1
SUBSCRIPTION AGREEMENT
between
XXXXXX CONSOLIDATED INVESTMENTS LIMITED
and
SOFTLINE LIMITED
and
THE PERSONS IDENTIFIED IN SCHEDULE 1 HERETO
2
TABLE OF CONTENTS
Page No.
1. INTERPRETATION 3
2. INTRODUCTION 7
3.CONDITIONS PRECEDENT 7
4.SUBSCRIPTION FOR SHARES 9
5. NO WARRANTIES 10
6.BOARD OF DIRECTORS 10
0.XXXXXX POOL 10
8.DISPOSITION OF SHARES 11
9.FREEDOM TO DISPOSE OF
SHARES TO MEMBERS OF THE
SAME GROUP 15
10.BREACH 17
11.ARBITRATION 17
12.TRANSACTIONS INDIVISIBLE 19
13.STATEMENT OF INTENTION 19
00.XXXXX ANNOUNCEMENTS 19
15.MISCELLANEOUS MATTERS 20
16.COUNTERPART 24
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1.INTERPRETATION
1.1 In this agreement, unless the context clearly indicates a contrary
intention, the words hereinbelow defined shall have the meanings assigned to
them, and cognate expressions shall bear corresponding meanings.
1.1.1"Agreement" means this agreement;
1.1.2 "Business Day" means any day other than a Saturday, Sunday or official
public holiday in the Republic of South Africa;
1.1.3"Board" means the board of directors of the Company as constituted from
time to time;
1.1.4"Closing Date" means 18 November 1997, or such other date after the
fulfilment of the Conditions as may be agreed upon by the Parties in writing;
1.1.5"Company" means Softline Limited, registration number 77/02304/06, a
company incorporated with limited liability in accordance with the Company
Laws of the Republic of South Africa;
1.1.6"Conditions" means the conditions precedent recorded in clause 3;
1.1.7"HCI" means Xxxxxx Consolidated Investments Limited, registration number
73/07111/06, a company incorporated with limited liability in accordance with
the Company Laws of the Republic of South Africa;
1.1.8"Parties" means the signatories to this agreement;
1.1.9"Renunciation Agreement" means a written agreement, to be entered into
between HCI, SVI and the Company at approximately the same time as this
Agreement, in terms of which SVI is to renounce in favour of HCI all its
right, title and interest in and to 22 130 448 fully paid up shares in the
capital of the Company which the Company has agreed to issue and allot to SVI
in terms of the Share Swap Agreement;
1.1.10"Sale Agreement" means an agreement, to be entered into between HCI
and SVI at approximately the same time as this Agreement, in terms of which
HCI has agreed to purchase from SVI, which has agreed to sell to HCI, 20 000
000 shares in the capital of the Company ranking pari passu in all respects
with each of the other issued ordinary shares in the capital of the Company
for a purchase consideration of R30 000 000,00;
1.1.11"Shareholders" means each of the persons identified in Schedule 1
hereto.
1.1.12"Share Swap Agreement" means a written agreement to be entered into
between SVI and the Company at approximately the same time as this Agreement,
in terms of which the Company has agreed to issue to SVI certain fully paid up
ordinary shares in the capital of the Company in return for certain fully paid
up ordinary shares in the capital of SVI;
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1.1.13"Subscription Shares" means the 25 763 097 ordinary shares in the
capital of the Company for which HCI is to subscribe in terms of clause 4
hereof;
1.1.14"SVI" means SVI Holdings Inc.;
1.1.15"SVI Shares" means the shares to be acquired by HCI in terms of the
Sale Agreement and the Renunciation Agreement;
1.1.16"Voting Pool Agreement" means the voting pool agreement entered into
by the Shareholders in terms of which the Shareholders have regulated the
voting rights attaching to their shares in the Company and their rights to
dispose of those shares.
1.2 Words importing the singular shall include the plural and vice versa.
1.3 Words importing the masculine gender shall include the other genders and
vice versa and natural persons shall include juristic persons and vice versa.
1.4 The headings to paragraphs of this agreement are inserted for purposes of
reference only and shall not affect the interpretation of any provisions to
which they relate.
1.5 In the event that any definition in this clause 1 contains substantive
provisions, then such provisions shall be given effect to as if same were
incorporated into the main body of this agreement.
1.6 When any number of days of prescribed in this agreement, same shall be
reckoned exclusively of the first and inclusively of the last day, unless the
last day falls on a Saturday, Sunday or official public holiday in South
Africa in which event the last day shall be the next succeeding day which is
not a Saturday, Sunday or official public holiday in South Africa.
1.7The terms and conditions of this Agreement shall be binding upon, and
shall inure for the benefit of, the Parties and their permitted assigns and
successors-in-title.
2.INTRODUCTION
2.1 Subject to the fulfilment of the Conditions, HCI wishes to acquire and
subscribe for the Subscription Shares.
2.2The purpose of this agreement is to regulate the terms and conditions
upon which HCI is to acquire and subscribe for, and the Company is to allot
and issue, the Subscription Shares.
3.CONDITIONS PRECEDENT
3.1This agreement is subject to the fulfilment of the following conditions
precedent which the Parties contemplate shall occur concurrently with the
consummation of this Agreement -
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3.1.1 the written approval of the Johannesburg Stock Exchange having been
obtained, insofar as may be necessary, for the transaction referred to in this
agreement and relevant transactions and documentation flowing therefrom;
3.1.2 the publication of a press announcement giving full details of the
subscription as contemplated in paragraph 5.90 of the Johannesburg Stock
Exchange Listing Requirements.
3.1.3 the conclusion of the Sale Agreement;
3.1.4 the conclusion of the Renunciation Agreement and the due fulfilment of
the Conditions Precedent contained therein;
3.1.5 the Shareholders procuring the sale of 2 954 972 shares in the Company
to HCI at R1,60 per share, such that after the implementation thereof, and the
implementation of this Agreement, the Renunciation Agreement and the Sale
Agreement, HCI will hold 25% (twenty five percent) of the issued share capital
of the Company;
3.1.6 all the intended Parties agreeing to be bound by the terms of this
agreement. The obligations and liabilities of Hi-Score Investment Holdings
(Pty) Ltd and Xxxxxxx Industries Ltd shall be restricted to those arising from
clauses 3.1.5, 7, 8 and 9 of this Agreement
3.2 If the Conditions are not fulfilled by 18 November 1997, or by such
later date as shall have been agreed to by the Parties in writing prior to
that date,this agreement shall cease to be of any further force or effect and
the Parties shall be restored as near as may be possible to the position in
which they would have been had this agreement not been entered into. The
Parties shall not have any claims against each other as a result of such
non-fulfilment of the Conditions except for such claims, if any, as may result
from a deliberate frustration by a Party of the fulfilment thereof.
4.SUBSCRIPTION FOR SHARES
4.1 At 10h00 on the Closing Date representatives of the Company and HCI
shall meet at the offices of Fluxman Xxxxxxxxxx - Xxxxxxxx Xxxxxx and at such
meeting
-
4.1.1 HCI shall subscribe for the Subscription Shares and the execution of
this Agreement on behalf of HCI shall be deemed sufficient application for
that purpose.
4.1.2 the Subscription Shares shall be issued at a subscription price of
R1,55 per share ("the Subscription Price");
4.1.3 HCI shall pay the Subscription Price to the Company against delivery of
the Subscription Shares; and
4.1.4 the Company shall, against payment of the Subscription Price, allot,
issue and deliver the Subscription Shares to HCI.
4.2 Each of the Subscription Shares shall rank pari passu in all respects
with each of the existing issued ordinary shares in the capital of the
Company.
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0.XX WARRANTIES
It is recorded that the Shareholders do not give any warranties, express or
implied, in respect of the Shares other than those expressly recorded, and
applicable to each of them respectively, herein.
6.BOARD OF DIRECTORS
The Shareholders shall procure the appointment of Xxxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxxx as directors of the Board with effect from the
Closing Date.
0.XXXXXX POOL
7.1 On the Closing Date the Voting Pool Agreement shall be deemed to have
been cancelled.
7.2 For so long as HCI owns not less than 10 000 000 (ten million) shares in
the issued capital of the Company, each of the Shareholders irrevocably
undertakes in favour of HCI not to enter into any agreement or arrangement
with any of the other Shareholders which will or may have the effect of
regulating the voting rights attaching to their shares in the Company without
the prior written consent of HCI; except as set forth in clause 6 above.
8.DISPOSITION OF SHARES
8.1 For so long as HCI is a shareholder in the Company neither HCI nor any
of the Shareholders shall sell, transfer, pledge or otherwise dispose of all
or any of their shares in the Company except in accordance with the following
procedures and subject to the provisions of this clause :
8.1.1 Before transferring its shares, or any of them, in the Company (such
shares being hereinafter referred to as "the Offered Shares") the party
proposing to transfer the same ("the Disponer") shall give written notice by
facsimile ("the Transfer Notice") that it proposes transferring the Offered
Shares -
8.1.1.1 to HCI and the Company if the Disponer is one or more of the
Shareholders;
8.1.1.2 to the Shareholders, c/o the Company if the Disponer is HCI;
("the Recipient");
8.1.2 the Transfer Notice shall -
8.1.2.1 in the case of Nedcor Bank Ltd specify the price which the Disponer
requires for the Offered Shares which shall be expressed in South African
currency, or shall be expressed to be the market price from time to time;
8.1.2.2 in the case of any of the Shareholders specify the price which the
Disponer requires for the Offered Shares which shall be expressed in South
African currency; ("the Required Price");
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8.1.2.3 specify the payment terms upon which the Disponer is prepared to
sell the Offered Shares;
and once given shall not be revocable except with the consent of the
Recipient;
8.1.3 for a period of 3 (three) Business Days immediately following the
receipt or deemed receipt of the Transfer Notice, HCI, if one of the
Shareholders is the Disponer, or the Shareholders, if HCI is the Disponer,
shall have the right and option to purchase the Offered Shares at the Required
Price and on the terms and conditions specified in the Transfer Notice, which
right -
8.1.3.1 shall be exercisable by written notice to HCI, if HCI is the
Disponer, or to the Company, if one of the Shareholders is the Disponer, given
and received within the said period;
8.1.3.2 shall, if duly exercised, give rise to a sale and purchase of the
Offered Shares at the price and on the other terms and conditions contained in
the Transfer Notice; provided that a Recipient shall have no claim or
entitlement to ownership of the Offered Shares unless it shall have tendered
payment in accordance with the terms of the Disponer's offer;
8.1.3.3 shall, subject to clause 8.1.5, if not so exercised by any
shareholder, lapse and fall away;
8.1.4 If HCI is the Disponer, the right and option referred to in clause 8.1.3
may be exercised by the Recipients -
8.1.4.1 jointly by way of a single notice to the Disponer signed by all the
Recipients, in which event the Recipients shall be deemed to purchase the
Offered Shares pro rata to their existing shareholdings in the Company or in
such other proportions, if any, as may be agreed between them in writing;
8.1.4.2 separately, provided that in the event of competition, regardless of
the fact that each of the Recipients or any of them may have purported to
exercise the option in respect of all the Offered Shares or in respect of a
greater proportion of the Offered Shares than that attributable to their
existing shareholdings in the Company, the Recipients shall be deemed to
purchase the Offered Shares in proportion to their existing shareholdings in
the Company.
8.1.5 If the Offered Shares shall not be purchased in their entirety, the
Disponer shall have the right, on written notice given to those Recipients who
had exercised the option, to treat the option as though it had been declined
if such Recipients do not give notice of their intention to purchase the
remaining Offered Shares in accordance with this clause 8. Should the
Disponer wish to exercise its rights in terms of this clause 8.1.5 it shall do
so by giving the written notice to the relevant Recipient within 7 (seven)
days after the lapse of the option;
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8.1.6 Should the said option not be exercised, or be deemed to have been
declined or, should same have been exercised in part and the Disponer have
exercised his election in clause 8.1.5, the Disponer shall be free at any time
within 1 (one) week after the elapse of the said option period to transfer the
Offered Shares, or the remaining portion thereof, as the case may be, to any
person on a bona fide sale at a price not being less than the Required Price
and on not more favourable terms and conditions than those contained in the
Transfer Notice; provided that -
8.1.6.1 the Recipient/s may require to be satisfied in such manner as
it/they may reasonably require that the interest offered is being transferred
in pursuance of a bona fide sale for the consideration stated in the Transfer
Notice without any deduction, rebate or allowance whatsoever, and if not so
satisfied may refuse to register the instrument of transfer; and
8.1.6.2 if the Disponer shall have exercised his rights in terms of clause
8.1.4, he shall not be entitled to conclude a sale with a third party unless
the third party agrees to purchase, and purchases, all the Offered Shares.
8.2 For the purposes of clause 8.1, the term "transfer" shall in addition to
its ordinary meaning, mean "sell, alienate or otherwise dispose of".
8.3 The terms of this clause 8 shall cease to apply at any time that HCI
owns less than 50 000 000 (fifty million) share in the issued share capital of
the Company.
9. FREEDOM TO DISPOSE OF SHARES TO MEMBERS OF THE SAME GROUP
9.1 Subject to the remaining provisions of this clause 9 notwithstanding
anything else to the contrary contained in this Agreement, a member of the
Company ("Transferor Member") shall be entitled to freely dispose of its
entire Shareholding (and not only a portion thereof) to any company ("the
Permitted Transferee") which is a member of the same "Group" as such
Transferor Member.
For the purpose of this clause 9, "Group" means -
9.1.1 any two or more companies which are subsidiaries of the same holding
company or one of which is the subsidiary of the other; plus
9.1.2 such holding company, and "holding company" and "subsidiary" shall
respectively have the meanings contemplated in the Companies Act No. 61 of
1973.
9.2 No shares shall be disposed of in terms of this clause 9 unless prior to
such disposal, the Permitted Transferee in writing undertakes to all the
members of the Company, other than the Transferor member, to be bound by the
provisions of this Agreement.
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9.3 If a Permitted Transferee holds shares in the Company at a time when
such Permitted Transferee ceases to be a subsidiary or holding company of the
Transferor Member, any one or more of the other members of the Company shall
be entitled at any time to require the Transferor Member in question and such
Permitted Transferee to ensure that the shares held by the Permitted
Transferee are transferred back to the Transferor Member or, at the election
of the Transferor Member, to any subsidiary or holding company of such
Transferor Member.
10.BREACH
Should any Party ("the Breaching Party") fail to comply with any of its
obligations under this agreement and persist in such failure for a period of
14 (fourteen) days after the date of receipt of written notice from any other
Party ("the Innocent Party") requiring the Breaching Party to carry out the
obligation in question, then and in such event the Innocent Party shall be
entitled (in addition to and without prejudice to any other rights available
at law) either to cancel this agreement or to enforce performance of the terms
hereof, in either event without prejudice to its right to claim and recover
such damages as it may be able to prove it has sustained.
11.ARBITRATION
11.1 Should any dispute arise between the parties in regard to -
11.1.1 the interpretation ;
11.1.2 the effect ;
11.1.3 a breach;
11.1.4 the termination of
11.1.5 any matter arising out of the termination;
of this agreement, that dispute shall be decided by arbitration before a
single arbitrator in the manner set out in this clause 11.
11.2 The arbitrator shall be appointed by the parties and failing agreement,
shall be appointed by the President of the Arbitration Foundation of South
Africa ("AFSA").
11.3 The arbitration shall be held at Sandton in the Republic of South
African in accordance with the rules of AFSA.
11.4 The arbitration shall be held as quickly as possible after it is
demanded with a view to it being completed within 90 (ninety) days after it
has been so demanded.
11.5 This clause is severable from the rest of the agreement and shall,
therefore, remain in effect even if this agreement is terminated.
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11.6 Notwithstanding the place of execution or performance of this agreement
or the domicile of the parties hereto, this agreement and all modifications
and amendments hereof shall be governed by and construed under and in
accordance with the Laws of the Republic of South Africa.
12.TRANSACTIONS INDIVISIBLE
All transactions and arrangements contained in or contemplated by this
Agreement
constitute a single and indivisible transaction.
13.STATEMENT OF INTENTION
The Parties undertake at all times to do all such things as may be open to
them and necessary for or incidental to the putting into effect or maintenance
of the terms, conditions and/or import of this Agreement, save where any
particular provision contained in this Agreement imposes upon any one or other
Party the obligation (to the exclusion of the other Party) to do any act,
matter or thing, in which event it shall not be the obligation of all the
Parties (by the inclusion of this clause in this Agreement) to procure the
doing of such act, matter or thing, but it shall only be the obligation of the
Party who is specifically directed thereto.
00.XXXXX ANNOUNCEMENTS
None of the Parties shall publish to any third party the fact of or any
information concerning the conclusion of this Agreement without the written
consent of each of the others of them, save for any publication required by
the Johannesburg Stock Exchange (and then only after full consultation with
each of the other Parties) or save as required by law or to implement this
Agreement.
15.MISCELLANEOUS MATTERS
15.1 Postal address
15.1.1 Any written notice in connection with this agreement may be
addressed -
15.1.1.1 in the case of HCI to :
address :P O Xxx 0000
Xxxx Xxxx
0000
telefax no :(021) 262-777
and shall be marked for the attention of :
Xxxx Xxxxxxx;
15.1.1.2 in the case of the Company to :
address :P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Xxxx Xxxxxxx.
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15.1.1.3 in the case of the Shareholders to :
address :P O Box 76182
Wendywood, 2144
telefax no :(011) 444-7233
and shall be marked for the attention of :
Xxxx Xxxxxxx.
15.1.2 Any Party may change that Party's address or telefax number for this
purpose to any other postal address or telefax number in the Republic of South
Africa, on written notice to the other Parties.
15.1.3 A notice sent to any Party at its address of telefax number provided
in terms of clause 15.1.1 or clause 15.1.2 shall, unless the contrary is
proved,
be deemed to have been duly given :
15.1.3.17 (seven) days after posting, if posted by registered post to the
Party's address in terms of this sub-clause;
15.1.3.2 on delivery, if delivered to the Party's physical address in terms
of either this sub-clause or the next sub-clause dealing with service of legal
documents;
15.1.3.3 on despatch, if sent to the Party's then telefax number and
confirmed by registered letter posted no later than the next business day.
15.2 Address for service of legal documents
15.2.1 The Parties choose the following addresses at which documents in
legal proceedings in connection with this agreement may be served (i.e. their
domicilium citandi et executandi) :
15.2.1.1 in the case of HCI:
address :5th Floor, 000 Xxxxxx Xxxxxxxx
Xx Xxxxxx'x Xxxx
Xxxx Xxxx.
15.2.1.2 in the case of the Company:
address :Softline House
00 Xxxxxxxx Xxxxxxxx
Xxxxxxxx Ext. 13
Sandton, 2148
15.2.1.3 in the case of the Shareholders :
address :c/o Xxxx Xxxxxxx
Softline House
00 Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxx. 00
Xxxxxxx, 0000.
15.2.2 any Party may change that Party's address for this purpose to
another physical address in the Republic of South Africa, by notice in writing
to the other Parties.
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15.3 Entire contract
This agreement contains the entire understanding between the Parties and all
the express provisions agreed on by the Parties relating to the subject matter
of the agreement and the Parties waive the right to rely on any express
provisions not contained in this agreement.
15.4 Variation and cancellation
No agreement varying or cancelling this agreement shall be effective unless
reduced to writing and signed by or on behalf of all the Parties.
15.5 Waiver
No waiver by a Party of any right under this agreement shall be effective
unless reduced to writing and signed by or on behalf of such Party.
15.6 Indulgences
No indulgences granted by a Party shall constitute a waiver or abandonment of
that Party's rights under this agreement; accordingly, that Party shall not
be precluded, as a consequence of having granted such indulgence, from
exercising any rights against any other Party which may have arisen in the
past or which may arise in the future.
15.7 Cession
Except as specifically contemplated in this agreement, no Party may cede any
rights nor delegate any obligations in terms of this agreement without the
prior written consent of the other Parties.
15.8 Costs
15.8.1 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.
15.8.2 Each Party shall bear that Party's own legal costs of and incidental
to the negotiating, drafting, settlement and preparation of this Agreement.
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16.COUNTERPART
This Agreement may be executed in counterparts, each of which shall be deemed
an original and all of which together with constitute one document.
SIGNED at Johannesburg, South Africa on this the 21st day of October 1997.
for: XXXXXX CONSOLIDATED INVESTMENTS LIMITED
per: By: /s/ Xxxx Xxxxxxx
Director, duly authorised.
SIGNED at Johannesburg, South Africa, on this the 21st day of October 1997.
for: SOFTLINE LIMITED
per: By: /s/ Xxxx Xxxxxxx
Director, duly authorised.
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SCHEDULE 1
SCHEDULE OF SHAREHOLDERS
Domicilia
Xxxxxxx Industries Ltd
Xxxxxx Dos Xxxxxx
Nedbank Nominees Ltd
The Xxxxxxx Xxxxxx Family Trust
The Xxxx Xxxxx Family Trust
The Xxxxx Xxxxxxx Family Trust
Tower Hill International Corp
C.A.T. Trust
Sudash (Pty) Ltd
S.V.I. Holdings Inc
Xxxx Xxxxxxx Family Trust
Xxxxxx Xxxxx Family Trust
Xxxx Xxxxx Family Trust
