Exhibit 10.6
EXECUTION COPY
SHAREHOLDERS' AGREEMENT
between
PYRAMID FREIGHT (PROPRIETARY) LIMITED
and
THE TRUSTEES FOR THE TIME BEING OF THE UTi EMPOWERMENT TRUST
and
UTi SOUTH AFRICA (PROPRIETARY) LIMITED
------------------------------------------
LT
TABLE OF CONTENTS
1. Definitions and interpretation 4
2. Introduction 7
3. Effective Date 7
4. Characteristics of the Company 7
5. Financing 8
6. The Board and Board meetings 9
6.1 management to vest in Board 9
6.2 composition of Board 9
6.3 removal of directors 10
6.4 alternate director 10
6.5 vote of directors 10
6.6 managing director 10
6.7 chairman 11
6.8 matters of appointment and removal 11
6.9 right to call Board meeting 11
6.10 quorum 11
6.11 notice of meetings 11
6.12 frequency of meetings 12
6.13 venue of meetings 12
6.14 written resolutions 12
6.15 minutes 12
6.16 conflicts of interest 13
6.17 executive committee 13
7. Shareholders' meetings 14
7.1 quorum 14
7.2 resolutions in writing 14
8. Minority protection provisions 15
9. Dividend policy 15
10. Insurance 16
11. Rights of pre-emption 16
12. Compulsory offers for sale 19
13. The purchase price and transfer of shares 20
14. Change in empowerment charter and/or legislation 21
15. Restraint 24
16. Admission of new members 26
17. Financial information 26
18. Guarantees, suretyships and indemnities 27
19. Support 27
20. Conflict with articles of association 27
21. Confidentiality 28
22. Arbitration 28
22.2 identity of arbitrator 29
22.3 venue 30
22.4 procedures 30
22.6 costs and expenses 31
22.7 final and binding effect 31
22.8 consent 31
22.9 severability 31
22.10 injunctive relief 31
23. Miscellaneous matters 32
23.1 addresses and notices 32
23.2 entire contract 33
2.
23.3 no representations 33
23.4 variation, cancellation and waiver 33
23.5 indulgences 33
23.6 cession 34
23.7 applicable law 34
23.8 costs 34
23.9 severance 34
23.10 co-operation 34
23.11 no partnership or agency 34
23.12 counterparts 35
3.
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following words and phrases shall, unless the
contrary intention appears, have the following meanings:
1.1.1 "AFFILIATE" - in relation to any company means that
company's subsidiary or holding
company, or a subsidiary of that
company's holding company, and in
relation to a trust means any other
trust with the same beneficiaries and
same objects as the Empowerment Trust
and/or the entire interest in which is
held and beneficially owned by the
Empowerment Trust;
1.1.2 "THIS AGREEMENT" - means this Agreement and includes the
schedules and annexures to this
Agreement, if any;
1.1.3 "THE BOARD" - means the board of directors for the
time being of the Company;
1.1.4 "THE BUSINESS" - means the business carried on by the
business divisions acquired or to be
acquired by the Company from Pyramid
Freight in terms of a sale of business
agreement entered into or to be
entered into between the Company and
Pyramid Freight, namely the UTi
International Division, Sun Couriers
Division, Mounties Division and the
RDS Division and such other business
as the Company may carry on from time
to time;
1.1.5 "BUSINESS DAY" - means any day other than a Saturday,
Sunday or statutory public holiday in
the Republic of South Africa;
4.
1.1.6 "THE COMPANIES ACT" - means the Companies Act, 61 of 1973,
as amended;
1.1.7 "THE COMPANY" - means UTi South Africa (Proprietary)
Limited, a private company with
limited liability registered and
incorporated in accordance with the
laws of the Republic of South Africa
under registration number:
2004/015747/07;
1.1.8 "DATE OF SIGNATURE" - means the date on which this Agreement
is signed by all parties, and if
signed on different dates, then the
last of those dates;
1.1.9 "EFFECTIVE DATE" - means 1 August 2004;
1.1.10 "EMPOWERMENT TRUST" - means the UTi Empowerment Trust, a
trust registered in South Africa under
Master's reference number IT 6457/04;
1.1.11 "PYRAMID FREIGHT" - means Pyramid Freight (Proprietary)
Limited, a company with limited
liability registered and incorporated
in the British Virgin Islands and
registered as an external company in
accordance with the laws of the
Republic of South Africa under
registration number 1987/003687/10;
1.1.12 "RAND" and "R" - means the lawful currency of the
Republic of South Africa;
1.1.13 "SALE EVENT" - means any of the following:
5.
1.1.13.1 if a Shareholder is placed under
judicial management or a winding-up
order, whether voluntarily or
compulsorily, provisionally or finally
and in relation to a Shareholder which
is a trust shall include a procedure
equivalent to the above including the
termination or dissolution of the
trust; or
1.1.13.2 if a Shareholder commits a breach of a
material provision of this Agreement
and fails to remedy that breach within
30 days of written notice calling on
it to do so;
1.1.14 "THE SHAREHOLDERS" - means the shareholders for the time
being of the Company.
1.2 In this Agreement, except to the extent that the context otherwise
requires or as otherwise expressly stipulated:
1.2.1 words referring to one gender shall include a reference to the other
genders;
1.2.2 words importing the singular shall include the plural and vice versa;
1.2.3 a reference to:
1.2.3.1 a "subsidiary" or "holding company" shall be construed in accordance
with section 1 of the Companies Act as in force at the date of this
Agreement;
1.2.3.2 a "person" includes a reference to a body corporate, a trust, an
unincorporated association or a partnership and that person's legal
personal representatives and successors;
6.
1.2.4 where any payment falls due or any other obligation falls to be
performed on a day which is not a Business Day, then such payment
shall be made or such obligation performed on the next succeeding
Business Day.
2. INTRODUCTION
Pyramid Freight and Empowerment Trust are or are about to become shareholders
in the Company and wish to enter into this Agreement to regulate their
relationship with one another and with the Company on the terms and
conditions set out below.
3. EFFECTIVE DATE
Notwithstanding the Date of Signature, this Agreement shall be deemed to have
commenced on the Effective Date.
4. CHARACTERISTICS OF THE COMPANY
4.1 The authorised share capital of the Company at the Effective Date was
and at the Date of Signature is R1 000 divided into 1 000 ordinary
shares with a par value of R1.00 each.
4.2 The issued share capital of the Company at the Date of Signature is
R100 divided into 100 ordinary shares with a par value of R1.00 each,
and will be held by the Shareholders as follows.
NAME OF SHAREHOLDER NUMBER OF SHARES PERCENTAGE SHAREHOLDING
------------------- ---------------- ------------------------
Pyramid Freight 75 75%
Empowerment Trust 25 25%
TOTAL 100 100%
4.3 The Company shall conduct its accounting in accordance with South
African Generally Accepted Accounting Practice ("GAAP").
4.4 The financial year of the Company currently ends on 31 January each
year.
7.
4.5 The current auditors of the Company are Deloitte & Touche.
4.6 The parties will procure that the initial bankers of the Company are
Nedbank Limited.
4.7 The registered address of the Company is 0 Xxxxxx Xxxx (xxx Xxxxx Xxxx
Xxxx), Xxxxxxxxxxx, 0000.
5. FINANCING
5.1 It is recorded that Pyramid Freight has lent or is about to lend an
amount of R680 000 000 to the Company, which amount has been or will be
utilised by the Company in payment of the purchase price for the
business divisions acquired by the Company from Pyramid Freight in
terms of a sale of business agreement entered into or to be entered
into between Pyramid Freight and the Company. The terms of repayment
and the interest rate of the loan are set out in the loan agreement
entered into or to be entered into between Pyramid Freight and the
Company. The repayment of this loan shall take preference to the
repayment of any other loans by the Shareholders to the Company.
5.2 The Shareholders shall each use their reasonable endeavours to procure
that the financial requirements of the Company are met as far as is
practicable from its own resources or by borrowings from banks and
other similar sources on the most favourable terms reasonably
obtainable as to interest, repayment and security, but without allowing
any prospective lender a right to participate in the equity share
capital of the Company as a condition of any loan.
5.3 The Company shall notify the Shareholders of any amount which is from
time to time required by the Company and which is not, or is unlikely
to become, available from its own resources or from borrowings or other
sources pursuant to clause 5.2 and shall supply to any Shareholder such
information as that Shareholder may reasonably request to satisfy
itself that the amount so notified is required and will not otherwise
be available. If the Shareholders unanimously agree to provide
additional funds, such additional funds shall be provided by the
Shareholders as loans in proportion to their respective shareholdings
in the Company.
8.
5.4 Subject to 5.1, the Shareholders' loan accounts against the Company, if
any, shall, unless the Shareholders agree thereto in writing -
5.4.1 bear interest at a rate agreed to with the Company at the date of
granting the loan;
5.4.2 be repaid by the Company to each Shareholder upon a Board resolution
to make such repayment;
5.4.3 be repaid in the proportion that each Shareholder's loan account
balance bears to the sum of all Shareholders' loan accounts; and
5.4.4 be subordinated to the extent necessary and acceptable to the
Shareholders in order to enable the Company to obtain funding from
any third party creditor.
5.5 All claims on loan account against the Company shall immediately become
due and payable in any of the following events -
5.5.1 the Company being placed in liquidation or under judicial
management, whether provisionally or finally, and whether
compulsorily or voluntarily;
5.5.2 a submission by the Company of a compromise or similar offer to its
creditors generally;
5.5.3 the assets of the Company being attached in execution and remaining
attached for a period of not less than 15 days.
6. THE BOARD AND BOARD MEETINGS
6.1 MANAGEMENT TO VEST IN BOARD
Subject to the provisions of this Agreement, the management of the
Business and affairs of the Company shall vest in its Board.
6.2 COMPOSITION OF BOARD
The Shareholders agree to procure (and undertake to exercise their
rights as shareholders, whether directly or indirectly, of the Company
to procure) that the Board will comprise of 6 directors of whom:
9.
6.2.1 Pyramid Freight (for so long as it is a Shareholder) shall be
entitled, but not obliged, to appoint 4 directors;
6.2.2 Empowerment Trust (for so long as it is a Shareholder) shall be
entitled, but not obliged, to appoint 1 director; and
6.2.3 the Shareholders shall appoint 1 independent director. It is agreed
that a person shall be regarded as being independent of Pyramid
Freight or the Empowerment Trust, as the case may be, if that person
is not a director, trustee, officer or employee of Pyramid Freight
or the Empowerment Trust.
6.3 REMOVAL OF DIRECTORS
Each Shareholder shall be entitled to remove any person appointed by it
as a director and to appoint any other person in the stead of any
person so removed or who for any other reason fails to take up or
remain in office. A Shareholder removing a director nominated by it
will be responsible for and shall indemnify the other Shareholder and
the Company against any claim by such director for wrongful or unfair
dismissal or redundancy or any other compensation arising out of such
removal or loss of office.
6.4 ALTERNATE DIRECTOR
Each director shall be entitled to appoint (or remove, if he so
desires) an alternate director and the Shareholders undertake to vote
(and to procure that their nominees and appointees vote) in favour of
the appointment (or removal) of the alternate director.
6.5 VOTE OF DIRECTORS
Each director appointed shall have one vote at any meeting of the
Board.
6.6 MANAGING DIRECTOR
The Managing Director shall be appointed by Pyramid Freight from one of
its nominees to the Board and shall not have a casting vote.
10.
6.7 CHAIRMAN
The Board shall appoint a chairman of the Company from one of the
Pyramid Freight nominees to the Board. The chairman shall not have a
casting vote.
6.8 MATTERS OF APPOINTMENT AND REMOVAL
Any appointment, removal or replacement of directors pursuant to this
Agreement shall be in writing to the Company and shall be operative as
soon as such notice is received at the Company's registered address.
6.9 RIGHT TO CALL BOARD MEETING
Any director of the Company may call a meeting of the Board by giving
the required notice.
6.10 QUORUM
6.10.1 A quorum at meetings of the Board shall be four directors present at
the commencement and for the duration of the meeting provided that
one shall be a director (or his alternate) appointed by Pyramid
Freight.
6.10.2 If no quorum is present at a meeting of the Board within 30 minutes
from the specified time, the meeting will be adjourned to a date
seven days later, at the same time and venue, or if that date is not
a Business Day, then to the next succeeding Business Day. If at such
adjourned meeting a quorum is not present within 30 minutes from the
time of that meeting, the directors present will be deemed to
constitute a quorum.
6.11 NOTICE OF MEETINGS
6.11.1 The notice period for convening a meeting of the Board will be 14
days, unless otherwise agreed by the directors; provided that in
cases of urgency the notice period will be 48 hours.
6.11.2 Notice of all meetings of the Board will be given to all directors
and their alternates at their respective addresses notified to the
Company from time to time in writing. The notice shall contain an
agenda, specifying in reasonable detail the matters to be discussed
at the Board meeting and the agenda shall be accompanied by any
relevant papers for discussion.
11.
6.11.3 Provided proper notice of the meeting and the means by which the
meeting shall be conducted as contemplated in this Agreement have
been given or waived, meetings of the Board may be held by means of
such telephone, electronic or other communication facility as
permits all persons participating in the meeting to communicate with
each other simultaneously and instantaneously, provided that any
director may insist that any meeting be held at which all directors
are able to be present.
6.12 FREQUENCY OF MEETINGS
Board meetings will be held quarterly, or more frequently as is
necessary for the efficient conduct of the Business.
6.13 VENUE OF MEETINGS
The venue of Board meetings shall be the registered address of the
Company or such other venue as the directors may agree to in writing.
6.14 WRITTEN RESOLUTIONS
A resolution in writing signed by all the directors of the Company,
which resolution is incorporated into the directors' minute book, shall
be as valid and effective for all purposes as a resolution passed by
the directors of the Company at a meeting duly convened, held and
constituted. Any such resolution may consist of several documents in
like form, each signed by at least one of the directors. Unless the
contrary is stated therein, any such resolution shall be deemed to have
been passed on the date on which it was signed by the director last
signing it. A fax of a director's or an alternate's signed resolution
shall be acceptable evidence that such resolution has been signed by
the director whose signature appears on the fax.
6.15 MINUTES
Minutes of Board meetings will be circularised to all members of the
Board within a reasonable time after the conclusion of each meeting and
shall be tabled for approval at the next following Board meeting.
12.
6.16 CONFLICTS OF INTEREST
If any person appointed as a director of the Company is a director of a
competitive business to that carried on by the Company from time to
time, any resolution to be considered by the directors in which such
person could have a conflict of interest by reason of his directorship
of the competing company, shall not be dealt with by the directors but
shall be submitted to the Shareholders for consideration.
6.17 EXECUTIVE COMMITTEE
6.17.1 The Board may delegate any of their powers to an executive committee
consisting of such member or members of their body as they think
fit. Any committee so formed shall, in the exercise of the powers so
delegated, conform to any rules that may be imposed on it by the
Board.
6.17.2 The committee may elect a chairman of its meetings, provided that
such person shall be elected from one of the nominees of Pyramid
Freight.
6.17.3 A quorum at meetings of the executive committee shall be two members
present at the commencement and for the duration of the meeting
provided that one shall be a member (or his alternate) appointed by
Pyramid Freight. If no quorum is present at a meeting of the
committee within 30 minutes from the specified time, the meeting
will be adjourned to a date seven days later, at the same time and
venue, or if that date is not a Business Day, then to the next
succeeding Business Day. If at such adjourned meeting a quorum is
not present within 30 minutes from the time of that meeting, the
members present will be deemed to constitute a quorum.
6.17.4 Questions arising at any meeting shall be determined by a majority
of votes of the members present, and in the event of an equality of
votes the chairman shall not have a second or casting vote.
6.17.5 The provisions of clauses 6.9 and 6.11 to 6.15 shall apply to
meetings of the executive committee mutatis mutandis.
13.
7. SHAREHOLDERS' MEETINGS
7.1 QUORUM
7.1.1 A quorum at meetings of the Shareholders shall be all Shareholders,
present personally or by proxy.
7.1.2 At a meeting of the Shareholders each Shareholder shall have one
vote per share then held by that Shareholder.
7.1.3 If no quorum is present at any meeting of Shareholders within 30
minutes of the time of the meeting (or such longer period as those
present may agree), the meeting shall be adjourned to a day not
later than seven days at the same time and venue, or if that day is
not a Business Day then to the next succeeding Business Day. Written
notice of such adjournment specifying the business to be dealt with
at the adjourned meeting of Shareholders shall be given forthwith to
the Shareholders.
7.1.4 If at the adjourned meeting a quorum is not present within 30
minutes of the time of that meeting (or such longer period as those
present may agree), the Shareholders present or represented shall
constitute a quorum.
7.2 RESOLUTIONS IN WRITING
Subject to the provisions of the Companies Act in relation to special
resolutions, a resolution in writing circulated to all the Shareholders
and signed by all of them shall be as valid and effective as if such
resolution had been passed at a Shareholders' meeting duly convened and
held. Any such resolution may consist of several documents in like
form, each signed by at least one of the Shareholders. Unless the
contrary is stated therein, any such resolution shall be deemed to have
been passed on the date of the signature by the Shareholder last
signing such resolution. A facsimile copy of the resolution signed by a
Shareholder shall be acceptable evidence that such resolution has been
signed by the Shareholder whose signature appears on that facsimile;
provided always that such Shareholder shall have signed the original
copy of the resolution and such original copy shall be retained in the
records of the Company as specified in the Companies Act. Should a
written resolution circulated to all Shareholders not be signed by all
the
14.
Shareholders, such resolution shall be of no force or effect and the
matter or matters which are the subject of such written resolution
shall be referred to a Shareholders' meeting for consideration.
8. MINORITY PROTECTION PROVISIONS
The Shareholders and the Board shall procure (insofar as they are able by the
exercise of all voting rights and powers of control available to them) that
no decision shall be taken in respect of any of the following matters in
relation to the Company, or, if taken, shall not be implemented unless such
decision, if taken at a meeting of the Shareholders, is approved by all the
Shareholders, or if taken at a meeting of the Board, is approved by all the
directors present at the meeting provided that at least one shall be a
director (or his alternate) appointed by Pyramid Freight (and any decision
taken contrary to the provisions set out above shall be invalid):
8.1.1 any material change of the nature of the Business of the Company;
8.1.2 the disposal of the whole or substantially the whole of the Business
of the Company;
8.1.3 the voluntary winding-up of the Company;
8.1.4 the conclusion of any non-arms' length transaction with a
Shareholder or an Affiliate of a Shareholder;
8.1.5 the admission of any new shareholders to the Company (except as
provided for elsewhere in this agreement).
9. DIVIDEND POLICY
9.1 The Board shall meet as soon as possible after the Company's annual
financial statements have been prepared and in compliance with prudent
financial management, and taking into account working capital
requirements, banking covenants, operational requirements, the
Company's annual business plan and the Company's cash commitments and
obligations and provided further that the Company does not borrow funds
in excess of its funding policy and gearing ratio from time to time to
enable it to pay the dividend recommend to the Shareholders, that the
Company declare and pay
15.
as a dividend as much of its after-tax profits as are available for
distribution. Such dividend shall be declared and paid by the Company
once approved by the Shareholders.
9.2 The Shareholders and the Board shall procure (insofar as they are able
by the exercise of all voting rights and powers of control available to
them) that the Company shall lend and advance an amount of R250 000 per
annum to the Empowerment Trust annually in advance in January each year
until such time as the income of the Empowerment Trust equals or
exceeds an amount of R250 000 per annum. The loan shall be interest
free. The loan shall be repaid by the Empowerment Trust to the Company,
by the Company setting-off the amount lent and advanced against the
amount of dividends declared and to be paid by the Company to the
Empowerment Trust or so much of the amount lent and advanced as equates
to the amount of the dividends declared and to be paid by the Company
to the Empowerment Trust, until the total amount lent and advanced has
been repaid in full.
10. INSURANCE
The Board shall procure that the Company takes out and maintains insurance to
ensure that the Company's assets and operations are at all times adequately
insured against risks which are usually insured against.
11. RIGHTS OF PRE-EMPTION
11.1 In the absence of any agreement in writing to the contrary, any
original shares for the time being unissued and any new shares from
time to time created in the Company shall before issue be offered to
the Shareholders in proportion, as nearly as the circumstances admit,
to the number of the existing shares held by them. The offer (which may
not be ceded or renounced either in whole or in part without the
consent of all Shareholders) shall be made by notice from the Board
specifying the number of shares offered, the terms and conditions under
which they are offered and limiting the time (which shall not be less
than 15 days) when the offer, if not accepted, will be deemed to be
declined.
16.
11.2 Notwithstanding anything to the contrary contained in this Agreement or
in the Company's memorandum or articles of association for the time
being and unless otherwise agreed to in writing by all Shareholders -
11.2.1 a Shareholder shall not pledge, cede or otherwise burden or encumber
its shares in the Company without the prior written consent of the
other Shareholder;
11.2.2 a Shareholder may not sell, donate, alienate or otherwise dispose of
or transfer (hereinafter collectively referred to as "SELL") any of
the shares held by it in the Company save in accordance with the
provisions of this clause;
11.2.3 if such Shareholder is indebted to the Company, that Shareholder may
sell any of the shares held by it in the Company, only if it
simultaneously repays to the Company all amounts owed by it to the
Company.
11.3 Subject to the other provisions of this Agreement, a Shareholder
proposing to sell all or part of his shares in the Company shall at the
same time offer to sell all or a portion of that Shareholder's claims
on loan account against the Company, if any, at face value. The portion
of the claims on loan account to be offered for sale shall be the same
percentage of the selling Shareholder's total claims on loan account as
the shares offered for sale are of the selling Shareholder's total
shareholding in the Company. Any person accepting an offer of shares
for sale shall at the same time accept the offer of the claim on loan
account.
11.4 A Shareholder wishing to sell or otherwise dispose of all or part of
its shares in the Company (THE OFFEROR) shall serve notice in writing
upon the Company of his intention to sell its shares (THE offer) and
shall deliver the share certificates and signed share transfer forms in
respect of the shares concerned (THE IDENTIFIED SHARES) together with
the notice.
11.5 The notice shall specify:
11.5.1 the purchase price per share at which the offeror is prepared to
sell the identified shares;
17.
11.5.2 the value of the pro rata portion of the offeror's claims on loan
account linked to the identified shares;
11.5.3 whether the offer is capable of acceptance in whole or in part;
11.5.4 any other terms and conditions upon which the offeror is prepared to
sell his shares; and
11.5.5 if applicable, the identity of any interested third party.
11.6 The Company, on behalf of the offeror, shall first offer the identified
shares to the remaining Shareholder. The offer shall remain open for
acceptance for 30 days from the date it is given. Acceptance shall be
given in writing within this 30 day period (THE FIRST PERIOD).
11.7 Subject to this clause 11, if at the expiry of the first period, the
remaining Shareholder does not accept the offer, then the offeror shall
be entitled to require the Company to take steps to dispose of such of
the identified shares in respect of which the offer was not accepted by
the other Shareholder, to a third party, provided that -
11.7.1 none of the terms and conditions of the disposal is more favourable
to the third party than the equivalent term or condition specified
in any offer to the Shareholders;
11.7.2 the offer is accepted by the third party within 30 days of the
expiry of the offer to the remaining Shareholder referred to in
11.6;
11.7.3 the third party becomes a party to this Agreement;
11.7.4 the remaining Shareholder does not object, on reasonable grounds, to
the third party; and
11.7.5 the third party undertakes in writing to indemnify the disposing
Shareholder against any claim which may be made against the
disposing Shareholder by any party pursuant to a guarantee,
suretyship or indemnity referred to in clause 18 or in respect of
any cause of action arising after the date of sale in respect of the
disposing Shareholder's liability as surety or guarantor for any of
the obligations of the Company or its subsidiaries. The parties
will, however, use their best endeavours
18.
to procure that the third party will be accepted in the place of the
offeror in respect of any guarantee, suretyship or indemnity, and
that such offeror be released as a guarantor, surety or indemnifier.
11.8 If upon the expiry of the offer period referred to in 11.7.2, the
aggregate of the shares for which an offer has been received is less
than the aggregate of the identified shares, the offeror may, within
fourteen days, elect to withdraw the offer, in which case the offer
will be deemed to be withdrawn and the offeror shall be entitled to
retain all the identified shares.
11.9 Notwithstanding the provisions of this clause 11, a shareholder shall
be entitled to transfer its shares (in whole or in part) to an
Affiliate of the Shareholder (THE TRANSFEREE) provided that:
11.9.1 the Transferee delivers a written undertaking, in a form and
substance reasonably acceptable to the other Shareholder, to be
bound by the provisions of this Agreement;
11.9.2 the original Shareholder (THE TRANSFEROR) delivers to the other
Shareholder a written agreement binding itself as surety and
co-principal debtor for the due fulfilment by the Transferee of all
its obligations under this Agreement; and
11.9.3 if the Transferee ceases for any reason to be an Affiliate of the
Transferor then the shares shall be transferred back to the
Transferor. Should the Transferee fail, within a reasonable period
after ceasing to be an Affiliate of the Transferor, to transfer the
shares to the Transferor, any director of the Company for the time
being is irrevocably authorised to sign all documents and do all
things necessary to effect such transfer.
11.10 The transferee of any shares and loan accounts acquired pursuant to
this clause 11, shall pay the stamp duty and any other similar duties
payable in respect of such acquisition.
12. COMPULSORY OFFERS FOR SALE
12.1 If a Sale Event occurs in relation to a Shareholder then that
Shareholder will be deemed on the day immediately preceding the Sale
Event to have offered to sell its shares in and claims on loan account
against the Company for sale
19.
to the remaining Shareholder, in accordance with 11 but at a price
determined in accordance with 12.2.
12.2 The price at which shares shall be offered pursuant to 12.1 shall be
the fair market value at the date of the relevant Sale Event as agreed
between the offeror and the remaining Shareholder. Failing such
agreement within seven days of the relevant Sale Event, a determination
as to the price shall be made by an independent chartered accountant in
public practice of not less than 10 years' standing. The identity of
such chartered accountant will be determined by agreement between the
parties, or failing such agreement the chartered accountant will be
nominated by the President for the time being of the South African
Institute of Chartered Accountants (or its successor in title) provided
that such chartered accountant shall be a partner or director of one of
South Africa's major accounting firms.
12.3 In making his determination the chartered accountant will have regard
to factors which he considers relevant. The chartered accountant will
be deemed to be acting as an expert and not as an arbitrator in making
the determination and his decision will, in the absence of manifest
error, be final and binding on the parties. The costs of the chartered
accountant in making the determination will be borne by the
Shareholders in equal shares. The value attributed to the claims on
loan account shall in all cases be the face value thereof.
12.4 Any disputes as to the calculation of the purchase price pursuant to
the above shall be settled in accordance with 22.
13. THE PURCHASE PRICE AND TRANSFER OF SHARES
13.1 The purchase price in respect of a sale of shares pursuant to clauses
11 or 12 shall be payable in cash, free of bank and other charges at
the Company's registered office within seven days from the expiry of
the 30 day period referred to in clause 11.6 or the seven day period
referred to in 12.2 or such other period as may be set out in the
offer, and against completion of the following matters by the offeror:
20.
13.1.1 the delivery of the share certificates in respect of the shares
purchased together with such transfer forms as may be required to
transfer them to the offeree or his nominee;
13.1.2 the delivery to the Company of a written cession of the loan
account, or any part thereof purchased;
13.1.3 the written resignation of all directors appointed by the disposing
Shareholder to the Board if all the offeror's shares in the Company
have been disposed of, or such number of directors as are necessary
to ensure that the number of directors appointed by the disposing
Shareholder is in proportion to its shareholding after the disposal,
pursuant to clause 6.2 above.
13.2 Should the offeror fail, within a reasonable period after the expiry of
the seven day period referred to in clause 13.1, to deliver or procure
the delivery of the shares to the offerees, upon 14 days' written
notice to the offeror, any director of the Company for the time being
shall be irrevocably authorised to sign all documents and do all things
necessary to effect the transfer of the shares against receipt of the
purchase price on behalf of the offeror.
14. CHANGE IN EMPOWERMENT CHARTER AND/OR LEGISLATION
In the event that the South Africa Government introduces any amendments,
adjustments or changes to the Empowerment Charter for the Freight Forwarding
and Clearing Industry or introduces any new empowerment charter, legislation
or regulations or that the practice in respect of black economic empowerment
changes, any of which:
14.1 have the effect of no longer requiring the Company to be black economic
empowered or of reducing the criteria for the Company to be black
economic empowered, then the Empowerment Trust undertakes to sell to
Pyramid Freight so much of its shareholding in the Company as Pyramid
Freight may determine on written notice to the Empowerment Trust. The
purchase price per share will be calculated in accordance with the
following formula:
x multiplied by the percentage of the share capital (as a percentage
of the total issued share capital of the Company) to be acquired;
21.
where:
x = z multiplied by y;
where for purposes of the above formula:
y = 50% of the average trade weighted price earnings multiple of UTi
Worldwide Inc as per UTi Worldwide Inc's listing on NASDAQ for the
30 day period immediately preceding the date of the notice referred
to in 14.1, subject to a maximum of 12; and
z = the aggregate of the weighted attributable audited
earnings (before minorities) of the Company over the reporting
periods set out below with the weightings set out below:
REPORTING PERIOD PERIOD OF EARNINGS WEIGHTING FACTOR
---------------- ------------------ ----------------
Period 1 Last four completed and 3/6
reported quarters prior to
date of notice referred to
in 14.1
Period 2 4 quarters prior to period 1 2/6
Period 3 4 quarters prior to period 2 1/6
Any disputes as to the calculation of the purchase price of the
shares pursuant to 14.1, shall be settled in accordance with 22.
Payment of the purchase price for the shares will be made within
seven days after the determination of the purchase price against:
14.1.1 delivery of the share certificates in respect of the shares
purchased, together with share transfer forms as may be required to
transfer them to Pyramid Freight;
22.
14.1.2 the written resignations of the Empowerment Trust's nominees to the
Board in the same proportions as referred to in clause 13.1.3; and
14.1.3 the appointment of nominees of Pyramid Freight to the Board of the
Company, if Pyramid Freight so requires.
The claims of the Empowerment Trust on loan account against the
Company, if any, shall become due and payable on the effective date
(which will be the date on which the purchase price is paid) of the
acquisition pro rata to the shares acquired by Pyramid Freight;
14.2 have the effect directly or indirectly reducing the status of the
Empowerment Trust as a black economic empowerment entity and thus
affecting the status of the Company as not being black economic
empowered, the Empowerment Trust undertakes to sell so much of its
shareholding in the Company at the then fair market value of such
shareholding as determined by the auditors of the Company to another
black economic empowerment entity nominated by Pyramid Freight so as to
ensure that the Company retains its black economic empowered status.
The black economic empowerment entity will be required to become a
party to this Agreement or an amendment to this Agreement;
14.3 have an effect on the Company's ability to comply with the empowerment
criteria of such empowerment charter, legislation, regulations or
practice, other than in the circumstances set out in 14.1 and 14.2, the
Shareholders agree that they will meet to negotiate in good faith
changes to this Agreement and/or their individual shareholding in the
Company (including but not limited to dilution of shareholding) so as
to enable the Company to comply with such amendments, adjustments or
changes to the Empowerment Charter for the Freight Forwarding and
Clearing Industry or any new empowerment charter, legislation or
regulations or any new empowerment practice. If the Shareholders are
unable to reach agreement within 30 (thirty) Business Days after a
Shareholder has called for the negotiations to take place pursuant to
this clause, the dispute will be referred to arbitration in terms of
22.
23.
15. RESTRAINT
15.1 The Empowerment Trust undertakes to Pyramid Freight and to the Company
throughout the existence of this Agreement and for a period of two
years after it ceases to be a Shareholder in the Company, it will not
(and it will procure that its respective Affiliates will not):
15.1.1 without the prior written consent of Pyramid Freight and the Company
and whether directly or indirectly, compete with the Company in the
fields of activity referred to in clause 15.2 within the areas of
restraint set out in clause 15.3;
15.1.2 solicit or induce others to solicit, directly or indirectly, any
clients of the Company for the purpose of inducing them to cease
doing business with the Company; or
15.1.3 persuade, induce, encourage or procure any employee employed by the
Company to become employed by or interested, directly or indirectly,
in any manner whatsoever in any business which is in competition
with the business carried on by the Company, or terminate his
employment with the Company or furnish any information or advice,
acquired by the employee as a result of his employment by the
Company, to any unauthorised person.
15.2 The fields of activity in respect of which the restraint applies will
be the Business and the business actively carried on by the Company
during the existence of this Agreement and at the time that the
Empowerment Trust ceases to be a shareholder of the Company.
15.3 The area of restraint referred to in this clause shall be the Republic
of South Africa and each province in the Republic of South Africa (as a
separate restraint in each province).
15.4 Empowerment Trust acknowledges:
15.4.1 that the customers and clients of the Company are or could be drawn
from all of the areas in which the restraint is to be operative;
24.
15.4.2 that Pyramid Freight and the Company would suffer substantial damage
if it were to operate a business in the field of activity in respect
of which it is restrained from competing with the Company, within
the area to which, and during the time in which, the restraint is to
be operative;
15.4.3 that the restraint is the minimum restraint required by the Company
and Pyramid Freight to protect themselves against unfair
competition;
15.4.4 that if Empowerment Trust were not prepared to agree to the
restraints set out in this clause the parties would not have entered
into this Agreement on these terms
and that in the circumstances it is fair and reasonable, and
necessary for the protection of the Company's interests that it
should be restrained in the manner set out in this clause.
15.5 Should the reasonableness of any of the provisions set out in this
clause at any time be disputed, then the onus of proving that the
provision is unreasonable will rest on the party making such
allegation.
15.6 Each and every restraint contained in this clause is separate and
divisible from every other restraint in this clause and from any other
restraint so that if one of the restraints is or becomes unenforceable
for any reason that restraint will be severable and will not affect the
validity of any other restraint contained in this clause or otherwise.
15.7 Insofar as the restraints are considered by the parties to be
reasonable in all the circumstances, they agree that if the restraints,
taken together, are adjudged to go beyond what is reasonable in all the
circumstances but would be adjudged reasonable if part or parts of the
wording of the restraints were deleted, the restraints will apply with
such words deleted.
15.8 The restraints contained in this clause will be capable of being
enforced by Pyramid Freight or by the Company.
25.
16. ADMISSION OF NEW MEMBERS
Subject to clause 11 (rights of pre-emption), the Shareholders may from time
to time agree to admit third parties as additional shareholders in the
Company, provided that:
16.1 no third party shall be admitted as a shareholder in the Company unless
unanimously agreed to in writing by all Shareholders;
16.2 no third party shall be entitled to become a shareholder in the Company
unless and until such third party has signed this Agreement, or an
amendment of this Agreement.
17. FINANCIAL INFORMATION
17.1 The Shareholders will procure that the Board ensures that:
17.1.1 the Company complies with the reporting requirements of UTi
Worldwide Inc;
17.1.2 audited financial statements will be prepared as soon as possible
after each financial year end but in any event by not later than 180
days after the financial year end of the Company;
17.1.3 monthly management accounts will be prepared for delivery to the
Shareholders as soon as possible after each month end;
17.1.4 monthly information summaries as may be required by the Shareholders
are prepared and furnished to the Shareholders; and
17.1.5 an annual budget shall be prepared prior to the commencement of each
financial year for acceptance by the Board.
17.2 The Shareholders shall each be entitled to examine during normal
business hours the books and accounts kept by the Company and to be
supplied by the Company with all relevant information in addition to
that listed in clauses 17.1.1 to 17.1.5, including, without limitation,
operating statistics and such other trading and financial information
in such form as they may reasonably require, to keep them properly
informed about the Business of the Company
26.
and generally to protect their interests, and to make such copies
thereof or extracts therefrom, as such Shareholder deems fit.
18. GUARANTEES, SURETYSHIPS AND INDEMNITIES
No Shareholder shall issue any guarantee, suretyship or indemnity to third
parties for the obligations of the Company or any of its subsidiaries, which
shall in any way bind the Shareholders jointly and severally, unless such
suretyship, guarantee or indemnity is furnished with the prior written
consent of the other Shareholders, in which event, notwithstanding any
individual liability in terms of such guarantee, suretyship or indemnity,
the Shareholders who consent to the issue of such guarantee, suretyship or
indemnity shall bear any loss or damage arising out of or in connection with
the guarantee, suretyship or indemnity in the same ratio in which they hold
shares in the Company at the time that the guarantee, suretyship or
indemnity was given. The Company and the Shareholders indemnify each other
accordingly.
19. SUPPORT
The Shareholders undertake at all times to do all such things, perform all
such actions and take such steps (including in particular the exercise of
their voting rights in the Company) and to procure the doing of all such
things, the performance of all such actions and taking of all such steps as
may be open to them and necessary for or incidental to the putting into
effect and maintenance of the provisions of this Agreement and to promote,
grow and develop the Business of the Company.
20. CONFLICT WITH ARTICLES OF ASSOCIATION
20.1 The Shareholders undertake forthwith hereafter to take all such steps
and do all such things as may be necessary to ensure that the
memorandum and articles of association of the Company reflect, insofar
as may be appropriate, the provisions of this Agreement.
20.2 Should any conflict arise between the articles of association of the
Company and the provisions of this Agreement, the provisions of this
Agreement will prevail.
27.
21. CONFIDENTIALITY
21.1 The parties to this Agreement acknowledge that each of them wishes to
retain strict confidentiality regarding the contents of this Agreement.
21.2 Each party therefore undertakes to the other 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 (other than that
party's holding company) without the prior written consent of the other
party, except where it is necessary to do so:
21.2.1 to enforce the provisions of this Agreement;
21.2.2 to comply with statutory obligations or with the requirements of a
competent government authority or registered stock exchange.
21.3 The obligation to maintain confidentiality shall not apply to
information which was in the public domain prior to its disclosure by a
party to this Agreement.
22. ARBITRATION
22.1 REFERRAL TO ARBITRATION
Subject to clause 22.10, any dispute of whatever nature in respect of
or arising from or pursuant to this Agreement or its termination,
including, without limitation, any dispute as to:
22.1.1 the formation or existence of this Agreement;
22.1.2 the implementation of this Agreement;
22.1.3 the interpretation or application of any of the provisions of this
Agreement;
22.1.4 the respective rights and obligations of the Parties in terms of or
arising out of this Agreement or its breach or termination;
22.1.5 the validity, enforceability, rectification, termination or
cancellation or alleged cancellation, whether in whole or in part,
of this Agreement;
28.
22.1.6 any documents furnished by any of the parties to this Agreement; or
22.1.7 the amount of any damages which may be suffered under this Agreement
or which relate in any way to any matter affecting any of the
interests of all or any of the parties in terms of this Agreement
shall, unless resolved among the parties to the dispute within 30 days
following delivery of written notice by a party to the other parties of
the nature of the dispute, be referred in the first instance at the
request of any of the parties for mediation to the Managing Directors
and the trustee nominated by the trustees for the time being of the
Empowerment Trust for this purpose. If the dispute has not been
resolved through the mediation of the Managing Directors and the
trustee nominated by the trustees for the time being of the Empowerment
Trust for this purpose within 10 Business Days of its being referred to
them then the dispute will be determined by arbitration in accordance
with the provisions of this clause 22.
22.2 IDENTITY OF ARBITRATOR
The arbitrator shall:
22.2.1 if the matter in issue is primarily an accounting, tax or financial
matter, be an independent auditor in public practice agreed upon
between the Parties to the dispute, or failing such agreement within
seven Business Days after any of the Parties has called for the
dispute to be referred to arbitration, nominated from amongst the
four largest accounting firms in South Africa by the President for
the time being of the South African Institute of Chartered
Accountants (or its successor);
22.2.2 if the matter in issue is primarily a legal matter, be a practising
senior counsel or attorney of not less than 10 years standing, in
practice in Johannesburg or Sandton, agreed upon between the Parties
to the dispute or failing such agreement within seven Business Days
after any of the Parties has called for the dispute to be referred
to arbitration, nominated by the President for the time being of the
Law Society of the Northern Provinces or, if that body does not then
exist, the president for the time being of the body having
jurisdiction over attorneys practising in Johannesburg;
29.
22.2.3 if the matter in issue does not fall within the scope of clauses
22.2.1 or 22.2.2, be such independent person with appropriate
knowledge, experience or skill in relation to the matter in issue,
agreed upon between the Parties to the dispute or failing such
agreement within seven Business Days after any of the Parties has
called for the dispute to be referred to arbitration, nominated by
the President for the time being of the South African Institute of
Chartered Accountants.
22.3 VENUE
The place of the arbitration will be Johannesburg or Sandton and the
language of the arbitration and of the arbitration award will be
English.
22.4 PROCEDURES
In making a determination:
22.4.1 the arbitrator shall be bound to follow the general principles of
law, in regard to the substantive issue in question but no strict
rules of evidence or any legal formalities or procedures need be
observed or be taken into account by him in arriving at his
decision, provided, however, that natural justice shall apply;
22.4.2 the arbitrator shall be vested with entire discretion as to the
procedure and manner to be followed in arriving at his decision,
provided that any party to the dispute shall be entitled to call any
witnesses whose evidence may be allowed in chief and who may be
cross-examined by or on behalf of any of the parties; and
22.4.3 the arbitrator shall be entitled:
22.4.3.1 to investigate or cause to be investigated any matter, fact or
thing which he considers necessary or desirable in connection
with any issue in question and in particular to require the
parties to the dispute to make full and complete discovery of
documents; and
22.4.3.2 to interview and question under oath any witnesses and any
executive or other employee of any of the parties and/or any
director or officer thereof.
30.
22.5 TIME FOR DECISION
The parties shall use their best endeavours to cause the decision of
the arbitrator to be given within 90 days after the referral to him.
22.6 COSTS AND EXPENSES
The arbitration award shall include a determination with respect to
costs and expenses of the arbitration.
22.7 FINAL AND BINDING EFFECT
The arbitrator's decision, including his decision in relation to costs,
shall be final and binding on all parties affected thereby, shall be
carried into effect and may be made an order of any competent court at
the instance of any of the parties.
22.8 CONSENT
This clause 22 constitutes an irrevocable consent by the parties to any
proceedings in terms hereof and none of the parties shall be entitled
to withdraw therefrom or to claim at any such proceedings that it is
not bound by this clause 22.
22.9 SEVERABILITY
This clause 22 is severable from the rest of this Agreement and shall
remain in effect even if this Agreement is terminated for any reason.
22.10 INJUNCTIVE RELIEF
The provisions of this clause 22 shall not preclude any party from
instituting any proceedings for an injunction or an interdict or
similar relief or any action where urgent relief may be required in a
court of competent jurisdiction and unless immediate relief is
obtained, the party will suffer irreparable harm and have no adequate
remedy under this Agreement or in law.
31.
23. MISCELLANEOUS MATTERS
23.1 ADDRESSES AND NOTICES
23.1.1 For the purposes of this Agreement, including the giving of notices
and the serving of legal process, the parties choose domicilium
citandi et executandi (DOMICILIUM) at -
23.1.1.1 Pyramid Freight:
0 Xxxxxx Xxxx (xxx Xxxxx Xxxx Xxxx)
Xxxxxxxxxxx
0000
telefax no: 011 457 2606
23.1.1.2 Empowerment Trust:
0 Xxxxxx Xxxx (xxx Xxxxx Xxxx Xxxx)
Xxxxxxxxxxx
0000
telefax no: 011 457 2606;
23.1.1.3 the Company:
0 Xxxxxx Xxxx (xxx Xxxxx Xxxx Xxxx)
Xxxxxxxxxxx
0000
telefax no: 011 457 2606.
23.1.2 Any party may at any time change that party's domicilium by notice
in writing to another address, provided that the new domicilium
consists of, or includes, a physical address at which process can be
served.
23.1.3 Any notice given in connection with this Agreement shall -
23.1.3.1 be delivered by hand; or
23.1.3.2 be sent by prepaid registered post; or
23.1.3.3 be sent by telefax (if the domicilium includes a telefax number)
to the domicilium chosen by the party concerned.
32.
23.1.4 A notice given as set out above shall be deemed to have been duly
given -
23.1.4.1 if delivered, on the date of delivery; or
23.1.4.2 if sent by post, 14 days after posting; or
23.1.4.3 if sent by telefax, on the Business Day that the telefax is
transmitted, except that any telefax transmitted after 16:30
shall be deemed to have been received on the following Business
Day.
23.2 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. This Agreement supersedes any and all prior
agreements, whether in writing or oral.
23.3 NO REPRESENTATIONS
A party may not rely on any representation which allegedly induced that
party to enter into this Agreement, unless the representation is
recorded in this Agreement.
23.4 VARIATION, CANCELLATION AND WAIVER
Any contract varying, adding to, deleting from, novating or cancelling
this Agreement, and any waiver of any right under this Agreement, shall
not be effective unless reduced to writing and signed by or on behalf
of the parties.
23.5 INDULGENCES
An indulgence granted by any party to any other party shall not
constitute a waiver of any 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 the
other party or parties which may have arisen in the past or which may
arise in the future.
33.
23.6 CESSION
A party may not cede that party's rights or delegate that party's
obligations under this Agreement without the prior written consent of
the other parties.
23.7 APPLICABLE LAW
This Agreement shall be interpreted and implemented in accordance with
the laws of the Republic of South Africa.
23.8 COSTS
23.8.1 Each party will bear its own legal costs of and incidental to the
negotiation, preparation, settling, signing and implementation of
this Agreement.
23.8.2 Any costs, including attorney and own client costs in terms of the
relevant court scale of tariffs, incurred by any 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.
23.8.3 The stamp duty on the issue of any shares pursuant to this
Agreement, if any, shall be borne by the Company.
23.9 SEVERANCE
If any provision or warranty contained in this Agreement is rendered
void, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions or warranties shall not
in any way be affected or impaired.
23.10 CO-OPERATION
All of the parties undertake to do all things necessary for the
implementation of this Agreement and they also undertake to sign all
documents and complete all formalities necessary and proper to give
effect to the content and intention of this Agreement.
34.
23.11 NO PARTNERSHIP OR AGENCY
This Agreement will not be deemed to constitute a partnership between
the parties, nor to constitute a party as the agent of the other party
for any purpose whatsoever except as expressly provided in this
Agreement.
23.12 COUNTERPARTS
This Agreement may be executed in any number of counterparts by the
parties to this agreement and once each party to this agreement has
signed a counterpart, each such counterpart shall be considered an
original and all such counterparts shall constitute one and the same
instrument. Any such counterpart may be a facsimile transmission copy
thereof.
Signed at Bedfordview on 6, December 2004.
/s/ Xxxxxx XxXxxx /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------- -------------------------------
WITNESS FOR AND ON BEHALF OF PYRAMID
FREIGHT (PROPRIETARY)
LIMITED DULY AUTHORISED THERETO
Signed at Illovo on 6, December 2004.
/s/ Xxxxx Xxxxxx /s/ Mangiliso Mpshali
---------------------------------------- -------------------------------
WITNESS FOR AND ON BEHALF OF THE
TRUSTEES FOR THE TIME BEING OF
THE UTi EMPOWERMENT TRUST DULY
AUTHORISED THERETO
Signed at Johannesburg on 6, December 2004.
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
---------------------------------------- -------------------------------
WITNESS FOR AND ON BEHALF OF UTi SOUTH
AFRICA (PROPRIETARY) LIMITED
DULY AUTHORISED THERETO
35.
