EXHIBIT 10.23
ACQUISITION AGREEMENT
1. PARTIES
1.1 OPTRON (PTY) LTD
Registration Number: 1986/004887/07 duly represented by XXXXXX
XXXXXX in his capacity as Director, he being duly authorised
hereto (hereinafter referred to as the "PURCHASER")
1.2 NANINI 209 CC TRADING AS SURETRACK
Registration Number: CK2001/006364/23 duly represented by
XXXXXXX XXXXX XXXXXXXX in his capacity as the sole member of
the corporation, he being duly authorised hereto (hereinafter
referred to as the "SELLER")
1.3 XXXXXXX XXXXX XXXXXXXX
Identity Number: 000000 0000 00 9 (hereinafter referred to as
the "XXXXXXXX")
2. DEFINITIONS
In THIS AGREEMENT unless inconsistent with the context, the following
terms and expressions shall have the meanings assigned to them
hereunder namely:-
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2.1 "ASSETS" all assets of the SELLER including but not limited to
:-
(a) the BUSINESS;
(b) the goodwill of the BUSINESS;
(c) the TRADE NAME;
(d) the INTELLECTUAL PROPERTY;
(e) the stock of the BUSINESS as at the EFFECTIVE DATE;
(f) all files, documents, records and information
relating to the BUSINESS and necessary to conduct the
BUSINESS, including the names and addresses of its
customers and suppliers and its financial records;
(g) all furniture, equipment, fixtures, fittings, motor
vehicles, computers and related equipment on the
PREMISES and/or used in the BUSINESS on the EFFECTIVE
DATE including (but not necessarily limited to) the
items reflected in Annexure "A" hereto;
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(h) all amounts owing to the SELLER by the debtors of the
BUSINESS as at the EFFECTIVE DATE;
(i) all work in progress and pending orders as at the
EFFECTIVE DATE;
(j) all cash on hand and standing to the credit of the
SELLER in its banking account in respect of the
BUSINESS as at the EFFECTIVE DATE;
2.2 "ASSUMED RIGHTS
AND OBLIGATIONS" the rights and such obligations (as are not
stipulated as being excluded in Annexure
"B") arising from the agreements that will
be listed during the due diligence process
referred to clause 5 below and be annexed
hereto as Annexure "B" hereto;
2.3 "BUSINESS" the business of developing, selling,
supplying, installing, implementing,
integrating, maintaining and servicing
computer software and hardware or
application in the earthmoving, transport,
aeronautical and telemetry industries
(including the sale of airtime) carried on
by the SELLER from the PREMISES, which
BUSINESS, as at the EFFECTIVE DATE, the DATE
HEREOF and the CLOSING DATE was, is and will
be conducted under the name and style of
SURETRACK;
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2.4 "CLOSING DATE" a date to be agreed upon between the PARTIES
which shall not be later than 10 (ten) days
after fulfillment of the suspensive
conditions referred to in clause 4 below;
2.5 "DATE HEREOF" the date on which THIS AGREEMENT is duly
signed by or on behalf of all THE PARTIES
hereto, and if not so signed on the same
date then the date of the last signature
hereto;
2.6 "EFFECTIVE DATE" 15 July 2004 notwithstanding the DATE HEREOF
or the CLOSING DATE;
2.7 "EFFECTIVE DATE
ACCOUNTS" the financial statements of the SELLER for
the financial year ending 29 February 2004
duly signed and certified by the SELLER'S
accounting officer accompanied by the
financial statements and accounts of the
SELLER as at and for the period commencing
on 1 March 2004 and ending at close of
business on the day immediately preceding
the EFFECTIVE DATE signed by XXXXXXXX in his
personal capacity as well as on behalf of
the SELLER.
2.8 "INTELLECTUAL
PROPERTY" all the SELLER'S confidential business and
affairs and technical information, data,
copyright licenses and documents necessary
or useful for the carrying on of the
BUSINESS which shall include, but shall not
be limited to :-
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(a) formulae, operating procedures,
installation procedures, control
procedures, specifications,
operating personnel requirements,
operating manuals, equipment,
trademarks, brand names, patents,
designs, know-how, techniques and
technology;
(b) all copyright in such documents,
procedures and specifications and
all licences in respect of such
copyright;
(c) any other INTELLECTUAL PROPERTY
rights, technical data and
documents in whole or in part used
by the SELLER in respect of the
BUSINESS;
(d) the SELLER'S internal control
systems, including accounting and
administrative systems, relating to
the BUSINESS;
(e) financial or other details of the
SELLER'S relationships with the
clients, business associates,
independent contractors and
consultants of the BUSINESS,
wherever situate;
(f) knowledge of and/or influence over
the clients, business associates,
independent contractors and
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consultants of the business,
wherever situate;
(g) details of the financial structure
and operating results of the
BUSINESS;
(h) the SELLER'S contractual or other
arrangements or understandings with
others with whom it has business
associations of whatsoever nature
in relation to the BUSINESS;
(i) the SELLER'S policies and
strategies relating to the
BUSINESS;
(j) knowledge of and/or details
concerning expertise and practices
used by the SELLER in relation to
the BUSINESS and its operations and
with regard to its services;
(k) the SOFTWARE, copyright in the
SOFTWARE and all licences in
respect of such copyright;
2.9 "LIABILITIES" any and all liabilities of the SELLER,
whether pertaining to the BUSINESS or
otherwise as at the EFFECTIVE DATE owed by
the SELLER, including any and all contingent
or accessory liabilities;
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2.10 "XXXXXXXX" Xxxxxxx Xxxxx XxXxxxxx, Identity Number:
670816 5089 80 9, an adult male with full
legal capacity;
2.11 "PARTIES" the SELLER, the PURCHASER and XXXXXXXX;
2.12 "PREMISES" the premises from which the BUSINESS is
conducted, situate at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx;
2.13 "PUBLICO" Cetalon Corporation Incorporated or an
alternative suitable company (corporation)
whose securities can be quoted on an
internationally recognized stock exchange or
quotation medium and which will accordingly
be publicly tradeable;
2.14 "PURCHASER" Optron (Pty) Ltd, Registration Number:
1986/004887/07, a company duly registered
and incorporated with limited liability
according to the Company Laws of the
Republic of South Africa;
2.15 "SELLER" Nanini 209 CC trading as SureTrack,
Registration Number: CK2001/006364/23, a
close corporation duly registered in
accordance with the Close Corporation Laws
of the Republic of South Africa;
2.16 "SOFTWARE" (a) all computer programs developed by
and/or used in connection with the
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BUSINESS and all source codes,
listings, development materials and
descriptive, user, dealer and other
documentation and relevant
literature relating to and/or
associated therewith and all
enhancements and deritives thereof
together with any and all
improvements, modifications,
discoveries, technical information,
copyright and copyright
applications, know-how, trade
marks, trade names, designs,
licences and licensing rights
relating to and/or in respect
thereof;
(b) Without limiting the generality of
the aforestated the software
developed by CSS Software Solutions
(Pty) Ltd and all source code,
development materials and
documentation related thereto known
and described as :-
(i) GTMS (Global Telemetry
Monitoring System);
(ii) GTMS.Air (Global Telemetry
Monitoring System.Air);
(iii) XXXXX (Satellite Assisted
Machine Management System);
(iv) MAP-Engine;
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(v) VAR PPC Interface;
(vi) AT07 and GTMSSSF
which will be fully documented,
described and particularized on CDs
that the SELLER shall provide to
the PURCHASER as part of the
technical due diligence envisaged
pursuant to clause 5 hereof and
which shall comply with the
functional and technical
specifications to be provided by
the SELLER to the PURCHASER;
2.16 "TRADE NAME" the name "SURETRACK";
3. INTRODUCTION
WHEREAS:
3.1 The SELLER wishes to sell the BUSINESS and the ASSETS to the
PURCHASER who wishes to purchase the same.
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS :
4. SUSPENSIVE CONDITIONS
4.1 This agreement is subject to and conditional upon fulfillment
of the following suspensive conditions :-
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4.1.1 The due diligence investigation(s) referred to in
clause 5 being carried out to the satisfaction of the
PURCHASER;
4.1.2 The SELLER procuring and furnishing the PURCHASER
with a software assignment agreement in the form and
format of the document annexed hereto as Annexure "C"
duly signed and executed by CSS Software Solutions
(Pty) Ltd and the persons jointly referred to therein
as "THE ASSIGNOR";
4.1.3 the SELLER providing the PURCHASER with documentary
proof to the PURCHASER'S satisfaction and as the
PURCHASER may reasonably require that the agreements
referred to in Annexure "B" and the INTELLECTUAL
PROPERTY are ceded, assigned and made over unto and
in favour of the PURCHASER, free of liability or
encumbrance;
4.1.4 All necessary and required approvals being obtained
from the regulatory authorities including but not
limited to the Exchange Control Department of the
South African Reserve Bank.
4.1.5 XXXXXXXX signing and executing a restraint of trade
and confidentiality undertaking substantially in the
form and format of Annexure "D" hereto.
4.1.6 XXXXXXXX entering into a contract of employment with
the PURCHASER for a minimum period of 3 (three) years
substantially in the form and format of Annexure "E"
hereto.
4.2 In the event of the suspensive conditions referred to in
clauses 4.1.1 to 4.1.6 not being fulfilled within 30 (thirty)
days of the DATE HEREOF or any extension of such period in
terms of clause 4.5, the PURCHASER shall be entitled, by
written notice to the SELLER, to declare this agreement of no
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further force or effect whatsoever, in which event no party
shall have any claim of any nature whatsoever against the
other as a result thereof save that the STATUS QUO ANTE shall
be restored.
4.3 The suspensive conditions contained in clauses 4.1.1 to 4.1.6
have been inserted herein solely for the benefit of the
PURCHASER who may by notice in writing to the SELLER at any
time prior to the expiry of the period referred to in clause
4.2 or any extension thereof in terms of clause 4.5 waive
compliance with the whole of or any part of any one or more of
such conditions.
4.4 The PURCHASER may at any time before the expiry of the period
referred to in clause 4.2 agree in writing to the extension of
such period.
5. DUE DILIGENCE
5.1 The PURCHASER shall conduct such due diligence investigations,
including but not necessarily limited to a financial,
technical, legal and operational due diligence as the
PURCHASER may in its sole and absolute discretion require on
and in respect of the SELLER and its BUSINESS.
5.2 The SELLER undertakes to co-operate fully with the PURCHASER
and its representatives and to make available to the
PURCHASER, its directors, employees, attorneys, auditors
and/or authorized representatives during normal business hours
all such documents, agreements, reports, printouts, financial
statements, management accounts, income tax assessments and
returns and all other records, information and documentation
as the PURCHASER and/or any of its authorized representatives
may require for purposes of the due diligence and any
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failure on the part of the SELLER to comply herewith shall be
deemed to be a breach of a material term or condition of this
agreement by the SELLER.
5.3 The PURCHASER shall (if the transaction set out in this
agreement does not become unconditional pursuant to the
suspensive conditions contained in clause 4 not being met)
keep secret and confidential and not disclose to any person
any information of and concerning the business and the
seller's affairs that it may acquire as a result of the due
diligence investigation and shall not disclose such
information to any third party or use any such information for
its own benefit unless such information comes into the public
domain otherwise than as a result of the breach of the
PURCHASER of its obligations in terms of this clause.
5.4 As soon as reasonably possible after the agreement ceases to
be of any further force and effect as provided for in clause 4
the PURCHASER shall return and cause to be returned to the
SELLER all books, records and other documents that will have
been furnished to it and its representatives for the purposes
of the due diligence investigation and shall surrender to the
SELLER all copies of such documents that may have been made
for the purposes of such due diligence investigation.
5.5 The PURCHASER shall provide the SELLER with written notice
upon completion of the due diligence investigation stating
that same have been concluded to the PURCHASER'S satisfaction
or not to the PURCHASER'S satisfaction and the PURCHASER shall
not be obliged to state any reasons in such notice should it
notify the SELLER that the due diligence was not concluded to
its satisfaction.
5.6 If the PURCHASER is satisfied with the results of the due
diligence investigation(s), that fact shall not detract from
any warranty or indemnity given by the SELLER and/or XXXXXXXX
to the PURCHASER in terms of this
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agreement, all of which warranties and indemnities shall
remain of full force and effect in accordance with the
provisions of this agreement, notwithstanding the satisfactory
completion of such due diligence investigation(s) by the
PURCHASER.
5.7 Without derogating from the provisions of clauses 5.1 to 5.6
above and without limiting the generality thereof, it is
agreed that, in respect of the SOFTWARE :-
(a) the SELLER shall provide the PURCHASER with
functional specifications in respect of the SOFTWARE
to the satisfaction of the PURCHASER;
(b) the PURCHASER shall be provided with the source code
and the like in order to enable the PURCHASER to run
such checks and verifications as the PURCHASER may
deem necessary with a view to establishing whether or
not and to what extent the SOFTWARE complies with the
functional specifications.
(c) The PURCHASER shall thereafter notify the SELLER in
writing of all respects in which the SOFTWARE fails
to comply fully or adequately with the functional
specifications.
(d) The SELLER shall be and remain liable and obligated
to ensure that any such deficiencies in the SOFTWARE
shall be remedied and rectified within such time
periods as the SELLER and the PURCHASER will agree to
in writing at the time.
(e) The above provisions of this clause 5.7 shall apply
MUTATES MUTANDIS to and in respect of the technical
specifications of the SOFTWARE.
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6. SALE AND PURCHASE
6.1 The SELLER hereby sells to the PURCHASER who hereby purchases
from the SELLER with effect from the EFFECTIVE DATE the
BUSINESS together with all the ASSETS as a going concern and
together with all rights necessary for the continuation of the
BUSINESS by the PURCHASER, upon the terms and conditions and
the warranties and representations and undertakings set forth
in this agreement.
6.2 The sale and purchase provided for in this agreement expressly
exclude the SELLER'S LIABILITIES.
7. VALUE ADDED TAX
7.1 The parties record that :-
7.1.1 The SELLER is registered as a vendor under the Value
Added Tax Act;
7.1.2 The PURCHASER is registered as a vendor under the
Value Added Tax Act;
7.2 The SELLER and XXXXXXXX warrants that as at the EFFECTIVE DATE
and the CLOSING DATE the BUSINESS was and will continue to be
:-
7.2.1 an enterprise capable of separate operation;
7.2.2 an income earning activity;
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7.3 The PURCHASER records that it intends to continue to operate
the business uninterruptedly with effect from the EFFECTIVE
date.
7.4 If for any reason the transaction contemplated in this
agreement is not zero rated for VAT, the PURCHASER shall be
liable for payment of any VAT in addition to the purchase
price referred to in clause 8.
8. PURCHASE PRICE AND PAYMENT
8.1 Subject to such adjustments as may be required pursuant to
this AGREEMENT the total purchase price payable by the
PURCHASER to the SELLER for the BUSINESS and the ASSETS shall
be an amount of R7.8 million (Seven Million Eight Hundred
Thousand Rand), which shall be allocated in the following
manner :-
8.1.1 in respect of the ACCOUNTS RECEIVABLE the amount of
R1 900 000,00 (One Million Nine Hundred Thousand
Rand);
8.1.2 in respect of the business name the amount of R100
000,00 (One Hundred Thousand Rand);
8.1.3 in respect of the ASSUMED RIGHTS AND OBLIGATIONS
(including unexecuted or partially executed orders)
the amount of R520 000,00 (Five Hundred and Twenty
Thousand Rand);
8.1.4 in respect of the fixed assets in the amount of R130
000,00 (One Hundred and Thirty Thousand Rand;
8.1.5 in respect of the goodwill the amount of R150 000,00
(One Hundred and Fifty Thousand Rand);
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8.1.6 in respect of the SOFTWARE the amount of R5 000
000,00 (Five Million Rand);
8.2 The purchase price referred to in clause 8.1 shall be
discharged as follows:-
8.2.1 the PURCHASER shall effect payment to the SELLER of
:-
(a) R1.9 million (One Million Nine Hundred
Thousand Rand) on the CLOSING DATE;
(b) R1 million (One Million Rand) on the first
anniversary of the CLOSING DATE;
(c) R1 million (One Million Rand) on the second
anniversary of the CLOSING DATE;
8.2.2 The balance in the sum of R3.9 million (Three Million
Nine Hundred Thousand Rand) by way of the PURCHASER
procuring the issuing in favour of the SELLER of so
many shares (common stock) in the issued share
capital of PUBLICO at an issue price of 3 USD per
share as are equivalent in value to the sum of R3.9
million (Three Million Nine Hundred Thousand Rand)
based on the Rand/Dollar exchange rate prevailing at
the EFFECTIVE DATE.
8.2.3 The shares (common stock) referred to in clause 8.2.2
:-
(a) shall be endorsed and bear such legend(s) as
may be reasonably necessary and required to
give effect to this agreement, including but
not necessarily limited to such endorsement
and/or legend(s) as will pertain to
restrictions
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on the sale thereof and/or to the
satisfaction of the Exchange Control
Department of the South African Reserve
Bank;
(b) 50% thereof may not be traded, sold,
transferred or otherwise alienated or
encumbered for a period of 24 (twenty four)
months from the EFFECTIVE DATE and the
remaining 50% for a period of 36 (thirty
six) months after the EFFECTIVE DATE.
(c) The share certificates shall be placed and
kept in trust by auditors or attorneys to be
agreed upon between the parties pending the
expiry of the periods referred to in clause
8.2.3(b) above.
8.3 In the event that the issuing of shares as envisaged and
provided for in clause 8.2.2 cannot and does not occur by not
later than 31 December 2004, the amount of R3.9 million (Three
Million Nine Hundred Thousand Rand) referred to in clause
8.2.2 above shall be discharged by the PURCHASER effecting
payment to the SELLER of the said sum of R3.9 million (Three
Million Nine Hundred Thousand Rand) by not later than 31
January 2005.
8.4 The SELLER and XXXXXXXX shall procure that so many of the
shares of PUBLICO referred to in clause 8.2.2 above as would
be equal in value to 1% of the total purchase price stipulated
in clause 8.1 will be allocated to the SELLER'S employees
referred to in clause 15 below by way of "retention bonuses"
to be received by such employees on condition that they remain
employed by and with the PURCHASER for not less than one year
following the EFFECTIVE DATE. The PURCHASER undertakes to
procure that shares of PUBLICO equal in number or in value to
that to be allocated by the SELLER towards the SELLER'S
employees retention bonuses shall be allocated for such
purpose
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9. DELIVERY
On and with effect from 15 July 2004 and notwithstanding the EFFECTIVE
DATE and the CLOSING DATE the SELLER shall deliver to the PURCHASER :-
9.1 all the ASSETS together with all documents and certificates
recording the SELLER'S rights in respect of or relating to the
ASSETS, and all documents, duly completed, as may be necessary
to effect cession and transfer of all rights in respect of the
ASSETS to the PURCHASER.
9.2 copies of all books of account, fixed asset registers, stock
records, contracts, vouchers and all other documents and
records relating to the BUSINESS and thereafter permit
reasonable access to the originals thereof by the PURCHASER.
9.3 all licence and registration certificate and current licence
receipts in respect of all motor vehicles comprising part of
the ASSETS, whether such vehicles are on lease, instalment
sale or otherwise, together with all documents, duly signed
and completed by the transferor and roadworthy certificates to
enable the PURCHASER to effect transfer of the registration
and licensing of such motor vehicles into its own name or that
of its nominee.
10. EFFECTIVE DATE ACCOUNTS
10.1 The EFFECTIVE DATE ACCOUNTS shall :-
10.1.1 be prepared on the same basis and in accordance with
the same principles as applied to the preparation of
the previous financial statements of the BUSINESS and
generally prepared and audited
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in accordance with sound and generally accepted
accounting principles;
10.1.2 contain a fair reflection as at EFFECTIVE DATE;
10.1.3 accurately reflect :-
10.1.3.1 the assets and liabilities, whether actual,
contingent or otherwise of the BUSINESS, and
record by way of a note the nature of any
contingent liability;
10.1.3.2 the trading results of the BUSINESS for the
accounting period ended at close of business
on the day immediately preceding the
EFFECTIVE DATE;
10.1.3.3 as a liability of the BUSINESS provision for
staff leave and other similar accounts in
each case whether accrued or not in respect
of all periods up to the EFFECTIVE DATE;
10.1.4 be adjusted so as to exclude any goodwill or other
intangible assets other than claims against debtors
and pre-payment of expenses;
10.1.5 reflect any stock on hand at not more than the lowest
of cost, net realisable value (due account being
taken for slow moving, damaged, redundant and
obsolescent stock) and the value determined on the
basis applied in the preparation of the audited
financial statements of the BUSINESS in respect of
previous years;
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10.1.6 reflect fixed assets at the original cost thereof to
the BUSINESS, less accumulated depreciation
calculated at the rates and on the basis previously
applied to the BUSINESS' fixed assets.
10.1.7 be delivered to the PURCHASER by the SELLER as soon
as they have been prepared and signed, but in any
event within 30 days from the DATE HEREOF;
10.2 The PURCHASER shall be entitled, at its own cost, to cause the
PURCHASER'S auditors to investigate and verify all or any part
of the EFFECTIVE DATE ACCOUNTS. Any differences in regard to
the EFFECTIVE DATE ACCOUNTS between the SELLER'S auditors on
the one hand and the PURCHASER'S auditors on the hand shall be
determined MUTATIS MUTANDIS in accordance with the dispute
resolution provisions contained in this agreement.
11. ADJUSTMENT ACCOUNT
11.1 The SELLER shall at its own expense cause to be prepared an
adjustment account, which account, duly certified by the
SELLER'S auditors, shall be delivered by the SELLER to the
PURCHASER simultaneously with the EFFECTIVE DATE accounts.
Such adjustment account shall reflect :-
11.1.1 all insurance premiums, licences and other expenses
of the BUSINESS prepaid by the SELLER as at the
EFFECTIVE DATE;
11.1.2 all amounts (if any) as are held on behalf of the
BUSINESS in respect of deposits for electricity and
water charges and the like as at the EFFECTIVE DATE;
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11.1.3 all accrued charges as shall be owing by the BUSINESS
as at close of business on the day immediately
preceding the EFFECTIVE DATE in respect of any period
prior to the EFFECTIVE DATE;
11.2 In the said adjustment account the SELLER'S auditors shall
debit the PURCHASER with those amounts referred to in clause
11.1.1 and 11.1.2 and shall credit the PURCHASER with those
amounts referred to in clause 11.1.3.
11.3 The net amount due to the PURCHASER or the SELLER in terms of
the adjustment account shall be paid as follows :-
11.3.1 if due by the PURCHASER, within 7 (seven) days of the
date of delivery of the adjustment account, failing
which the PURCHASER shall pay interest on the amount
so due at the prime rate calculated from the date of
delivery of the adjustment account until the date of
payment of the amount due;
11.3.2 if due by the SELLER, on the date of delivery of the
adjustment account, failing which the SELLER shall
pay interest on the amount so due at the prime rate
calculated from the date of delivery of the
adjustment account until the date of payment of the
amount due.
12. LIABILITIES
Save for the LIABILITIES stipulated in Annexure "B" hereto, for which
LIABILITIES the PURCHASER shall be liable :-
12.1 the BUSINESS and the ASSETS are sold free of LIABILITIES as at
the EFFECTIVE DATE;
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12.2 the SELLER shall be liable for and undertakes to pay all the
LIABILITIES of the BUSINESS, the cause of action which accrued
before the EFFECTIVE DATE and the SELLER and XXXXXXXX do
hereby jointly and severally indemnify the PURCHASER against
any claim which may be made against the PURCHASER in respect
of such LIABILITIES.
13. SECTION 34 OF INSOLVENCY ACT
The sale of BUSINESS provided for and envisaged in this agreement shall
be advertised as provided for and envisaged in Section 34 of the
Insolvency Act by the PURCHASER and at the PURCHASER'S expense.
14. DEBTORS
14.1 The PURCHASER shall attend to collection of all debts due to
the BUSINESS on the EFFECTIVE DATE, using its normal debt
collection procedures.
14.2 In the event of any debts due to the BUSINESS on the EFFECTIVE
DATE not having been recovered in full within 120 (one hundred
and twenty) days from the CLOSING DATE the PURCHASER shall
procure that the rights of the BUSINESS to all such amounts
still outstanding are ceded to the SELLER who shall be
obliged, against such cession, to pay to the BUSINESS the
capital amount outstanding in respect of such debts.
15. STAFF (PRIVATE)
The PURCHASER shall, with effect from the CLOSING DATE, offer
employment to all 11 (eleven) of the employees who were employed in the
BUSINESS as at the EFFECTIVE
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DATE and who are still so employed on the CLOSING DATE on terms and
conditions that are on the whole not less favourable to the employees
than those on which they were employed by the SELLER as envisaged in
terms of Section 197(3)(a) of the Labour Relations Act 66 of 1995.
16. XXXXXXXX'X EMPLOYMENT
16.1 It is recorded that the employment by the PURCHASER of
XXXXXXXX for a minimum period of 3 (three) years is an
integral part of the transaction envisaged and provided for in
this AGREEMENT and fundamental thereto.
16.2 In the event that :-
16.2.1 XXXXXXXX terminates his contract of employment with
the PURCHASER; or
16.2.2 XXXXXXXX'X employment with the PURCHASER is lawfully
terminated by the PURCHASER in consequence of
misconduct on part of XXXXXXXX, and not in
consequence of a retrenchment by reason of a change
in operational circumstances;
at any time prior to the expiry of a minimum period of three
years from the EFFECTIVE DATE, then :-
(a) the PURCHASER shall be relieved from and shall have
no further liability to the SELLER for and in respect
of the discharge or payment of the purchase price in
terms of clause 8.2 and/or 8.3 outstanding as at the
date of such termination of XXXXXXXX'X employment;
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(b) any of the shares (common stock) issued in terms of
clause 8.2.2 above that have not become tradeable in
terms of clause 8.2.3(b) above as at the date of such
termination of XXXXXXXX'X employment shall be
forfeited by XXXXXXXX.
17. SELLER'S RESTRAINT OF TRADE
17.1 The SELLER agrees to a restraint of trade undertaking unto and
in favour of the PURCHASER to ensure that the SELLER will be
precluded from carrying on certain activities which would be
harmful to the BUSINESS of the PURCHASER and which would
result in the PURCHASER potentially suffering considerable
economic prejudice including loss of custom and goodwill.
17.2 The SELLER undertakes and warrants unto and in favour of the
PURCHASER, its successors-in-title and assigns that for a
period of 36 (thirty six) months from the EFFECTIVE DATE, it
will not directly or indirectly solicit or attempt to do
business with any of the clients that form part of the
business being acquired by the PURCHASER and that it will not
anywhere in the Republic of South Africa be directly or
indirectly interested in, engaged, concerned or associated
with, whether as proprietor, partner, shareholder, consultant,
contractor, financier, principal, agent, representative,
assistant, advisor, administrator or otherwise in any company,
close corporation, firm, business undertaking, concern or
other association of any nature which directly or indirectly
carries on the same or similar business as that forming the
subject matter of THIS AGREEMENT and/or conducted by the
PURCHASER.
18. ASSUMPTION AND ASSIGNMENT OF RIGHTS AND OBLIGATIONS
18.1 The SELLER hereby cedes, assigns and transfers its right,
title, interest and obligations in and to the the assumed
rights and obligations to the
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PURCHASER and the PURCHASER hereby accepts such assignment and
assumes the rights and obligations of the SELLER arising from
and related thereto.
18.2 In the event that any consent or undertaking of any third
party is a prerequisite or requirement of a legally effective
and enforceable assignment and/or assumption contemplated
hereunder, the SELLER shall seek such consent or undertaking
and the SELLER and the PURCHASER hereby agree to enter into
and sign all documents reasonably necessary to give effect to
the assignment or assumption referred to herein.
18.3 If the SELLER is unable to procure such assignment, then inter
partes the PURCHASER shall be entitled to the benefit of all
such agreements and shall comply with the SELLER'S obligations
thereunder on the SELLER'S behalf.
18.4 The PURCHASER hereby undertakes to perform all obligations
assumed hereunder and hereby indemnifies and holds the SELLER
harmless against any and all claims, damages or costs arising
in respect thereof.
19. WARRANTIES
19.1 The SELLER and XXXXXXXX jointly and severally gives and makes
to the PURCHASER the warranties, undertakings and
representations ("THE WARRANTIES") set out in Annexure "F" on
the basis that this agreement is entered into by the PURCHASER
relying on the WARRANTIES, each of which is:-
19.1.1 deemed to be a representation of fact inducing the
PURCHASER to enter into this AGREEMENT; and
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19.1.2 presumed to be material unless the contrary is
proved.
19.2 Insofar as any of THE WARRANTIES is promissory or relates to a
future event, it shall be deemed to have been given as at the
due date of fulfillment of the promise or for the happening of
the event, as the case may be.
20. INDEMNITIES
20.1 Without prejudice to any of the rights of the PURCHASER
arising from any of the other provisions of this AGREEMENT,
the SELLER and XXXXXXXX hereby jointly and severally indemnify
and hold the PURCHASER harmless against all loss, liability,
damages (including consequential damages) or expense which the
PURCHASER may suffer as a result of or which may be
attributable to :-
20.1.1 any material breach of any of THE WARRANTIES set out
in Annexure "F" hereto;
20.1.2 any liabilities of THE BUSINESS whether actual,
potential or contingent, arising prior to the
EFFECTIVE DATE (which liabilities and contingent
liabilities shall include any liability for assessed
or unassessed taxation) not fully or adequately
provided for in the EFFECTIVE DATE ACCOUNTS;
20.1.3 any claims or liabilities (including, but without
limitation, claims or liabilities in consequential
loss) as a result of any breach of any contract if
such breach occurred before the EFFECTIVE DATE to the
extent that they are not brought to account as a
liability or not fully or adequately provided for in
the EFFECTIVE DATE ACCOUNTS;
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20.1.4 any disputes or litigation, if the cause of action of
such dispute or litigation arose before the EFFECTIVE
DATE, or that portion of the contract to which the
dispute or litigation relates was carried out before
the EFFECTIVE DATE, and notwithstanding that such
contracts may have been completed, to the extent that
the loss, liability, damage or expense was not
brought to account as a liability or was not fully or
adequately provided for in the EFFECTIVE DATE
ACCOUNTS.
20.1.5 All tax and stamp duty and other penalties and
interest of every nature which may be levied upon or
become payable by the PURCHASER as owner of the
BUSINESS or by the BUSINESS as a result of re-opening
by the South African Revenue Services of any tax
assessment of any nature whatever for any period up
to and including the EFFECTIVE DATE or the
disallowance of any expenditure claimed in the
EFFECTIVE DATE accounts. This shall apply MERO MOTU
to VAT, PAYE, UIF, Worksmen's Compensation, Skills
Development Levies, RSC Levies and the like.
20.2 If any claim is made against THE BUSINESS in respect of any of
the matters referred to in clause 20.1 and the liability or
claim has not been reflected or provided for, whether
adequately, fully or at all in the EFFECTIVE DATE ACCOUNTS,
then :-
20.2.1 the PURCHASER shall without delay give written notice
to the SELLER of such claim to enable the SELLER
either to discharge timeously and without cost to the
PURCHASER or THE BUSINESS or to take steps to resist
the claim; and
20.2.2 the SELLER shall be entitled to resist such claim in
the name of THE BUSINESS, provided that :-
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(a) the proceedings in regard thereto shall be
controlled jointly by the PURCHASER and the
SELLER at the SELLER'S entire expense; and
(b) the SELLER and XXXXXXXX, jointly and
severally indemnify the PURCHASER and THE
BUSINESS against all costs (including, but
without limitation, party and party costs
and costs as between an attorney and his own
client) which may be incurred as a
consequence of such proceedings; if so
required by the PURCHASER, the SELLER and/or
XXXXXXXX shall provide the PURCHASER with a
guarantee or letter of undertaking in a form
acceptable to the PURCHASER providing for
the due payment of all such costs.
21. SURETYSHIP
21.1 XXXXXXXX hereby binds himself in favour of the PURCHASER as
surety for and co-principal debtor in solidum with the SELLER
for the due and punctual performance by the SELLER of all the
SELLER'S obligations and the discharge of any of the SELLER'S
liability to the PURCHASER pursuant to this agreement. This
suretyship shall remain of full force and effect and binding
on XXXXXXXX notwithstanding :-
21.1.1 any amendment of this agreement and/or any other
agreement for the time being in existence between the
parties;
21.1.2 any indulgence, concession, leniency or extension of
time which may be shown or given by the PURCHASER to
the SELLER;
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21.1.3 the receipt by the PURCHASER of any dividends or
other benefits in any liquidation, judicial
management or other similar disability of the SELLER;
21.1.4 the termination of XXXXXXXX'X employment with the
PURCHASER for any reason whatsoever;
21.2 XXXXXXXX hereby renounces the benefits of the legal exceptions
NON NUMERATAE PECUNIAE, NON CAUSA DEBITI, ERRORI CALCULI, DE
DUOBUS VEL PLURIBUS RES DEBENDI, excussion and division, no
value received and revision of accounts, with the meaning and
effect all of which he declares himself to be fully
acquainted.
22. CONFIDENTIALITY
Each of THE PARTIES shall at all times use its best endeavours to keep
confidential (and to ensure that its employees and agents shall keep
confidential) any confidential information which it has acquired or may
acquire in relation to this agreement, save for any information :-
22.1 which is publicly available or becomes publicly available
through no act or default of such party; or
22.2 which was in the possession of such party prior to its
disclosure in terms of THIS AGREEMENT otherwise than as a
result of any breach by any party of any obligation of
confidentiality owed to any of the other parties, whether
pursuant to THIS AGREEMENT or otherwise; or
22.3 which is disclosed to such party by a third party who did not
acquire the information under any obligation of
confidentiality; or
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22.4 which is independently acquired by such party as a result of
work carried out by a person to whom no disclosure of such
information has been made;
and shall not use or disclose such information except with the consent
of the other parties or in accordance with an order of court of
competent jurisdiction or in order to comply with any law or regulation
by which the party concerned is bound.
23. SUPPORT
THE PARTIES undertake that they will forthwith upon request do all such
things and sign all such documents as may be necessary to give effect
to the terms of THIS AGREEMENT and all transactions arising therefrom.
24. RESTRICTION ON ASSIGNMENT
No party shall be entitled to cede any of its rights or assign any of
its obligations in terms of THIS AGREEMENT without the written consent
of all the other parties to THIS AGREEMENT.
25. DIVISIBILITY
Notwithstanding the manner in which the clauses of this AGREEMENT have
been grouped together or linked, each of them constitutes a separate
and independent clause, severable from each of the other clauses in
regard to all aspects thereof. Accordingly, should one or more of the
clauses be declared unenforceable, the remaining clauses shall continue
to be and remain of full force and effect. For the purposes of this
AGREEMENT the term "CLAUSE" shall mean and include all sub-clauses of
this AGREEMENT.
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26. BREACH
26.1 Should a party ("THE DEFAULTING PARTY") commit a breach of any
of the conditions of THIS AGREEMENT and fail to remedy such
breach after having received 10 (ten) days written notice
thereto from the other party ("THE NON-DEFAULTING PARTY"), the
following provisions shall apply :-
26.1.1 if the breach by the defaulting party is a material
breach of the provisions of THIS AGREEMENT, the
non-defaulting party shall be entitled to cancel THIS
AGREEMENT without prejudice to any other claim which
the non-defaulting party might in law have against
the defaulting party;
26.1.2 if the breach is not a material breach of the
provisions of THIS AGREEMENT, the non-defaulting
party shall be entitled to any remedy available in
law to the non-defaulting party;
27. DOMICILIA AND NOTICES
27.1 Any notices to be given to THE PARTIES in terms of THIS
AGREEMENT shall be in writing an delivered by hand during
normal business hours or posted by pre-paid registered post
during normal business hours or dispatched by telefacsimile to
the addresses mentioned hereunder, which respective addresses
THE PARTIES choose as their domicilia citandi et executandi
for the delivery or service of all notices, communications or
legal processes arising out of THIS AGREEMENT :
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27.1.1 THE PURCHASER: St Xxxxx Square Xxx Xxxxxxxxx Xxxx
Xxxxx Xxxx Xxxx Xxxxxxx Xxxxx
Xxxxxx FAX: (000) 000-0000
27.1.2 THE SELLER: c/o Xxxxxxxxx - Xxxxxx Inc. 0xx
Xxxxx - Xxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
XXXXXXXX
FAX: (000) 000-0000
27.1.3 XXXXXXXX: c/o Xxxxxxxxx - Xxxxxx Inc.
0xx Xxxxx - Xxxxxxx Xxxxx
000 Xxxxxx Xxxxxx
XXXXXXXX
FAX: (000) 000-0000
or such other addresses in the Republic of South Africa as any
party may choose by written notice to the others from time to
time.
27.2 Every notice shall be deemed to have been properly given, in
the absence of proof to the contrary :-
27.2.1 if delivered by hand, on the date of delivery;
27.2.2 if sent by pre-paid registered post, 10 (ten) days
after the date on which the notice is posted;
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27.2.3 if sent to a party at its telefax number, on the date
of transmission where it is transmitted during normal
business hours of the receiving instrument, and on
the next business day where it is transmitted outside
those business hours, in either event provided that
it has been confirmed by registered letter posted no
later than the business day immediately following the
date of transmission.
27.3 Notwithstanding anything to the contrary herein contained, a
written notice or communication actually received by any party
from any other shall be an adequate written notice or
communication to such receiving party notwithstanding that it
was not sent to or delivered at that party's chosen domicilium
citandi et executandi.
28. DISPUTE RESOLUTION
28.1 Should any dispute or difference arise between the PARTIES in
relation to the implementation, execution, termination or
interpretation of this AGREEMENT, or any aspect or issue
pursuant to this AGREEMENT or for any other reason whatsoever
which difference or dispute cannot be resolved amicably
between the PARTIES such dispute or difference shall be
referred to mediation on an informal basis by a facilitator
appointed by the Chairman for the time being of the
Arbitration Foundation of South Africa ("AFSA").
28.2 The facilitator shall attend to assist the parties in arriving
at a settlement and, if no settlement is reached, the
facilitator shall submit to the PARTIES a settlement proposal
which he considers to be equitable to both parties and efforts
to reach a settlement shall continue until a settlement is
reached or one of the parties withdraws from the mediation
process or the facilitator concludes and informs the PARTIES
that further efforts will be to no avail.
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28.3 In the event of a settlement being reached, the facilitator
shall draft a written settlement agreement incorporating all
the settlement terms and, if acceptable to the parties, shall
have the same formally signed by or on behalf of the parties.
28.4 Should any difference or dispute between the parties as
envisaged in clause 28.1 prove incapable of being resolved by
mediation such difference or dispute shall then be referred
to, dealt with and adjudicated upon by way of arbitration
under the auspices of AFSA and subject to and in terms of
AFSA's rules and regulations of and for arbitration.
29. GENERAL
29.1 No alteration, cancellation, variation of, or addition hereto
shall be of any force or effect unless reduced to writing and
signed by the parties to this agreement or their duly
authorised representatives.
29.2 Subject to clause 29.1 above, this document together with
annexures and schedules contains the entire agreement between
the parties and neither party shall be bound by any
undertakings, representations or warranties not recorded
herein.
29.3 No indulgence, leniency or extension of time which any party
("THE GRANTOR) may grant or show to the other, shall in any
way prejudice THE GRANTOR or preclude THE GRANTOR from
exercising any of its rights in the future.
29.4 THIS AGREEMENT shall be subject to and be interpreted in
accordance with the Law of the Republic of South Africa and
the PARTIES agree to the jurisdiction of the High Court of
South Africa with regard to any dispute arising from or in
consequence of THIS AGREEMENT.
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29.5 It is agreed and recorded that the PURCHASER shall not assume
any duty or obligation which the SELLER may have in respect of
the rental of the PREMISES. The PURCHASER shall rent the
PREMISES from the landlord on a month to month basis and
subject to one month's reciprocal written notice at the vat
inclusive rental of R_____________.
30. COSTS
Each party shall bear its own costs in connection with the negotiation,
drafting, settlement and signature of THIS AGREEMENT.
31. LAW AND JURISDICTION
THIS AGREEMENT shall be subject to and be interpreted in accordance
with the Law of the Republic of South Africa and the PARTIES agree to
the jurisdiction of the High Court of South Africa, Witwatersrand Local
Division.
32. INTERPRETATION
32.1 In this agreement, unless the context requires otherwise -
32.1.1 words importing any one gender shall include the
other two genders;
32.1.2 the singular shall include the plural and vice versa;
32.1.3 a reference to natural persons shall include created
entities (corporate or unincorporated) and vice
versa.
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32.2 In this agreement, the headings have been inserted for
convenience only and shall not be used for nor assist or
affect its interpretation.
SIGNED at JOHANNESBURG this the 7TH day of JUNE 2004 in the presence of the
undersigned witnesses:
AS WITNESSES:
1. XXXXXX NYSSCHEN
--------------------------------------
for and on behalf of THE PURCHASER
2.
SIGNED at JOHANNESBURG this the 3RD day of JUNE 2004 in the presence of the
undersigned witnesses:
AS WITNESSES:
1. XXXXXXX XXXXX XXXXXXXX
--------------------------------------
for and on behalf of THE SELLER
2.
SIGNED at JOHANNESBURG this the 3RD day of JUNE 2004 in the presence of the
undersigned witnesses:
AS WITNESSES:
1. XXXXXXX XXXXX XXXXXXXX
--------------------------------------
XXXXXXX XXXXX XXXXXXXX
2.
