilment date (save for
debtors totalling in aggregate R90000,
being the amount of the Companys normal
bad debt provision will be recovered by
the Company from those debtors in full
by no later than 31 August 1996; and, in
the event of any amounts owing by those
debtors not being recovered by such
date, those amounts shall be recoverable
from the sellers by the Company,
provided that the purchaser shall
procure that the Company shall cede to
the sellers or their nominees the claims
against the debtors in question. If bad
debts are less than R90 000 the balance
shall contribute to profit.
17.3.7.2 Propco has no debtors other than the
Company.
17.4 warranty regarding suretyships
Neither the Company nor Propco is bound by any
suretyship for the obligations of any person, or
by any other guarantee or indemnity;
17.5 warranties regarding the business of the Company
and Propco
17.5.1 manner of carrying on business
Between the signature date and the fulfilment
date-
17.5.1.1 the Company and Propco have continued to
operate in the normal and regular course
of their businesses, and such businesses
have been carried on in a proper and
regular manner;
17.5.1.2 neither the Company nor Propco has
changed its normal manner and method of
carrying on business;
17.5.1.3 no assets have been acquired or sold
otherwise than in the ordinary, normal
and regular course of the Companys or
Propcos business and without the
written consent of the purchaser.
17.5.2 goodwill and scope of business
At the fulfilment date the Company and Propco
will not have done or omitted to do anything
which has or will-
17.5.2.1 materially prejudice the continued
goodwill of the Company or Propco;
17.5.2.2 reduce the scope of the Companys or
Propcos business;
17.5.2.3 result in any business associate or
customer of the Company or Propco
ceasing to transact business with the
Company or Propco or vary the terms upon
which it transacts business with the
Company or Propco.
17.5.3 contracts
17.5.3.1 All contracts entered into by the
Company and Propco have been entered
into under normal credit terms and are
subject to payment in accordance with
those terms.
17.5.3.2 There is no single material contract
with a customer or supplier which is of
longer duration than 6months, and the
Company and Propco are not party to any
unusual agreement.
17.5.3.3 Neither the Company nor Propco is party
to any contract with any of its
directors or employees requiring more
than one months notice of termination,
or entitling any of them to compensation
on termination of employment, or to
participation in or entitlement to a
commission on profit.
17.5.3.4 Neither the Company nor Propco are party
to any agreement which has not been
entered into on an arms-length basis and
on terms which are normal having regard
to the nature of its business.
17.5.3.5 Copies of all contracts and other
documents submitted to the purchaser in
connection with this agreement, (whether
during the course of the due diligence
investigation or otherwise) fully and
correctly reflect all the terms and
conditions thereof, are not subject to
any claim for rectification, and have
not been amended in any respect.
17.5.3.6 Neither the Company nor Propco is in
breach of any agreement entered into
between it and any other person and each
of them has complied in all material
respects with its obligations under such
agreements.
17.5.3.7 Neither the Company nor Propco is party
to any agreement requiring the payment
of royalties, or any agreement which in
any way restricts the trading or other
activities of the Company or Propco
within the Republic of South Africa.
17.5.3.8 The sellers are not aware of any facts,
matters or circumstances which may give
rise to the cancellation of any of the
contracts to which the Company or Propco
is bound as a result of any breach
thereof by the Company or Propco.
17.5.3.9 The transaction provided for in this
agreement does not constitute a breach
of any of the Companys or Propcos
contractual obligations nor will it
entitle any person to terminate any
contract to which the Company or Propco
is a party.
17.5.4 intellectual property rights
17.5.4.1 The businesses conducted by the Company
and Propco do not infringe any patent,
copyright, trade xxxx or other
industrial property rights and no person
is entitled to an order requiring the
Company or Propco to change its name or
its trading style, or any of the marks
and designs applied by it to its
products.
17.5.4.2 The trading methods and style used by
the Company and Propco, including any
designs, marks and the like applied in
connection with their businesses, do not
constitute an infringement of the rights
of any other person.
17.5.4.3 No person is entitled to an order
requiring the Company or Propco to
change its name, its trading style or
any of the marks and designs used by
them in their business.
17.5.4.4 The Company and Propco are the owners of
the registered trademarks Piemans
Pantry and Surfs-Up used by them in
their businesses and have paid all
renewals for such trademarks when due
and have not done or omitted to do
anything which may entitle any third
party to bring proceedings for the
expungement of such marks.
17.5.5 laws, regulations, consents, licences and
permits
17.5.5.1 The Company and Propco have complied
with all laws and regulations affecting
their affairs and businesses, except
only to the extent that any infringement
of those laws and regulations can
readily be rectified.
17.5.5.2 The Company and Propco are in possession
of all consents, permits and licences
necessary for the conduct of their
businesses and affairs, and the sellers
are not aware of any facts which may
give rise to the cancellation of, or
failure to renew, any such licences,
permits or consents or to their only
being renewed subject to the imposition
of onerous conditions not presently
applicable thereto.
17.5.6 labour laws, regulations, determinations,
agreements and disputes
17.5.6.1 The Company and Propco have complied
with all wage determinations and
industrial conciliation agreements which
apply to them, their businesses and
their employees.
17.5.6.2 The Company and Propco have complied
with the grievance procedures agreed to
by them with regard to grievances of and
relations with their employees.
17.5.6.3 Neither the Company nor Propco has
entered into any recognition agreement
with any labour union.
17.5.6.4 Neither the Company nor Propco is party
to any labour disputes and neither is
not obliged by law, agreement, judgment
or order of court, to reinstate
employees that have been dismissed or
will be dismissed.
17.5.7 insurance
17.5.7.1 The Company carries insurance cover
against loss arising from accident,
fire, earthquake, flood, burglary,
theft, employer's liability, workmen's
compensation, public liability, storm
damage, civil commotion, riot or
political risk and loss of profits, and
such insurance will continue to be
effective after the effective date; all
premiums due in respect of such
insurance have been paid and the Company
has complied with all of the conditions
to which the liability of the insurers
under the policies of insurance will be
subject.
17.5.7.2 Propco carries insurance against fire,
earthquake, flood and storm and such
insurance will continue to be effective
after the effective date; all premiums
due in respect of such insurance have
been paid and Propco has complied with
all of the conditions to which the
liability of the issuers under the
policy of insurance will be subject.
17.5.7.3 The sellers are not aware of any facts,
matters or circumstances which may give
rise to the cancellation of the policies
of insurance referred to in clause
17.5.7.1 and 17.5.7.2 or the repudiation
of any claims thereunder or to such
policies not being renewed in the future
or only being renewed subject to the
imposition of onerous conditions not
presently applicable.
17.5.8 employment, leave, remuneration and pension
17.5.8.1 No employee or official of the Company
or Propco is entitled to any exceptional
leave privileges, accumulated leave,
pension or the like.
17.5.8.2 On the fulfilment date neither the
Company nor Propco will in any material
respect have improved the terms of
employment of or remuneration payable to
any of their employees from that
prevailing at the signature date.
17.5.8.4 There is no unfunded deficit in respect
of any future liability of any pension
fund of which any of the Companys or
Propcos employees are members; provided
that if there is any such deficit in
respect of services of any such
employees, as certified by any actuary
for the time being of the pension fund,
whether the Company or Propco has any
liability in respect thereof or not,
then without prejudice to the
purchasers right as a result of the
breach of this warranty the purchaser
will be entitled to claim payment from
the sellers of an amount equal to the
amount of such unfunded deficit.
17.5.9 restraint of trade
Neither the Company nor Propco is bound by
any restraint of trade agreement.
17.5.10 resolutions
No resolutions have been passed by the
members or directors of the Company or
Propco, save for:
17.5.10.1 such resolutions as may be necessary to
give effect to this agreement;
17.5.10.2 such resolutions as have been passed in
the ordinary course of business or as
shall be approved by the purchaser in
writing, which approval may not be
unreasonably withheld;
17.6 warranty regarding litigation
Neither the Company nor Propco is party to any
legal proceedings, or labour disputes, including
wage disputes, or statutory enquiries or
investigations, other than normal debt
collections, and the sellers are not aware of any
legal proceedings threatened or instituted against
the Company or Propco or of any facts which are
likely to give rise to those proceedings.
17.7 warranties regarding statutory requirements
17.7.1 The Company and Propco have complied with all
the provisions of the Companies Act, the laws
relating to taxation and all other laws and
bylaws which affect them and their property.
17.7.2 All statutory requirements of the Receiver of
Revenue, the Registrar of Companies and all
other authorities, governmental, municipal or
otherwise have been complied with, and there
are no matters outstanding in connection with
the rendering of returns and the payment of
dues and levies.
17.8 warranties regarding books of account and minutes
17.8.1 The books and records of the Company and
Propco are up-to-date and have been properly
kept according to law and will be capable of
being written up within a reasonable time so
as to record all of the transactions of the
Company or Propco, as the case may be.
17.8.2 The minute books of the Company and Propco
contain all of the resolutions passed by the
directors and the members of the Company and
Propco.
17.9 warranties regarding taxation
17.9.1 definition
For the purpose of the warranties set out
below, the word tax shall, unless the
context indicates the contrary, mean any tax
including, but not limited to, income tax,
general sales tax, Regional Service Council
levies, value-added tax (VAT) and any duty
or levy (including any penalty or interest)
imposed by any law administered by the
Commissioner for Inland Revenue or his lawful
representative or any other authority
entitled to administer taxes in the Republic
of South Africa.
17.9.2 administration
17.9.2.1 The records of the Company and Propco
include all of the resolutions passed by
their directors and shareholders;
17.9.2.2 neither the Company nor Propco is party
to any tax objection or appeal nor are
any such proceedings threatened against
or likely to be instituted by or against
the Company or Propco, nor are the
sellers aware of any circumstances which
may give rise to the institution of any
such proceedings;
17.9.2.3 no queries have been addressed to the
Company or Propco or to any of their
representatives by any official
administering any tax nor have any
objections with regard to any tax been
lodged by the Company or Propco which
have not been fully disposed of;
17.9.2.4 each of the Company and Propco has paid
or will, prior to the fulfilment date,
pay all tax where the due date for
payment of the tax arises on or before
the fulfilment date; in respect of any
tax which is due for payment after the
fulfilment date, adequate provision or
reserves for the payment of that tax
will have been made;
17.9.2.5 neither the Company nor Propco is liable
to pay any penalty or interest in
connection with any claim for tax;
17.9.2.6 neither the Company nor Propco is
subject to any liability as a result of
the re-opening of any tax assessment;
17.9.2.7 all necessary information, notices and
returns (all of which are true and
accurate and none of which is disputed
by the Commissioner for Inland Revenue
or other appropriate authority) have
been properly and timeously submitted by
the Company and Propco and there is no
reason to suppose that any such
information or return will not in due
course be accepted as true and accurate
by the Commissioner for Inland Revenue
or other appropriate authorities;
17.9.2.8 the Company has properly operated the
PAYE system, has deducted tax as
required from all payments made to or
treated as made to employees or former
employees of the Company, or any other
payment from which tax is required to be
deducted in terms of the fourth schedule
of the Income Tax Act and has accounted
to the Commissioner for Inland Revenue
or other appropriate authority for all
tax so deducted;
17.9.2.9 each of the Company and Propco has
withheld all taxes which it is liable to
withhold and has paid such taxes to the
Commissioner for Inland Revenue or other
appropriate authorities;
17.9.2.10 no notice has been served on the Company
or Propco in terms of which the Company
or Propco has been appointed as a
representative taxpayer;
17.9.2.11 each of the Company and Propco has
timeously lodged a claim for any refund
of tax to which it is or may be
entitled;
17.9.2.12 neither the sellers nor the Company nor
Propco is a party to any agreement with
the Commissioner for Inland Revenue
bearing upon or relating to the manner
or circumstances in which tax will or
might be levied on the Company or Propco
nor has the Commissioner granted the
Company or Propco any allowance in terms
of sections24 or 24C of the Income Tax
Act;
17.9.2.13 each of the Company and Propco is
registered as a VAT vendor in terms of
the Value-Added Tax Act, 1991, and has
fully and completely complied with all
of its obligations in terms of the VAT
Act, and has paid all VAT that it is
obliged to pay.
17.9.3 balance sheet
17.9.3.1 neither the Company nor Propco has
acquired from any other companies under
any scheme of arrangement or
reconstruction of any companies or its
affairs (including any scheme for the
amalgamation of two or more companies
and any other scheme) which is
sanctioned by any order of court on or
after 1April 1971, any asset which is,
in terms of section 22A of the Income
Tax Act, deemed to be trading stock of
the Company or Propco;
17.9.3.2 neither the Company nor Propco is party
to any agreement with the Commissioner
for Inland Revenue of the nature
referred to in section24A of the Income
Tax Act;
17.9.4 deductible payments
no rents, interest, annual payments or other
similar expenditure incurred by the Company
will be disallowed as a deduction wholly or
in part from the income of the Company or
Propco.
17.9.5 stamp duty
each of the Company and Propco has paid all
stamp duty for which it is or may be liable
and there is no liability for any penalty in
respect of such duty nor are there any
circumstances or transactions to which the
Company or Propco is or has been a party
which may result in the Company or Propco
becoming liable for any such duty or penalty.
17.9.6 tax avoidance and donations
17.9.6.1 neither the Company nor Propco is party
to any transaction, operation or scheme
of the nature referred to in section
103(1) of the Income Tax Act or
section73 of the VAT Act;
17.9.6.2 there are no circumstances affecting the
Company or Propco under which the
provisions of section7(7) of the Income
Tax Act can operate;
17.9.6.3 neither the Company nor Propco has made
or received any donation on which
donations tax can be levied nor has it
made any donation at the instance of a
third party;
17.10 environmental warranties
17.10.1 each of the Company and Propco complies
with all conditions, limitations,
obligations, prohibitions and
requirements contained in any
environmental legislation or
regulations, by-laws, or ordinances
(environmental legislation) and the
sellers are not aware of any facts or
circumstances which may lead to any
breach of any environmental legislation
including without limitation the
Environmental Conservation Act and the
Water Act;
17.10.2 no poisonous, noxious, hazardous,
polluting, dangerous or environmentally
harmful substances or articles have been
produced, treated, kept at or deposited
at the premises where the Company or
Propco carries on business, or have been
released or discharged from such
premises and in particular no matter or
thing been discharged into any public
sewer or into any drain or sewer
connecting the public sewer and has not
contaminated the land surrounding the
premises or any water;
17.10.3 there are no deficiencies in the waste
disposal arrangements carried on at or
in respect of the premises which may
lead to a failure by the Company or
Propco to comply with any existing
environmental legislation, including
without limitation, the Environmental
Conservation Act and the Water Act or
which will harm the environment;
17.10.4 there have been no disputes claims or
investigations or other proceedings
pending or threatened regarding the use
of the Companys or Propcos premises,
or the release of any substances from
such premises;
17.10.5 there are no environmental claims,
investigations or other proceedings
pending or threatened against the
sellers or the Company or Propco in
respect of the business of the Company
or Propco and there is no actual or
contingent liability of either the
sellers or the Company or Propco to make
good, repair, reinstate or clean up any
property;
17.10.6 no water, whether surface or ground
water, has been contaminated, polluted
or the quality thereof altered in such
a way that the provisions of any water
law whether common law or statutory law
will have been breached.
17.11 disclosure
All facts and circumstances material to this
transaction and not known to the purchaser, or
which would be material or would be reasonably
likely to be material to a purchaser of the sale
shares and to the purchase price thereof have been
disclosed to the purchaser.
17.12 The liability of the sellers under the
warranties is joint and several.
17.13 Each of the warranties set out above is
without prejudice to any other warranty and
shall not be limited by any other clause of
this agreement.
17.14 Each warranty shall be deemed to be material
and to be a material representation inducing
the purchaser to enter into this agreement.
17.15 The fact that the sellers have given the
purchaser the express warranties listed above
shall not in any way be construed as
relieving the sellers from any liability
which they may have at common law arising out
of a failure to disclose any fact in relation
to the Company or Propco or their businesses
or affecting this agreement.
17.16 The sellers jointly and severally indemnify
and hold the purchaser harmless from and
against any loss, damages, claims, actions or
expenses of any nature whatsoever and
howsoever incurred, which are suffered or
sustained by the purchaser pursuant to any
breach by the sellers of any of the
warranties contained in this agreement.
18. Sale of business
18.1 At the election of the purchaser the transaction
contemplated in this agreement shall be converted
into a purchase by the purchaser or a wholly-owned
subsidiary of the purchaser, of the businesses of
the Company and Propco as going concerns. Such
election shall be exercised on or before the
fulfilment date.
18.2 Should the purchaser elect to convert this
transaction into a sale of business the material
commercial terms of this agreement (including
without limitation the quantum of the purchase
price and the manner of payment of the purchase
price) shall not be affected and the purchaser
shall gross up the purchase price to compensate
the sellers for any STC payable on liquidation or
deregistration of the Company and Propco, and pay
the costs of liquidation or deregistration of the
Company and Propco.
18.3 This agreement will terminate with effect from the
date of signature of any agreement giving effect
to a sale of the Companys and Propcos businesses
as contemplated in this clause.
19. Breach
19.1 If the sellers (which for the purposes of this
clause shall be deemed to be one party and shall
exercise the remedies conferred on them by this
clause jointly) or the purchaser, as the case may
be, breach any provision of this agreement and
remain in breach for 30days after receipt of
written notice from the aggrieved party requiring
it to rectify the breach, the aggrieved party
shall be entitled at its option (and without
prejudice to any other rights that it may have at
law) -
19.1.1 to xxx for specific performance of the
defaulting partys obligations under this
agreement; or
19.1.2 (either as an alternative to a claim in terms
of 19.1.1 or upon the abandonment of such a
claim) to cancel the sale by notice in
writing to the defaulting party and the other
parties to this agreement and to xxx for such
damages as that party may have suffered as a
result of the cancellation;
provided that if the breach is covered by 15.3 the
remedy of the sellers shall be limited to the
remedy prescribed by that clause.
19.2 Neither the seller nor the purchaser shall be
entitled to cancel this agreement on the grounds
of a breach of a term or warranty contained in
this agreement unless it is a material breach of
a material term or warranty which has not been
remedied by the party in breach after being given
notice to remedy in terms of 19.1.
20. Arbitration
20.1 disputes subject to arbitration
Any dispute arising out of or in connection with
this agreement or the subject matter of this
agreement shall be decided by arbitration in terms
of this clause, notwithstanding that the rest of
the agreement may be void or voidable or may have
terminated or been cancelled, this clause being a
separate, divisible agreement. Claims in delict or
based on unjust enrichment or for rectification of
the agreement are included.
20.2 notice to state whether claim is disputed
A party may call on the other party in writing to
state in writing whether a claim is disputed or
not. If the other party fails to do so within 7
days the first party may proceed by way of
litigation, and if the other party then defends
such litigation the first party may elect to
continue with the litigation or to refer the
matter to arbitration. In the latter event the
other party shall immediately pay the costs
incurred by the first party in the litigation on
an attorney and own client basis and shall not be
entitled to recover that partys own costs from
the first party.
20.3 appointment of arbitrator
The arbitrator shall be an attorney or advocate
nominated at the request of either party by the
president for the time being of the Law Society of
the Transvaal.
20.4 venue and period for completion of arbitration
The arbitration shall be held in Johannesburg and
the parties shall endeavour to ensure that it is
completed within 90 days after notice requiring
the claim to be referred to arbitration is given.
20.5 Arbitration Act
The arbitration shall be governed by the
Arbitration Xxx 0000 or any replacement Act.
20.6 procedure
The procedure to be followed in the arbitration
shall be determined by the arbitrator, with due
regard to 20.4=REF1, at the request of either
party.
20.7 procedure
The procedure to be followed in the arbitration
shall be that laid down in the Rules for the
Conduct of Arbitrations published by the
Association of Arbitrators, current at the date
the arbitrator is nominated, provided that the
arbitrator may vary the procedure, or substitute
a different procedure, in his discretion.
20.8 arbitrators powers
The arbitrator shall have full and unrestricted
powers in relation to the arbitration. In
particular, but without limitation, the
arbitrator:
20.8.1 shall have the powers set out in section
21(1) of the Arbitration Xxx 0000;
20.8.2 need not strictly observe the rules of
evidence;
20.9 need not strictly observe the principles of
law and may decide the matters submitted to
him according to what he considers equitable
in the circumstances;
20.9.1 may have regard to his personal
knowledge of the facts, and any expert
knowledge he may have, relating to the
issues in dispute, but is to afford the
parties an opportunity of challenging
the knowledge he claims to have;
20.9.2 may make such award or awards, whether
interim, provisional or final, as he may
consider appropriate, including without
limitation ex parte awards, declaratory
orders, interdicts, and awards for
specific performance, restitution,
damages, penalties, interest and
security for costs or restitution.
20.10 reasons for award
The arbitrator shall give his reasons for his
award, if so requested by either party.
20.11 costs
20.11.1 If the arbitrators charges and any
other costs have to be paid before the
arbitrator has made his award in respect
of costs, the parties shall pay the
costs in equal shares, and if a party
fails to pay that partys share the
arbitrator may make his award in respect
of the claim and costs in the absence of
that party.
20.11.2 It is recorded that the parties intend
that the substantially successful party
should be awarded a full indemnity for
all the costs reasonably incurred by
that party and not merely the costs on
the supreme court or any other scale.
21. Miscellaneous matters
21.1 postal address
21.1.1 Any written notice in connection with this
agreement may be addressed:
21.1.1.1 in the case of Xxxxx to:
address : XX Xxx 0000
Xxxxxxxxxxx
0000
telefax no : 953 1283
and shall be marked for the attention of
Xxxx Xxxxx
21.1.1.2 in the case of Andreas to:
address : 0 Xxxxx Xxxxxx
Xxxxxxxxxxx Xxxxx
0000
telefax no : 953 1283
and shall be marked for the attention of
Xxxxx Xxxxxxx
21.1.1.3 in the case of Xxxxxx to:
address : XX Xxx 0000
Xxxxxxxxxxx
0000
telefax no : 953 1283
and shall be marked for the attention of
Xxxxxxx Xxxxxx
21.1.1.4 in the case of FSAC and the purchaser to:
address : x/x Xxxxx
Xxxxxxxxxx
XX Xxx 000000
Xxxxxxx
0000
telefax no : 780 2095
and shall be marked for the attention of
Xxxxxxx Xxxxx;
21.1.1.5 in the case of the Company and Propco to:
address : XX Xxx 0000
Xxxxxxxxxxx
0000
telefax no : 953 1283
and shall be marked for the attention of
Xxxx Xxxxx;
21.1.2 The notice shall be deemed to have been duly
given:
21.1.2.1 14 days after posting, if posted by
registered post to the partys address
in terms of this sub-clause;
21.1.2.2 on delivery, if delivered to the partys
physical address in terms of either this
sub-clause or the next sub-clause
dealing with service of legal documents;
21.1.2.3 on dispatch, if sent to the partys then
telefax or telex number and confirmed by
registered letter posted no later than
the next business day.
21.1.3 A party may change that partys address for
this purpose, by notice in writing to the
other party.
21.2 address for service of legal documents
21.2.1 The parties choose the following physical
addresses at which documents in legal
proceedings in connection with this agreement
may be served (ie their domicilia citandi et
executandi):
21.2.1.1 Xxxxx:
000 Xxxx Xxxx
Xxxxxxx
Xxxxxxxxxx
0000
21.2.1.2 Andreas:
0 Xxxxx Xxxxxx
Xxxxxxxxxxx Xxxxx
0000
21.2.1.3 Xxxxxx:
0 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx
0000
21.2.1.4 the purchaser and FSAC:
00 Xxxxxxx Xx
Xxxxxxx
0000
21.2.1.5 the Company and Propco:
Cnr Anvil and Screw Streets
Boltonia
21.2.2 A party may change that partys address for
this purpose to another physical address by
notice in writing to the other party.
21.3 entire contract
This agreement contains all the express provisions
agreed on by the parties with regard to the
subject matter of the agreement and the parties
waive the right to rely on any alleged express
provision not contained in the agreement.
21.4 no representations
No party may rely on any representation which
allegedly induced that party to enter into this
agreement, unless the representation is recorded
in this agreement.
21.5 variation, cancellation and waiver
No contract varying, adding to, deleting from or
cancelling this agreement, and no waiver of any
right under this agreement, shall be effective
unless reduced to writing and signed by or on
behalf of the parties.
21.6 cession
No party may cede that partys rights nor delegate
that partys obligations without the prior written
consent of the other parties.
21.7 applicable law
This agreement shall be interpreted and
implemented in accordance with the law of the
Republic of South Africa.
21.8 jurisdiction
Each of the parties submits itself to and consents
to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the Supreme Court
of South Africa.
21.9 costs
21.9.1 Each party shall bear that partys own legal
costs of and incidental to the negotiation,
preparation, settling, signing and
implementation of this agreement. The stamp
duty, if any, on this agreement shall be
borne by the parties in equal shares. The
stamp duty payable in respect of the
registration of the transfer of the shares
into the name of the the purchaser shall be
borne by the purchaser.
21.9.2 Any costs, including attorney and own client
costs, incurred by a party arising out of the
breach by any other party of any of the
provisions of this agreement shall be borne
by the party in breach.
21.10 indulgences
If a party at any time breaches any of that
partys obligations under this agreement, any of
the other parties:
21.10.1 may at any time after that breach exercise
any right that became exercisable directly or
indirectly as a result of the breach, unless
the aggrieved party has expressly elected in
writing not to exercise the right;
21.10.2 shall not be estopped (ie precluded) from
exercising the aggrieved partys rights
arising out of that breach, despite the fact
that the aggrieved party may have elected or
agreed on one or more previous occasions not
to exercise the rights arising out of any
similar breach or breaches.
Signed at on
1996.
As witness:
.............................................
.............................................
Xxxx Xxxxx
Signed at on
1996.
As witness:
.............................................
.............................................
H Andreas
Signed at on
1996.
As witness:
.............................................
.............................................
M Xxxxxx
Signed at on
1996.
As witness:
.............................................
.............................................
For First South African
Holdings (Proprietary)
Limited
Signed at on
1996.
As witness:
...............................................................................
For Piemans Pantry
(Proprietary) Limited
Signed at on
1996.
As witness:
.............................................
.............................................
For Surfs-Up Investments
(Proprietary) Limited
